China should build housing for the rich, not the average Chinese person

This post is a sort of reply to a comment by Yichaun Wang.  Unfortunately I can’t open his blog in China, but I believe he has a post on the topic, which undoubtedly is much better than mine.  I’m travelling to Shanghai today,  and thus don’t have much time.  I’ll just sketch out the bones of an argument, and let you guys fill in the rest of the post yourself:

1  Today the vast majority of Chinese housing, even in urban areas, is of very low quality.  Appropriate for poor people in the US and Europe.

2.  I consider newer well-built urban apartments in the 100-150 square meters range to be appropriate for the middle class in developed countries.

3.  In a few more decades China will be much richer than today, more like the other East Asian economies (Japan, Korea, Taiwan, HK, etc.)

4.  New, well-built, high-rise apartments last a long time.

5.  The flow of new apartments is a small percentage of the stock of (mostly crummy) existing apartments.

6.  When the rising middle class moves into a nice new apartment, their previous unit becomes available for the poorer Chinese, perhaps migrants from the countryside.

Can anyone take these six facts, and construct the counterintuitive argument in the title of this post?

Update: Commenters immediately nailed me on the size of middle class units, probably my American bias creeping in.  I seem to recall that the average Chinese home was about 10 square meters a few years back, but it’s undoubtedly much larger now.  On the other hand 100 to 150 sq. m. may be too big, even in Europe and Japan many units are smaller.


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141 Responses to “China should build housing for the rich, not the average Chinese person”

  1. Gravatar of Tomasz Wegrzanowski Tomasz Wegrzanowski
    14. August 2012 at 15:16

    > I consider newer well-built urban apartments in the 100-150 square meters range to be appropriate for the middle class in developed countries.

    If you’re referring to urban housing (not rural or suburban), >100 square meters would be considered very big in most of European cities.

  2. Gravatar of Mike Sax Mike Sax
    14. August 2012 at 15:31

    Your argument is that by building housing for the rich the houses they vacate will over time become available to the poor.

  3. Gravatar of Robert Easton Robert Easton
    14. August 2012 at 15:32

    Yep, I feel like I’m doing pretty well with my 55 sq metres on the edge of London (technically I’m not even in London). But as Scott told us recently, England doesn’t feel crowded like Atlanta does, so I dread to think what kind of apartments those guys have. 😛

  4. Gravatar of Morgan Warstler Morgan Warstler
    14. August 2012 at 15:52

    Sax,

    You just stated the ENTIRE argument against Obamacare in 18 WORDS.

    WTF is wrong with you?? I mean seriously.

    You do do get the every new invented thing for rich people trickles down tot eh poor FAR FASTER than housing right?

    The real power of trickle down is technology.

    My god man. Switch friggin sides already, walk into the light.

  5. Gravatar of Morgan Warstler Morgan Warstler
    14. August 2012 at 15:54

    Sax,

    You just stated the ENTIRE argument against Obamacare in 18 WORDS.

    WTF is wrong with you?? I mean seriously.

    You do get the every new invented thing for rich people trickles down tot eh poor FAR FASTER than housing right?

    The real power of trickle down is technology.

    My god man. Switch friggin sides already, walk into the light.

  6. Gravatar of Yichuan Yichuan
    14. August 2012 at 16:02

    Thanks for the compliment Scott! I find your argument quite interesting, so here it goes:

    Although the houses being built in China are too expensive for the vast majority of current Chinese people, they will be appropriate for them in the future as economic growth increases (3). Because the current housing stock is of very low quality (1), by the time it is completely replaced, Chinese people will be much richer (3) and will want to buy the housing that will still be around (2, 4). This has a multiplying effect, as when the rural middle class moves to these city houses, their homes back in the countryside become available, allowing other poorer Chinese to move up the housing food chain (6)

    Despite the fact (4) does not characterize a lot of the housing (there’s surprisingly bad treatment of moisture issues), I think your story makes perfect sense in the long-run. It’s just that current real housing prices are extremely high and out of reach for even most middle class Chinese. This imbalance is likely because of financial controls that make the real price of housing not just the stream of consumption services, but rather the perception of future price growth. Chinese families need a store of value, and because housing depreciates slowly enough (4), rich Chinese people invest in it, driving the price up. It’s likely that China will need a real price readjustment to get on the stable real price path that you outlined. But once the prices start to drop, what are credit guarantee companies supposed to do? I remember reading a story a few months ago about concrete companies doubling down on their concrete truck investment to sell concrete on credit to housing companies who have yet to fully build their houses, much less get around to selling them. Even if housing is what Evan would term an “efficient bubble”, it doesn’t mean there won’t be serious financial problems. I’m not sure how monetary policy would respond, and a breakdown in finance may cause further supply side issues. That’s my concern on the housing situation.

    And if you couldn’t read my most, I had an entertaining time thinking of answers to “what should China build instead?” This was my view:

    “I want them to start building leaf blowers, so we don’t have so many Chinese people in the low productivity position of sweeping streets. I want them to start building farm equipment, so we don’t have so many Chinese farmers tending the fields. I want them to build more laundry machines, to free the rural Chinese from scrubbing clothes on washboards. I want them to build electric stoves, so my Grandpa can put away the coal fired outside oven. I want them to build computers that can deliver cheaper education to the masses.

    Instead of just focusing on “building,” I want them to invest in human capital, so productivity can be at a level that we don’t need “make work” jobs. I want them to build more schools and hire better teachers, so classes aren’t as large and you’re not damned if you can’t make it in a top elementary school. I want productivity to be high enough that high end stores don’t need more clerks than actual customers.

    I want these things among many others that will only be more obvious in a freer market.”

    Thoughts?

  7. Gravatar of Mike Sax Mike Sax
    14. August 2012 at 16:10

    Morgan I almost hate to break such a feel good moment but I was just explaining Scott’s point back to him as that’s what he was aksing for.

    Whether he’s right or not-I don’t know.

  8. Gravatar of Mike Sax Mike Sax
    14. August 2012 at 16:12

    Note I’m not saying Scott’s wrong just that I don’t know that he’s right. But even if he were healthcare may be different.

  9. Gravatar of Mike Sax Mike Sax
    14. August 2012 at 16:14

    Morgan you do make it hard though. I mean while I find a lot of people on your side easy not to like you are not easy at all not to like.

    I couldn’t if I tried.

  10. Gravatar of Alexei Sadeski Alexei Sadeski
    14. August 2012 at 17:04

    Scott, you must get to China more often. Whenever you visit, your posts are quite thought provoking.

  11. Gravatar of doug M doug M
    14. August 2012 at 18:00

    Suppose we replace China with Manhattan. We build luxury appartments to benift the poor. Trickle-down thinking in its finest.

    Actually, “we” do build luxury appartments on Manhattan. But, no one suggests that the primary motivation is to help the homeless, or the middle class. Although the middle class does benefit, for some of the reasons S Sumner outlines. But importantly, the government isn’t manipulating investment in luxuary appartments.

  12. Gravatar of Becon Becon
    14. August 2012 at 18:16

    2. I consider newer well-built urban apartments in the 100-150 square meters range to be appropriate for the middle class in developed countries.

    100 square meters!? That’s way too small. Americans need at least 1,000 square feet.

  13. Gravatar of Michael Sullivan Michael Sullivan
    14. August 2012 at 19:10

    Really mike?

    I find Morgan incredibly easy not to like.

  14. Gravatar of Benjamin Cole Benjamin Cole
    14. August 2012 at 19:19

    I like the ida of building housing for the rich—even in the USA.

    If a large amount of lux housing was built, say, in West Los Angeles, it figures to free up housing in neighboring districts, as people move into the lux housing.

    Scott Sumner is right again.

  15. Gravatar of Michael Sullivan Michael Sullivan
    14. August 2012 at 19:23

    BTW, Scott, even in the US 100-150 sm is a nice big apartment, and bigger than most people would have in an expensive city. That’s the size of suburban or cheap city apartments or small houses.

    Yes, lots of people in the US live in 2000 sf homes, and that seems like the middle class standard but there’s a huge chunk of the “middle class” in the US that cannot afford such places.

    Since I left my parent’s house, I’ve never lived in a house much bigger than 150sm, and I’ve lived in a couple of apartments in the 50-60sm range that never felt small.

  16. Gravatar of Saturos Saturos
    14. August 2012 at 19:38

    Or, in other words, don’t move to where the puck is, move to where the puck is going to be.

    Yichuan, that sounds right too. Scott said that we have enough of non-residential investment as well – but we can’t really be sure until we see a free market (bit of Hayek creeping back in there…)

    “On the other hand 100 to 150 sq. m. may be too big, even in Europe and Japan many units are smaller.”

    Aren’t Japanese homes pretty tiny though? That’s one crowded island…

    And I thought this post would interest people: http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/13/what-did-ayn-rand-teach-paul-ryan-about-monetary-policy/

    Great, the last thing we need is MF as the Vice-President. So much for the “Romney is gonna let loose once he’s elected” theory.

  17. Gravatar of Neal Neal
    14. August 2012 at 20:52

    I’m going to a codger and say we should let the Chinese housing market dictate what housing gets built where, instead of thinking we can actually identify what sort of housing the Chinese need.

    (Yes, yes, I know that’s not the point – this is supposed to be an empirical prediction about the direction of the Chinese housing market, not a normative recommendation for the Chinese government – but I’m feeling contrary this morning.)

  18. Gravatar of Bill Ellis Bill Ellis
    14. August 2012 at 21:18

    My first thought on reading this was was…”Aren’t the new Homes going to the rich ? ”
    So I looked into it and found that for a few years now the government has been trying to supply affordable housing….on a massive scale.

    The Chinese government is undergoing a three year, 3.6 million unit, affordable housing building spree that’s supposed to serve low-income families.

    Read more: http://articles.businessinsider.com/2011-07-05/markets/30097191_1_affordable-housing-low-income-families-housing-policy#ixzz23aY7nfkL

    OK but the problem is that even with the government subsidies, most Chinese still can’t afford them…so the government is forced to raise “income ceilings and letting richer Chinese fill the units.”

    So it seems the homes are going to the rich.

  19. Gravatar of Bill Ellis Bill Ellis
    14. August 2012 at 21:50

    There are large shortages for homes in China’s metropolitan areas. So what is stopping the market from supplying more housing ?

    Too much central planing. A government monopoly on land ?

    I don’t think… China should build housing for the rich, or the average Chinese person.

    The question is is why isn’t the market building houses for the Chinese ?

  20. Gravatar of JL JL
    14. August 2012 at 22:26

    Hey, at least you used the metric system…

    But yeah, in Europe middle class apartments are 60-90 sq. meters and family housing is 100-150.

    We got less stuff, so we can do with smaller boxes. 😉

  21. Gravatar of asdasdasd asdasdasd
    14. August 2012 at 23:27

    You are, of course, absolutely right.

    Compare the housing market to the car market.

    No one would argue that the best way to improve access to cars among the poor is to force the auto companies to build cheaper, lower quality cars. Restricting the type of cars that could be built would likely reduce profit margins and the total number of cars built. This would make cars less available and more expensive, reducing the poor’s access to them.

    Yet when it comes to housing this logic is largely ignored.

    Commentators (particular in the UK) frequently argue: we need more affordable homes. Which is odd, given that it is the total supply of homes, of any quality which, together with demand for homes, determines affordability. Restricting the building of homes “affordable homes” is likely to reduce the return to building homes. Hence fewer homes will be built. Which paradoxically will reduce the affordability of homes.

    The post-war experience of Russia and Eastern Europe prove that central planning and price controls are very deleterious for the quantity and quality produced. Yet central planning seems to remain acceptable in the housing market, most odd.

    Ryan Avent’s Gated Cities is a pretty persuasive on this.

  22. Gravatar of Jim Glass Jim Glass
    14. August 2012 at 23:31

    Or, in other words, don’t move to where the puck is, move to where the puck is going to be.

    Where you *hope* the puck will be.

    Why wouldn’t we want to go where the market is? Now everybody — even the free marketers around here — is smarter than the market.

    The Economist survey I quoted before cited multiple sources saying China could have gotten the same growth with 20% of GDP invested instead of 40%. That’s a good 20% of GDP wasted annually for decades. Geeze. How many pucks kicked into your own net is that?

  23. Gravatar of David S David S
    15. August 2012 at 00:09

    I am a residential architect and find this discussion interesting, because housing can simultaneously be an investment, a nearly indispenable shelter, and a deeply symbolic luxury item (a la Veblen).

    What is the broader economic impact when a luxury apartment/house, presumably well built, doesn’t expand the housing stock in a meaningful way because the owner is migratory?
    Wealthy people in the U.S. have multiple homes and may only spend a few weeks out of the year at any particular dwelling. There are positive economic effects from the construction and the ongoing maintenance, but there is no guarantee that there will be a trickle down effect from an expansion of luxury housing.

    And what is luxury housing, anyway? Raw space stops yielding benefits, in my opinion, after 2000 s.f. for a 3-4 person household(a wealthy person might disagree with that–my God, where would we put the servants!).

  24. Gravatar of J.V. Dubois J.V. Dubois
    15. August 2012 at 01:05

    Scott, I think you hugely underestimate the “real” losses related to the real estate bubble – especially in face of regulated market. I do not have any links to support my claim, but besides usual stories of real-estates dropping 30-50% in price you have stories of demolition of whole neighborhoods because banks and investors were unable to sell houses in them.

    According to your rationale, this cannot happen, right? How can it be possible that investors and banks are rather demolishing perfectly good houses – imposing costs of demolition on themselves – then to sell it with 80 or 95% discount? And one hears such stories also from even from countries that respect free markets such as Ireland or even USA.

    The reason behind is fear from reverse bubble. Once people start to put real estates on fire sales, it is very easy to develop a bubble in reverse direction. Thus sellers with market power – mostly banks that own foreclosed real estates – are willing to demolish some stock of houses just to prevent the decrease of price of the real estate stock that is left. Also, banks have perverse incentives to rather keep real-estate market frozen then to let it clear. They fear that if markets will clear, they will need to reevaluate the assets they keep in their balance sheets and if this happens, their own existence may be in jeopardy.

  25. Gravatar of J.V. Dubois J.V. Dubois
    15. August 2012 at 01:21

    asdasdasd: You are wrong. Economics is all about decisions of what and for whom to produce in the face of scarcity. So it is just matter of an accounting identity that if we put more resources to production of luxury goods it has to mean that there will be less resources to produce non-luxury goods. There is no way around this.

    It can be perfectly possible to have free-market economy where 99% population are subsistence workers producing 300 feet yachts and space hotels for the creme de la creme. GDP of such an economy can grow in double digits, it can even be “sustainable”.

    An I have to agree with Yichuan. Higher inequality means that in general there are less incentives for producers to serve the mass markets – the people with median income – and there is more incentives to serve the rich. And besides luxury goods rich often demand security – something that will protect their wealth from depreciation. So I would say that we could face higher risks of various bubbles compared to the economy that serves people with median income.

  26. Gravatar of Morgan Warstler Morgan Warstler
    15. August 2012 at 05:35

    J.V. Dubois,

    Scarcity only exists in Atomic goods.

    In the digital space, there is no scarcity – infact there are exponential network effects.

    Every year, more of human well being is delivered via the digital, and less via the atomic.

  27. Gravatar of Morgan Warstler Morgan Warstler
    15. August 2012 at 05:41

    Where you *hope* the puck will be.

    this is why statr run central decisions are bad. In a nutshell.

    What we want is everyone going whereever THEY think the puck will be, and some will be righteous and win and feast on the bones of those who go to the wrong place.

    But then, in a bit, the losers will get to have the technology that the winners:

    1. built for them.
    2. paid for to be early adopters.

    No one ever views the billion sof dollars spent by early adopters on technology that doesn’t take off correctly.

  28. Gravatar of Scott Sumner Scott Sumner
    15. August 2012 at 05:59

    Yichuan, Interesting comment. I’m pretty sure my argument has some validity, but whether it has enough validity to overturn the common assumptions about China is unclear. I’ve struggled to wrap my head around this issue. If China needs more consumption, then they may need more investment first. I.e. for many types of consumption you need to first produce capital goods. For instance, if you want more restuarant meals (consumption) you first must produce more restuarant buildings (capital.) If you want more housing services (consumption) you first must produce more and better houses (investment.)

    I’m sure I’m missing something obvious here, such as the degree to which certain products are “capital-like,” which is perhaps the rate at which they depreciate. Maybe we can continue this conversation in a few days.

  29. Gravatar of TallDave TallDave
    15. August 2012 at 06:04

    3. In a few more decades China will be much richer than today, more like the other East Asian economies (Japan, Korea, Taiwan, HK, etc.)

    That seems very unlikely. Richer? Yes. Much richer? No.

    China’s size tends make people forget China is still only half as productive as Mexico. Going from North Korean levels of dysfunction to merely a corrupt, polluted country on par with your average South American banana republic is much, much easier than getting to Mexican levels, let alone Japanese or South Korean productivity.

    Most likely they’re going to level off for a couple decades pretty soon (it may already have started, the official numbers can’t be trusted) unless/until they figure out how to be a less dysfunctional culture.

  30. Gravatar of TallDave TallDave
    15. August 2012 at 06:54

    asdasdasd: You are wrong. Economics is all about decisions of what and for whom to produce in the face of scarcity. So it is just matter of an accounting identity that if we put more resources to production of luxury goods it has to mean that there will be less resources to produce non-luxury goods. There is no way around this.

    Except there is — productivity growth and innovation.

    It sometimes amazes me how little time is spent considering the miracle of 2012 living standards. Resources are certainly more scarce than in 1912, yet we live astoundingly better lives than in 1912. How did this happen? Well, we figured out about a million different ways to make life better, 99.999% of them totally unknown to the end consumers they benefit.

    And no one had to force anyone to come up with ways to improve the lot of the masses, by and large innovators did it for their own profit (and there were probably a hundred failures for every success).

    That’s why “inequality” that doesn’t derive from rentseeking is a red herring — it’s entirely possible to have a society in which inequality is growing, scarce resources are dwindling, and yet living standards for everyone keep getting better. All it takes is free markets and free minds.

  31. Gravatar of dtoh dtoh
    15. August 2012 at 08:32

    It’s not about housing…. it’s about land use. Japan is very similar. There is plenty of demand for more and better middle class housing…plenty of construction capacity to build it…. just no space to put it in the places people actually want to live.

    If you want more and cheaper housing, build the transportation and communication infrastructure needed to make it viable in the hinterlands.

  32. Gravatar of Mike C Mike C
    15. August 2012 at 08:46

    Preach it TallDave. I’ve always said, “I don’t give a damn if the rich are getting richer. Just as long as I’m getting richer too”. As long as my living standards are rising, anything else is just an argument based on envy or jealousy, and it damn well shouldn’t be my place to say “HEY, THAT RICH GUY IS GETTING MORE MONEY QUICKER THAN ME, THATS NOT FAIR”.

  33. Gravatar of Morgan Warstler Morgan Warstler
    15. August 2012 at 09:59

    Mike C,

    Oh come on, surely the rich guy’s joy ruins your own!

  34. Gravatar of ChargerCarl ChargerCarl
    15. August 2012 at 11:26

    “If you want more and cheaper housing, build the transportation and communication infrastructure needed to make it viable in the hinterlands.”

    Why not just build taller buildings?

  35. Gravatar of Bill Ellis Bill Ellis
    15. August 2012 at 11:40

    dtoh, and ChargerCarl,

    Even though you quibble…I think you are on the right track. I think looking at the problem from a land use perspective is more relevant than which class housing is built for.

  36. Gravatar of Bill Ellis Bill Ellis
    15. August 2012 at 11:41

    ChargerCarl,
    Are you a San Diego Charger fan too ?

  37. Gravatar of J.V. Dubois J.V. Dubois
    15. August 2012 at 12:11

    TallDave: I tend to agree with your overall message, but I am far less optimistic about your free-market-salvation ending. It is very easy to construct similar argument supporting very different position. What about this one “It sometimes amazes me how little time is spent considering the miracle of 1967 living standards in Soviet Union. Resources are certainly more scarce than in 1917, yet they lived astoundingly better lives than in 1917. How did this happen? …. All it takes is central planing and government imposed discipline.”

    Free markets can go very wrong. Increased price of agricultural products due to innovation in production of biofuels is supposed to be pecuniary externality: the higher price people pay for food is offset by lower price people pay for fuel. Only this may very well be quite different group of people with completely different real impact. Some people may suddenly find themselves in a situation when they are simply unable to pay the increased new free market price for food, they were pushed out of the market. From the point of view of free market they may as well be dead, they have no longer any influence on the market price of the given good. And in this particular example they could really die of starvation, the free markets could not care less.

  38. Gravatar of Bill Ellis Bill Ellis
    15. August 2012 at 12:15

    TallDave says…

    <blockquote
    And no one had to force anyone to come up with ways to improve the lot of the masses, by and large innovators did it for their own profit (and there were probably a hundred failures for every success).

    I did not know we were living in a libertarian Utopia.

    I have been suffering from the illusion that we have had the government coming up with all kinds of regulations to “improve the lives of the masses”.

    I have been hallucinating that the the bulk of the government spending goes to programs that “improve the lives of the masses” by giving money to them in times of need or old age.

    I actually believed that before these government figments of my imagination that most of the elderly lived under crushing poverty. And during economic down turns the unemployed were forced into homelessness and large sections of the population especially children starved.

  39. Gravatar of Greg Ransom Greg Ransom
    15. August 2012 at 12:35

    Scott for Central Planner …

  40. Gravatar of JVM JVM
    15. August 2012 at 12:52

    Wait 100 sq m as in 1000 sq. feet? That’s huge! In New York we call that a palace.

  41. Gravatar of John John
    15. August 2012 at 12:54

    Yichuan was right to point out opportunity cost. That’s something a lot of macro guys ignore. There are a lot of empty new buildings that I’ve seen in China, in a free market system, resources would probably have flown into things that were more profitable and hence more useful to society.

  42. Gravatar of Major_Freedom Major_Freedom
    15. August 2012 at 13:00

    John, have you seen the Chinese ghost cities?

    http://www.youtube.com/watch?v=rPILhiTJv7E

  43. Gravatar of Major_Freedom Major_Freedom
    15. August 2012 at 13:02

    These ghost cities add to GDP, which in China is the market monetarist equivalent of NGDP.

  44. Gravatar of Major_Freedom Major_Freedom
    15. August 2012 at 13:09

    J.V. Dubois:

    Free markets can go very wrong. Increased price of agricultural products due to innovation in production of biofuels is supposed to be pecuniary externality: the higher price people pay for food is offset by lower price people pay for fuel.

    You do realize that the government subsidizes biofuel, thus increasing its price, right?

    In a free market, the rise in price of biofuels would be caused by the extent to which the value of biofuels rises relative to other things. Why is that “very wrong”?

  45. Gravatar of TallDave TallDave
    15. August 2012 at 13:12

    J.V. — Thanks. Many did in fact argue that at the time of course, even in the West, but the obvious flaw in that argument is that virtually all the improvements in Soviet lifestyles were the result of adopting technology already developed in the West — and without ever achieving the promised benefits from centralization that would allow them to fulfill the promise to exceed the median living standards of the bourgeois capitalists (something the Bolsheviks, Leninists, Stalinists, and post-Stalinists were all quite painfully aware of).

    People want to eat more than they want to drive; in no free market will biofuels ever result in famine. The main reason we make biofuels today is because of huge gov’t subsidies.

    Really though my point is just that one shouldn’t argue against inequality on the basis of resource scarcity — in the absence of rentseeking, the Waltons and the Jobs get rich making everyone’s lives better, because markets exist to provide opportunities for everyone to engage in value-added exchange — those who get rich do so precisely by engaging in many transactions that make both parties better off.

    Bill — Let me welcome you to the real world, where all that is made possible by the productivity growth and innovation in the private sector. I think we can all agree that (for instance) OSHA rules and a SocSec system that provides every senior with a livable income are largely a good thing, but that’s different than saying we could have afforded similar levels of such things in 1912. Imposed inefficiencies/costs (even desirable ones!) have to be paid for somehow.

  46. Gravatar of Mike Sax Mike Sax
    15. August 2012 at 13:18

    “Oh come on, surely the rich guy’s joy ruins your own!”

    See Morgan that’s where you have liberals wrong. The trouble today is that there’s so little social mobility. The US aint what it used to be.

    You think it’s just about stopping the rich guy’s joy. To the contrary my friend, what you hate is the joy of those that are not rich.

    In your mind if you’re not rich you aren’t deservating of anything. so if the government does anything to alleviate things or make it at all easier it drives you crazy! You want the “unproductive” to know nothing but misery.

    It’s cause consevatives think life is just one big dumb Aesop’s fable.

    “We saved enough corn and you didn’t so Ha Ha!”

  47. Gravatar of Bill Ellis Bill Ellis
    15. August 2012 at 13:22

    TallDave,

    “Let me welcome you to the real world, where all that is made possible by the productivity growth and innovation in the private sector. I think we can all agree that (for instance) OSHA rules and a SocSec system that provides every senior with a livable income are largely a good thing, ”

    Right. I agree…But that is a long way from what this Talldave said….”And no one had to force anyone to come up with ways to improve the lot of the masses, by and large innovators did it for their own profit “

  48. Gravatar of Bill Ellis Bill Ellis
    15. August 2012 at 13:26

    TallDave.

    Let me amend that… “all that is made possible by the productivity growth and innovation in the private sector.”… Aided buy government investment, research and regulations.

  49. Gravatar of Bill Ellis Bill Ellis
    15. August 2012 at 13:29

    Talldave,

    Also…You and I can agree…”that (for instance) OSHA rules and a SocSec system that provides every senior with a livable income are largely a good thing.”

    But a lot of people who post here do not.

  50. Gravatar of Major_Freedom Major_Freedom
    15. August 2012 at 13:40

    Mike Sax:

    See Morgan that’s where you have liberals wrong. The trouble today is that there’s so little social mobility. The US aint what it used to be.

    That’s because there are more state regulations than there used to be, thanks to you liberals.

  51. Gravatar of Bill Ellis Bill Ellis
    15. August 2012 at 13:46

    The elite have never let the invisible hand tell them what to do and never will.
    Certainly “getting the government out of the way” of the elite won’t make them.

  52. Gravatar of Bill Ellis Bill Ellis
    15. August 2012 at 13:54

    Social mobility is higher in “Socialist” Western Europe than in the USA.

    But many on the right prefer the myth to the reality…

    Rep. Paul Ryan (R-Wis.) declared, “Class is not a fixed designation in this country. We are an upwardly mobile society with a lot of movement between income groups.” Ryan contrasted social mobility in the United States with that in Europe, where “top-heavy welfare states have replaced the traditional aristocracies, and masses of the long-term unemployed are locked into the new lower class.”

  53. Gravatar of Mike Sax Mike Sax
    15. August 2012 at 13:55

    “That’s because there are more state regulations than there used to be, thanks to you liberals.”

    Nope. It’s actually because of conservatives like yourself spreading such urban legends.

  54. Gravatar of Mike T Mike T
    15. August 2012 at 14:00

    Bill Ellis:
    “Let me amend that… “all that is made possible by the productivity growth and innovation in the private sector.”… Aided buy government investment, research and regulations.”

    >> Bill, what examples would you cite illustrating that private sector innovation and productivity growth was “aided by govt investment, research, and regulations” that would have not otherwise occurred without this government “assistance?”

    “The elite have never let the invisible hand tell them what to do and never will.”

    >> That’s because the elite generally use the state as a means to protect their profits and wealth. Unfortunately, the state has been all-too-accommodating to oblige with the ignorant endorsement of the people under the guise that state “regulations” are designed to protect the general public.

  55. Gravatar of Mike Sax Mike Sax
    15. August 2012 at 14:06

    “Social mobility is higher in “Socialist” Western Europe than in the USA.”

    Good point Bill. Of course for Right wing ideolouges the facts don’t matter only their theories which say that can’t be true.

  56. Gravatar of Morgan Warstler Morgan Warstler
    15. August 2012 at 14:53

    Sax,

    I think MFwill likely agree with this, and I suspect it might do quite a bit for you in adopting a more libertarian outlook.

    It is topical so i bring it up.

    I support MAXIMIZED Land Taxes. meaning, I want land taxes to be treated as the ultimate pigovian tax – the highest taxes consumption.

    Passing on land from heir to heir, even for the celebrated family farmer etc.is as close as I can come to questioning the luck of birth.

    I come to this from California and Texas land tax policies.

    In Cali, there are millions of effective squatters who bought a house 20+ years ago and pay taxes on the original purchase price.

    In Texas, the taxman comes around and runs the nubers on your place every year.

    So if you have a beat up neighborhood, and one guy come in and demolishes a knockdown and puts up something worth 4x as much, his neighbors have their tax bills 2x 3x.

    This promotes urban renewal, it promotes creative destruction, it promotes the young and the new.

    And if we’re going to ave taxes, we ought to start with property tax that treats land as CONSUMPTION as a LUXURY.

    Get as much out of land taxes as you can. Then tax less on home value, but still tax it pretty good.

    —-

    I also suspect MF (like Scott) supports the idea of treating corporate expenses like jet rides, and vegas conventions, and steak diners as personal consumption.

    So even if we have zero corporate taxes, we’ll make damn sure that nobody is hiding a luxurious life behind the facade of doing business.

    —-

    I bring these examples up because there is a real difference between wanting a far smaller, market oriented system, and being int he pocket of the rich.

    They can and will CONSUME LESS if you have zero corporate taxes, and every luxury they enjoy counts as their income.

    And once you look at land like it is a different kind of property, one that overly rewards the ones who came before, you get a different kind of capital mobility…. owning beachfront property can be REALLY expensive, expensive enough that big lots get smashed up into small ones (the way Matty wants), and everybody really does want to build straight up.

    It isn’t about servicing the interestes of the rich, it really is about limiting the distortions on the market to the greatest extent possible.

  57. Gravatar of Doug M Doug M
    15. August 2012 at 14:56

    “See Morgan that’s where you have liberals wrong. The trouble today is that there’s so little social mobility. The US aint what it used to be.”

    Go through the Forbes 400. How many on the list are there because of inheritance. The Waltons — but the bulk of that list is self made. How many on that list were not on that list 10 years ago? The tranfer of wealth is increadibly dynamic.

  58. Gravatar of Morgan Warstler Morgan Warstler
    15. August 2012 at 15:00

    Sax, this makes you just sound silly…

    “Nope. It’s actually because of conservatives like yourself spreading such urban legends.”

    Dude, Dodd-Frank vs. Glass-Steagall – here’s a great example where I dont really care exactly about the laws passed, the rules we play by…

    What matters is that the law was SIMPLE – it means LESS LAWYERS, less REGULATORS, less PUBLIC EMPLOYEES.

    Rules used to HAVE TO be simple because there were less public employees to enforce them.

    it is just a fact.

    The time will come when real progressives will be forced to think hard about how to make every single law EASY and SIMPLE and need very few public employees…

    because those laws will be the only ones that reduce friction.

    Systems don’t like friction.

  59. Gravatar of Mike Sax Mike Sax
    15. August 2012 at 15:10

    “Dodd-Frank vs. Glass-Steagall – here’s a great example where I dont really care exactly about the laws passed, the rules we play by…”

    Morgan my friend, two thoughts.

    1. This has nothing to do with the drop in social mobiliity

    2. Notice how the global financial crisis happeend before Dodd-Frank that even now hasn’t even realy gotten off the ground yet-there has been so much kvethcing about this law just like ACA and neitehr is even here yet-and after Glass-Steagall was gutted.

    If we look at the age of social mobility in this country-the late 40s to the late 70s they coincide with a period of stronger bank regulation.

    Oerall though I see you’re bringing up Dodd-Frank as tangenital. It has no direct bearing on social mobility.

  60. Gravatar of Mike Sax Mike Sax
    15. August 2012 at 15:12

    “Go through the Forbes 400. How many on the list are there because of inheritance. The Waltons “” but the bulk of that list is self made. How many on that list were not on that list 10 years ago? The tranfer of wealth is increadibly dynamic.”

    Doug looking at the Fortune 400 isn’t going to prove that soical mobliity is up. The question is how much people who are born with modest or even poor means can rise up not how much more the 1% are getting.

    We know that only the 1% are getting anywhere in this country anymore-ie, are actually getting richer.

  61. Gravatar of Mike Sax Mike Sax
    15. August 2012 at 15:17

    Morgan as far as your idea about property-it’s interesting. I got to chew on it a bit first.

    I do like the idea from how I see Ygelsias argue for the progressive consumption tax.

    so maybe you have something here.

  62. Gravatar of Morgan Warstler Morgan Warstler
    15. August 2012 at 16:10

    1. DF vs GS had nothing to do with social mobility – point is that the rule itself means much less to me than whether the rule is SIMPLE and EASY and requires less public employees.

    2. Hey look the Doves are being Hawks!

    http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2011/12/2012%20Voters.jpg

  63. Gravatar of Doug M Doug M
    15. August 2012 at 16:25

    Less than half of the 1% will be in the 1% ten years from now.

  64. Gravatar of Doug M Doug M
    15. August 2012 at 17:02

    The greatest age of social mobility was 1865-1890. The next great age of social mobilty was 1980-2000.

  65. Gravatar of dtoh dtoh
    15. August 2012 at 17:03

    Charger Carl,

    Why not just build taller buildings?

    Don’t disagree. Just a question of figuring which is more efficient.

    IMHO – You need taxes to make the real estate markets as liquid as possible (e.g. nil transactions taxes and high taxes on holding property). You need reasonable land use laws (there are externalities with tall buildings). You need to make sure you are not subsidizing credit. After that the market can figure it out.

  66. Gravatar of Major_Freedom Major_Freedom
    15. August 2012 at 17:14

    Mike Sax:

    “That’s because there are more state regulations than there used to be, thanks to you liberals.”

    Nope. It’s actually because of conservatives like yourself spreading such urban legends.

    I’m not a conservative. Generally speaking, in the US I am understood as socially liberal and fiscally conservative.

    And it’s not a legend. It’s the truth. Social mobility is maximized when individuals have the maximum freedom to economically compete. Since the last few generations, especially the last few decades, have seen growing numbers of state regulations, these regulations have increased rigidity and decreased economic freedom. Hence social mobility has decreased.

    The facts contradict your claims. The list of alphabet soup regulatory agencies, and the list of regulations in the federal register, have all dramatically increased over time.

    You liberals like to spread the myth that more statism is synonymous with “progressivism” and more freedom.

  67. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    15. August 2012 at 21:29

    ‘…after Glass-Steagall was gutted.’

    By eliminating two of thirty-four provisions?

  68. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    15. August 2012 at 21:31

    ‘We know that only the 1% are getting anywhere in this country anymore-ie, are actually getting richer.’

    What country is that? In the one I live in even low income people have an astoundingly large amount of stuff. Obesity is a much bigger problem for the ‘poor’ than malnutrition.

  69. Gravatar of ChargerCarl ChargerCarl
    15. August 2012 at 23:17

    “ChargerCarl,
    Are you a San Diego Charger fan too ?”

    Hell yeah I am. 😀

  70. Gravatar of Benny Lava Benny Lava
    16. August 2012 at 04:51

    J.V. Dubois,

    I have seen a lot of US housing demolished because of vacancy. Banks were poorly equipped to hold large numbers of vacant properties and these were later condemned. It is rather curious why the banks wouldn’t just auction them off with no floor but this is where we are. By the way have you seen the vacan housing in Detroit? An example of “no buyer at any price” if there ever was.

  71. Gravatar of Morgan Warstler Morgan Warstler
    16. August 2012 at 05:23

    Benny,

    you are talking out your ass, WHERE are you living that banks are demolishing house after house??

    Can you give me numbers?

    “but this is where we are”

    dude, listen to yourself.

    There are such things as knocks downs. Either to build on the land, or to keep suffering liability in fallow housing.

    But IF a house is both livable (without a bunch of costs to fix up) and it gets knocked down instead.

    PLEASE show us.

  72. Gravatar of FormerSwingVoter FormerSwingVoter
    16. August 2012 at 05:59

    Morgan,

    It’s hard to find solid data, but there are quite a few anecdotal articles floating around in the news. It appears to be based in the hardest-hit cities, like Detroit.

    This cropped up in a few magazines and papers in mid-to-late 2011, anyway.

    Example:
    business.time.com/2011/08/01/bulldoze-the-new-way-to-foreclose/

    A quick Google search will get you a lot of articles like this one, but not a lot of actual data.

  73. Gravatar of Morgan Warstler Morgan Warstler
    16. August 2012 at 07:54

    FormerSwingVoter,

    Google is my friend. It loves me.

    If the data was out there, I wouldn’t be asking Benny for it.

    The point is HOW Benny’s mind works.

    “but this is where we are”

    as if this is actually the state of things, as if this is what ca; capitalism has brought us to.

    There are indeed such a thing as ghost towns. Look on google.

    There is no guarantee you can run you town anyway you want and it survives.

    but that is not the point Benny was making because Benny is DIVORCED from reality.

  74. Gravatar of Bill Ellis Bill Ellis
    16. August 2012 at 08:10

    Mike T

    That’s because the elite generally use the state as a means to protect their profits and wealth. Unfortunately, the state has been all-too-accommodating to oblige with the ignorant endorsement of the people under the guise that state “regulations” are designed to protect the general public.

    I agree for the most part. Though I would argue that some of the regulations do genuinely protect the public. Before the age of modern “democracies” governments were almost exclusively an instrument of the elite. Since then we have had a situation where the common man has been able to make the government partially his instrument too.

    The truth is the elite will always make the government their instrument…(That you libertarians think that can be stopped is your utopian flaw. )

    When you guys can show me that I am wrong about that, then I will stop advocating that the common man make the government his instrument too. If you want to convince people like me…go after socialism for the elite first…then get back to us when you have that fixed.

    If the elite can not be prevented from rigging the government to serve them…then it is Immoral to ask the common man not to try and do the same.

  75. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    16. August 2012 at 08:48

    ‘If the elite can not be prevented from rigging the government to serve them…then it is Immoral to ask the common man not to try and do the same.’

    That’s a big ‘if’. But, given the track record of government being manipulated to the interests of ‘the rich’, doesn’t that suggest that ‘the common man’ will probably be unsuccessful in the competition?

    Wouldn’t it be less ‘immoral’, as well as more likely to succeed, to challenge the idea that it is government’s role to favor one group over another?

  76. Gravatar of Mike T Mike T
    16. August 2012 at 09:07

    “The truth is the elite will always make the government their instrument…(That you libertarians think that can be stopped is your utopian flaw. )”

    >> Actually, this is the utopian flaw of progressives and modern liberals, not libertarians. The former want to use the same government as a means for stopping the elites from using it as their instrument. As Patrick notes, is there any reason to believe that the “common man” would ever be successful in competing with elites on this matter? Libertarians want to limit the role of government itself. Forgive me if I’m incorrect, but it seems your hypothetical presupposes that the current scope and role of our government is necessary and shouldn’t be challenged, and that what should be challenged is “who” is reaping the benefits and privileges, rather than questioning “whether” these benefits and privileges should be granted by government in the first place.

  77. Gravatar of TallDave TallDave
    16. August 2012 at 09:18

    Bill — But all government spending must be seized from the private sector, which is where all the gains originate — if we still had 1912’s private sector, we would also still have 1912’s scope of government. The reverse is much less true.

    Mike — The trouble today is that there’s so little social mobility.

    I don’t know why people say this, very few hardworking people get stuck in the lowest quintiles for a long time. And I personally know a dozens of people born in Third World countries who are in the top decile today.

    To the extent social immobility exists, it is a function of choice — lots of people do, in fact, choose to be lazy and poor instead of working 70-hour weeks. Given their living standards, I don’t think one can even characterize their behavior as irrational.

  78. Gravatar of Major_Freedom Major_Freedom
    16. August 2012 at 09:20

    Bill Ellis:

    If the elite can not be prevented from rigging the government to serve them…then it is Immoral to ask the common man not to try and do the same.

    It would also be immoral to insist that the state remains, for then in your own worldview you would only be perpetuating the elite “rigging” the government to serve them (which of course requires people in government willing to impose costs on the common man in order to benefit the elite.

  79. Gravatar of Bill Ellis Bill Ellis
    16. August 2012 at 09:24

    Patrick R. Sullivan,

    I don’t agree that it is a big “if”. I think it has always been so. I think Adam Smith saw it too. I think the vast bulk of history shows it. But perhaps you could make a case for an alternative history.

    Don’t get me wrong, I am not advocating for a struggle where the goal is for the common man to make the government his instrument exclusively. ( It would be a disaster if he did )…The common man will never wield the power over the government that the elite will. But he can blunt the power of the elite. He can get a better deal.

    And, sure it would be less immoral to stop the government from favoring one group over another VS having different groups competing to advance their self interests by influencing the government….But more likely ? I don’t think so.

    I think to believe it is more likely is to ignore basic human nature… It is to ignore that power corrupts…It is to ignore that people are lazy and greedy…It is to ignore that people will try and do what they “believe” is in their individual best interests.

  80. Gravatar of Doug M Doug M
    16. August 2012 at 09:29

    “The truth is the elite will always make the government their instrument…(That you libertarians think that can be stopped is your utopian flaw. )

    If the elite can not be prevented from rigging the government to serve them…then it is Immoral to ask the common man not to try and do the same.”

    The government in Corrupt — or corruptable. Not necessarily any more so than other institutions in this country, and perhaps less so. The Libertarian goal then comes to limiting concentrations of power.

    However, the libertarians are doomed. Most, with the libertarian mindset will pursue “honest work” in the private sector. “Small Government” Republicans become big governement Republicans as soon as they get a hold of the reigns of power. “The Beast” will not strave itself.

  81. Gravatar of Major_Freedom Major_Freedom
    16. August 2012 at 10:30

    Bill Ellis:

    Don’t get me wrong, I am not advocating for a struggle where the goal is for the common man to make the government his instrument exclusively. ( It would be a disaster if he did)

    Oh so you adhere to a view of the state that Bastiat aptly described:

    “The state is that great fiction by which everyone tries to live at the expense of everyone else.”

    You don’t want one rigidly defined group living at the expense of another rigidly defined group by using the state. You want everyone to live at the expense of everyone else by using the state. Make the exploiters and exploitees “open” to everyone, and make the two groups as amorphous and fuzzy as possible, so that nobody can nail you with “So you favor rigidly defined group X benefiting themselves using the state at the expense of group (100% – X).” Like Superman deflecting bullets…

  82. Gravatar of Major_Freedom Major_Freedom
    16. August 2012 at 10:36

    Doug M:

    Libertarianism is not doomed. Social democracy is doomed.

    Did you know that the Social Security Administration is set to purchase 174,000 rounds of ammunition?

    https://www.fbo.gov/index?s=opportunity&mode=form&id=6c39a2a9f00a10187a1432388a3301e5&tab=core&_cview=0&fb_source=message

    First it was the DHS, then it was the NOAA (The National Oceanic and Atmospheric Administration), and now it is the SSA.

    Why are all these institutions buying so much ammo all of a sudden? I can guess.

  83. Gravatar of Doug M Doug M
    16. August 2012 at 11:06

    MF,

    The libertarians have something that is nice in theory.

    In theory, there should be no difference between theory and practice. In practise, there is.

    If people were rational we wouldn’t need government.

  84. Gravatar of Mike T Mike T
    16. August 2012 at 11:10

    “Why are all these institutions buying so much ammo all of a sudden? I can guess.”

    Perhaps NOAA climatologists are rethinking ways to “combat” global warming?

    More and more government agencies are being militarized while major media outlets ignore what is newsworthy and instead indulge in sensationalizing trivialities. Kind of like how the NY Times feels some sort of editorial need to inject Julian Assange’s toilet flushing habits in the asylum story. High comedy:
    http://www.nytimes.com/2012/08/17/world/americas/ecuador-to-let-assange-stay-in-its-embassy.html?hp

  85. Gravatar of Mike T Mike T
    16. August 2012 at 11:33

    So I guess the NY Times had 2nd thoughts:
    http://gregmitchellwriter.blogspot.com.br/2012/08/nyt-flushes-assange-charges.html

  86. Gravatar of Major_Freedom Major_Freedom
    16. August 2012 at 11:59

    Doug M:

    The libertarians have something that is nice in theory.

    In theory, there should be no difference between theory and practice. In practise, there is.

    The only theory that isn’t different from practise is “whatever happens is optimal.” The status quo. No arguments can be made against anything that ever transpires, because any argument against what transpires, will necessarily entail a difference between theory and practise.

    As such, even your argument against me, would have to be considered wrong, because here I am in reality doing such and such, and yet there you are trying to convince me to do something else, which would immediately introduce a schism between theory and practise.

    In short, you’re taking the status quo as a religion.

    If people were rational we wouldn’t need government.

    If people are not rational, then your statement would invariably be the product of irrational convictions, and hence there would be no reason for me to accept it as true.

    Your attempt to be “reasonable”, “pragmatic”, and somewhat cynical, has inadvertently undercut your entire thesis.

  87. Gravatar of Major_Freedom Major_Freedom
    16. August 2012 at 12:08

    Mike T:

    Perhaps NOAA climatologists are rethinking ways to “combat” global warming?

    I have long suspected that the global warming movement, despite many of its members being well-intentioned, has a seed of anti-capitalism in it. After the Berlin wall came down, socialists found cover in the global warming movement that persists to this day. It is amazing how many distortions and lies come out of it. It’s a serious issue, but it’s being used for political agendas.

  88. Gravatar of Major_Freedom Major_Freedom
    16. August 2012 at 12:23

    Mike T:

    What’s amazing to contemplate is how John Corzine can steal $200 million of his client’s money and get a free pass, but a man who exposed war crimes, is upsetting America’s lapdog Britain so much that they are threatening to raid Ecuador’s embassy if they don’t hand him over.

    The level of corruption is truly astounding.

  89. Gravatar of Doug M Doug M
    16. August 2012 at 12:34

    “Your attempt to be “reasonable”, “pragmatic”, and somewhat cynical, has inadvertently undercut your entire thesis.”

    MF, you are assuming I had a point! No, just some stolen ideas from great two American philosophers.

    To actually make a point – most people are well behaved, law abiding, rational, and generally good. A minority are not. The bulk of the apparatus of government exists to protect the good from the evil. Furthermore, an inordinate number of sociopaths rise to positions of power. And so, we need checks to protect the people from their government.

    And now for some cynicism… Government is incapable of fixing itself. The stink of politics is off-putting; intelligent respectable people have no interest in pursuing public service. The people might drain the swap don’t seek office. This leaves the swamp rats in charge. The swamp rats are not going to change the system. We have vacuum of competence at all levels of government. This means that I see nothing but a future of more of the same. The only thing that saves us is the incompetence and infighting of the political class keeps them from maximizing their damage.

    And now a quote from another great 20 century philosopher — “Anyone capable of getting themselves elected President should by no means be allowed to hold the job.”

  90. Gravatar of Mike T Mike T
    16. August 2012 at 12:48

    “It is amazing how many distortions and lies come out of it. It’s a serious issue, but it’s being used for political agendas.”

    >> No doubt, MF. It was just a lame attempt at humorizing an otherwise despicable trend with our federal govt. The greater irony surrounding those who politicize the global warming (or climate change) debate is the fact that governments (especially the US, and especially the Pentagon) have historically been the biggest sources of pollution!

    “What’s amazing to contemplate is how John Corzine can steal $200 million of his client’s money and get a free pass, but a man who exposed war crimes, is upsetting America’s lapdog Britain so much that they are threatening to raid Ecuador’s embassy if they don’t hand him over.

    The level of corruption is truly astounding.”

    >> Don’t even get me started on this. It has ventured into the realm of the absurd. Governments and their benevolent public servants are becoming increasingly worse parodies of themselves. Let’s hope Ecuador stands strong on this one. Although, I see the most compelling story surrounding this fiasco being how journalists cover it. It’s quite revealing and pathetic how many continue to demonize Assange.

  91. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    16. August 2012 at 14:28

    ‘It is to ignore that power corrupts…’

    Then it will corrupt ‘the common man’ too. Seems like if you believe that then you ought to be in favor of limiting ‘that power’, not increasing it to more and more people.

  92. Gravatar of Jim Glass Jim Glass
    16. August 2012 at 14:30

    If people were rational we wouldn’t need government.

    People *are* rationale and that’s why we do need government, to have a monopoly over violence to keep people from using it massively against each other all the time.

    Nothing is *more rationale* than: I’m stronger than you so I am going to take your stuff, rape your women, and kill you and your children or sell you into slavery. The cost-benefit analysis is really superior!

    It is government’s monopoly of force that stops this, and propels the first big step in societal advancement that increases human welfare — stopping the massive violence that kills people and blocks economic development.

    Yes, this is true even in the historically typical case of the monopoly of violence being held by a murderous, entirely exploitative state regime of an emperor, king, warlord, mafia don, or whatever.

    “the percentage of the population that died violently was on the average higher in traditional pre-state societies than it was even in Poland during the Second World War or Cambodia under Pol Pot.”
    Jared Diamond.

    See: all of history in general, or “ Violence and Social Orders” by Nobelist Douglas North, et. al., in particular. (All libertarian theory to the contrary notwithstanding.)

    Alas, people in government are rational too, and having a monopoly of force they have every incentive to use it on their own behalf as well, as murderous exploiters or whatever way they can.

    So the *second* big step in societal advancement that increases human welfare further is finding ways to prevent those governmental holders of the monopoly of violence from doing so.

    Considering the large number of societies that haven’t accomplished this at all, even the 21st Century, and the various limited degrees of achievements of the rest in doing so … this is not so easy.

    (All libertarian theory that it is easy notwithstanding.)

  93. Gravatar of Doug M Doug M
    16. August 2012 at 16:00

    Getting back on topic…In my research package today:

    China – Largest country in the world (2012 population estimated at 1.343 billion). The agricultural
    transformation began in 1979 with the reforms instituted by Deng Xiaoping but appears to have stalled since then
    with agricultural density no better than it was in 1960. As of 2008, agriculture still represented 39.6% of all
    employment. The level of urbanization has increased but it is still only slightly above the world average.

    Perhaps the great urban migration is overstated.

    China also has one of the lowest utilizations of farm machinery in Asia, wich does not say much for increasing ag productivity.

  94. Gravatar of Jim Glass Jim Glass
    16. August 2012 at 16:07

    Now I composed and checked that link to North’s book in an HTML editor, which said it was fine.

    Sorry about that.

  95. Gravatar of Bill Ellis Bill Ellis
    16. August 2012 at 20:48

    Patrick R. Sullivan,

    (Me) ‘It is to ignore that power corrupts…’

    (Pat) Then it will corrupt ‘the common man’ too. Seems like if you believe that then you ought to be in favor of limiting ‘that power’, not increasing it to more and more people.

    By dividing and pitting the power of the coercive force of government between the elite and the common man you limit the power that either group has and therefor diminish the ability of the power to corrupt.

    Like I said …if I believed that we could keep the elite from making the government their instrument, I would be for keeping the common man from making it his.

    Libertarian philosophy rests on the belief that the elite can be kept from controlling the government…(A belief that I see no basis in history or human nature for believing.)
    If we can’t agree on this then we won’t agree on a host of things.

    But Some Libertarians agree with me on this.

    Some libertarians recognize that if the common man does not gain some control of the government that the elite will come to rule and will rig the game to them and their posterity’s benefit.
    These libertarians see the common man’s efforts to exercise the corrosive force government as immoral, while they see the elite exercising the corrosive force government as an earned right… Neo feudalist.

    But because we can’t agree on the morality we won’t agree on a host of things.

    Funny stuff.

  96. Gravatar of Razer Razer
    16. August 2012 at 21:33

    Bill, please point out those Libertarians who see “the elite exercising the corrosive force of government as an earned right.” I do not believe there are any Libertarians at all that espouse this viewpoint.

  97. Gravatar of doug M doug M
    16. August 2012 at 22:49

    Bill Ellis,

    Libertarian philosophy rests on the belief that the elite can be kept from controlling the government…

    No, no, no, no! you don’t get it.

    The libertarian philosophy rests on the beleif that the elite will always control the government.

    Therefore, the libertarian seeks to minimize the infulence of a government.

  98. Gravatar of Mike Sax Mike Sax
    17. August 2012 at 02:46

    “The libertarian philosophy rests on the beleif that the elite will always control the government.”

    “Therefore, the libertarian seeks to minimize the infulence of a government.”

    However what libertarians ignore is economic elitism.

  99. Gravatar of Major_Freedom Major_Freedom
    17. August 2012 at 03:28

    Mike Sax:

    However what libertarians ignore is economic elitism.

    Libertarians do not “ignore” it, they just don’t think it’s an evil like progressives and liberals believe it is an evil.

    What’s wrong with some people being relatively more productive than others, such that the relative extent of wealth inequality rises?

    I am not being robbed or harmed or aggressed against when someone else produces more than me, such that they earn more than me. I earn what I produce and sell. They earn what they produce and sell. It’s not a zero sum game.

    I WANT to live in a world of economic elites like Bill Gates and Steve Jobs. For the more economic elites there are, the more lower priced wealth is produced for my benefit! All I have to do is earn money myself, and I can buy wealth that I would never in a million years be able to produce myself!

  100. Gravatar of Mike T Mike T
    17. August 2012 at 04:16

    Mike Sax:
    “However what libertarians ignore is economic elitism.”

    >> In what way? And what exactly do you mean by “economic elitism?”

  101. Gravatar of Brock Brock
    17. August 2012 at 06:41

    Scott-

    Well then, you needn’t be concerned. Google “Sky City One” or “Broad Sustainable Group”. Mass-produced, factory manufactured skyscrapers in the 50 – 200 floor range (or higher – there’s no structural reason it couldn’t be twice as big) are coming this year to Chengdu. They’ll cost 1/5th per unit floor area what the Burj Dubai cost, and 1/20th what the Freedom Tower cost. Should house tens of thousands of people, plus municipal services, retail and business parks all within a single structure.

    Best part (besides the cost)? They can be built far more quickly than you can imagine. Sky City One, being built in Chengdu, will be the largest building in the world by both height and floor area – and it will be built in 90 days.

  102. Gravatar of doug M doug M
    17. August 2012 at 07:04

    “However what libertarians ignore is economic elitism.”

    It doesn’t exist.

    In every transaction the buyer and the seller are getting something that they want from one another. Every transaction is voluntary. Every transaction makes both parties richer.

    So what, if one party has outsized pricing power or is growing richer than everyone else.

  103. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 08:07

    doug M

    The libertarian philosophy rests on the beleif that the elite will always control the government.

    Therefore, the libertarian seeks to minimize the infulence of a government.

    I get that. That is what I am saying can’t be done. At least in regard to the elite.

    If the elite will always make the government their instrument, and if only the elite can make the governmt thier instrument…nothing can or will stop them from rigging the game for their benefit.
    What could ? What ever has ? The elite have never let the “invisible hand” tell them what to do. No mortality libertarian or otherwise can.

    The libertarian dream of “minimizing the infulence of a government” can only be fulfilled when it comes to the common man. (And that can be fulfilled easily ) Fulling that dream leaves only the elite in charge… making libertinism ultimately self-defeating… just like every utopian philosophy.

  104. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 08:23

    Razer,

    Really ? You have never run into guys like that ? They are all over the threads of red state, free republic, and politico. (all sites that I have been banned from)

    Most of them are Randies…

    “There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.”…Kung Fu Monkey

    You can say that it is misreading Rand to think she was was advocating neo feudalism…but I am surprised you never ran into anyone that was brought to those beliefs by reading her.

  105. Gravatar of Major_Freedom Major_Freedom
    17. August 2012 at 08:24

    Bill Ellis:

    If the elite will always make the government their instrument, and if only the elite can make the governmt thier instrument…nothing can or will stop them from rigging the game for their benefit.

    Sure there is. The state can be abolished and there will be no longer be any state for the elite to rig.

    What could ?

    Ideas.

    What ever has ?

    Actions based on ideas.

    The elite have never let the “invisible hand” tell them what to do. No mortality libertarian or otherwise can.

    Mortal.

    And yes, libertarianism certainly can overturn the state. All that is needed is for ideas to change, and that can take place no matter what political philosophy is being practised. If ideas couldn’t change, then humans would never have moved beyond tribal warlords.

    Territorial monopolies of security and protection (states) require a gigantic intellectual investment. These ideas not inevitable. Humans can learn.

    The libertarian dream of “minimizing the infulence of a government” can only be fulfilled when it comes to the common man.

    That is just neo-Marxist claptrap that views the proletariat as history’s engine of progression.

    Wealthy people can and do want anarchy you know. Not all wealthy people want more statism.

    (And that can be fulfilled easily ) Fulling that dream leaves only the elite in charge… making libertinism ultimately self-defeating… just like every utopian philosophy.

    False. With the abolition of the state, there is nobody in charge.

  106. Gravatar of Major_Freedom Major_Freedom
    17. August 2012 at 08:27

    Razer said:

    Bill, please point out those Libertarians who see “the elite exercising the corrosive force of government as an earned right.” I do not believe there are any Libertarians at all that espouse this viewpoint.

    Bill Ellis responded:

    Really ? You have never run into guys like that ? They are all over the threads of red state, free republic, and politico. (all sites that I have been banned from)

    Randianism (Objectivism) is not Libertarianism. Rand loathed libertarianism:

    Q: What do you think of the Libertarian movement? [FHF: “The Moratorium on Brains,” 1971]

    AR: All kinds of people today call themselves “libertarians,” especially something calling itself the New Right, which consists of hippies, except that they’re anarchists instead of collectivists. But of course, anarchists are collectivists. Capitalism is the one system that requires absolute objective law, yet they want to combine capitalism and anarchism. That is worse than anything the New Left has proposed. It’s a mockery of philosophy and ideology. They sling slogans and try to ride on two bandwagons. They want to be hippies, but don’t want to preach collectivism, because those jobs are already taken. But anarchism is a logical outgrowth of the anti-intellectual side of collectivism. I could deal with a Marxist with a greater chance of reaching some kind of understanding, and with much greater respect. The anarchist is the scum of the intellectual world of the left, which has given them up. So the right picks up another leftist discard. That’s the Libertarian movement.

  107. Gravatar of Major_Freedom Major_Freedom
    17. August 2012 at 08:34

    Jim Glass:

    People *are* rationale and that’s why we do need government, to have a monopoly over violence to keep people from using it massively against each other all the time.

    Nothing is *more rationale* than: I’m stronger than you so I am going to take your stuff, rape your women, and kill you and your children or sell you into slavery. The cost-benefit analysis is really superior!

    It is government’s monopoly of force that stops this, and propels the first big step in societal advancement that increases human welfare “” stopping the massive violence that kills people and blocks economic development.

    It’s funny that you don’t even see the blatant contradiction inherent in your belief system.

    You’re effectively saying “Violence should be stopped, so let’s set up a monopoly that initiates violence against everybody.”

    And people like you are surprised when governments go out and kill over 200 million, in “peacetime” <- Orwell at its finest, during the 20th century alone? Governments have killed more innocent people than the most ruthless mass murdering "civilians" who ever lived.

    Nothing is more IRRATIONAL than to believe that violence can be minimized by legalizing it.

  108. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 08:35

    doug M

    (Sax)”However what libertarians ignore is economic elitism.”

    (Doug) It doesn’t exist.

    In every transaction the buyer and the seller are getting something that they want from one another. Every transaction is voluntary. Every transaction makes both parties richer.

    Even when Monopolies and oligarchy are in place ?
    Even if what you say is still true, the voluntary nature of the exchange is not meaningful if the choices are restricted by those in power, and limiting the choices allows those in power to “enrich” the party out of power at a subsistence level.

  109. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 08:42

    Major Anarchy,

    Something something, exasperation, something something…

  110. Gravatar of Vivian Darkbloom Vivian Darkbloom
    17. August 2012 at 09:13

    “So the *second* big step in societal advancement that increases human welfare further is finding ways to prevent those governmental holders of the monopoly of violence from doing so.”

    Most totalitarian states don’t have high murder rates or crime rates generally. There probably are no reliable statistics; however, I suspect North Korea’s crime rate is fairly low. So, the first problem is generally solved, often more than in democratic states. That is not necessarily the result of government holders of the monopoly of violence *exercising* that violence, but *threatening to do so if needed* (here, their powers resemble those of the Federal Reserve). In this respect, it will be interesting to see if the level of “hooliganism” in Russia will fall after today—or whether we’ll have an outbreak of pussy riots.

    So, no, unless you define “violence” to include abridging individual liberties and the rule of law, I don’t think this is the *second* big step. Rather, I think the second big step is the creation of a legal system that protects property rights, allows the peaceful and predictable resolution of disputes and, yes, protects individual liberties against government oppression. That explains the difference, I think, between the relative economic success of constitutional democracies over totalitarian regimes.

    As a lawyer, I’m quite proud of the contributions that my compatriots at the bar on the bottom of the ocean have contributed to our societal advancement and economic success.

    PS. Major Freedom: I did not interpret the original post as suggesting we create a government with monopoly power over violence that would use that power indiscriminately. Even rational dictators don’t do that—-it reduces potential sources of bribes, kickbacks and tax revenues. I have not consumed a great deal of libertarian literature; but my understanding is that serious libertarians view a police force as part of the necessary functions of government, so long as their “monopoly on violence” is tempered by the rule of law.

  111. Gravatar of Doug M Doug M
    17. August 2012 at 09:29

    “Even when Monopolies and oligarchy are in place ?”

    Yes.

  112. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 09:52

    Doug M

    Me…”Even when Monopolies and oligarchy are in place ?
    Even if what you say is still true, the voluntary nature of the exchange is not meaningful if the choices are restricted by those in power, and limiting the choices allows those in power to “enrich” the party out of power at a subsistence level.”

    Care to explain how this is wrong ?

  113. Gravatar of Doug M Doug M
    17. August 2012 at 10:03

    “Most totalitarian states don’t have high murder rates or crime rates generally.”

    Syria…

    Not many stories of killing fields of Gulags or concentration camps in non-totalitarian states.

    Stalin, Pol Pot, Adolph Hitler, Kim Jong Il, Sadam Hussein, Moa Tse Dong…no murders in those regeims.

  114. Gravatar of Mike T Mike T
    17. August 2012 at 10:06

    Bill Ellis:
    “Even if what you say is still true, the voluntary nature of the exchange is not meaningful if the choices are restricted by those in power, and limiting the choices allows those in power to “enrich” the party out of power at a subsistence level.”

    >> But Bill, aren’t you conflating here? The voluntary nature of the exchange is presupposing no force. In other words, a private company that achieves near monopolistic control in an industry because the consumer has overwhelmingly chosen their product/service over any other competitor does not presuppose some arbitrary restriction imposed by those in power. This should be distinguished by those private companies that achieve such power directly because of government privilege/benefits (eg via tariffs, subsidies, govt contracts, friendly regs that snuff out smaller competitors, etc), which has been the reason for nearly every instance of monopoly/oligopoly in US history.

  115. Gravatar of Vivian Darkbloom Vivian Darkbloom
    17. August 2012 at 10:21

    Doug M,

    I was obviously writing about the civilian crime rate.

    As for the other government-sponsored killings–yes, but please note that my comment was with respect to *rational* dictators. I don’t think any of those mentioned fit that description.

  116. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 10:49

    Mike T,

    Even companies that… “achieves near monopolistic control in an industry because the consumer has overwhelmingly chosen their product/service ” will use the government to keep …”such power directly because of government privilege/benefits (eg via tariffs, subsidies, govt contracts, friendly regs that snuff out smaller competitors, etc),”

  117. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 10:54

    I am a hamster on the wheel of libertarian objections to the fact that the elite are basically greedy and lazy and will do what ever they believe is in their best individual interests just like everyone else.

  118. Gravatar of Major_Freedom Major_Freedom
    17. August 2012 at 10:57

    Bill Ellis

    Even when Monopolies and oligarchy are in place?

    Of course. When you voluntarily trade, you expect to benefit, regardless if the other party is one seller among many, or a single seller.

    Even if what you say is still true, the voluntary nature of the exchange is not meaningful if the choices are restricted by those in power, and limiting the choices allows those in power to “enrich” the party out of power at a subsistence level.

    Your definition of “power” is an equivocation. Your actions limit the choices of everyone else in the world, who would like for you to behave in a certain way, to gain, but you’re not behaving in those ways, so they don’t gain. But when you trade, that is when your behavior does benefit another, and your power is exercised no less than their power. You can refuse to pay Wal-Mart, a company that earns hundreds of billions of dollars each year. But can you refuse to pay the IRS?

    You have to stop conflating political power (force) with economic power (wealth). They’re different. Bill Gates has no power over me. The state has power over me. Power in the force sense is the only real power. Do you have power over poor people in Africa just because you’re wealthier? Don’t be silly.

    Something something, exasperation about wealthy people, something something…

    Vivian Darkbloom:

    Most totalitarian states don’t have high murder rates or crime rates generally.

    Because when statesmen do X, it’s not a crime, right?

    PS. Major Freedom: I did not interpret the original post as suggesting we create a government with monopoly power over violence that would use that power indiscriminately.

    Except in statism, the state decides just how much state violence is justified.

    Even rational dictators don’t do that””-it reduces potential sources of bribes, kickbacks and tax revenues. I have not consumed a great deal of libertarian literature; but my understanding is that serious libertarians view a police force as part of the necessary functions of government, so long as their “monopoly on violence” is tempered by the rule of law.

    You’re referring to minarchist libertarianism, which when closely analyzed, is self-contradictory.

  119. Gravatar of Major_Freedom Major_Freedom
    17. August 2012 at 10:58

    Vivian:

    please note that my comment was with respect to *rational* dictators.

    Rational dictators…

    What do you mean by “rational”?

  120. Gravatar of Doug M Doug M
    17. August 2012 at 11:17

    Bill Elis,

    The libertarian doesn’t accept that monopolies are exploitive.

    If they are selling what I want to buy at a price I am willing to pay, that is all that matters. I am better off for having made the exchange. It shouldn’t matter what their profit margins are, or whether they could sell it to me for less, or whether they are the only game in town.

    Furthermore, many libertarians will beleive that the government protects monopolists. The monopolist coordinates with legislators to instituionalize the monopolists power. Regulations are written by and for the monopolist. Even if they are not, they regulators will soon enough become captured. Profitibilty is protected and and risks are socialized.

  121. Gravatar of Mike T Mike T
    17. August 2012 at 11:23

    “I am a hamster on the wheel of libertarian objections to the fact that the elite are basically greedy and lazy and will do what ever they believe is in their best individual interests just like everyone else.”

    >> Ok, I see what you’re getting at and I generally agree. So long as there is a government granting special priviliges/benefits, there will be willing buyers in private enterprise. But even this is an economic decision, because it becomes more cost-effective to lobby for these benefits than to naturally compete in the marketplace. So I don’t necessarily see it as being reduced to pure greed or laziness.

    This just gets us back to what was being discussed before regarding how to reduce these arbitrary power centers. It’s also important to note that the elite are not composed solely of those in the private sector. Government officials and major media are both part of this elite class. It’s a monumental task to effectuate change, because everyone who holds power (no matter how it’s derived) will not want to relinquish it and most of the public is not really calling for it. So, I would agree with MF above in that real change would have to come from a shift in ideas. If there are too few individuals that are sympathetic to some form of libertarianism, then I don’t see how anything will significantly change barring some kind of systemic collapse.

  122. Gravatar of Doug M Doug M
    17. August 2012 at 11:25

    Darkbloom,

    What about goon squads that freely rape, murder and intimidate.

    They are not organs of the state, but the state encourages them, nonetheless, to keep the populous in line.

  123. Gravatar of Major_Freedom Major_Freedom
    17. August 2012 at 11:26

    Good points Doug.

    I’ll add that monopolies exist everywhere in everything but the most homogeneous goods. Apple is the only seller of Apple products. Toyota is the only seller of Toyota products. McDonalds is the only seller of McDonald’s hamburgers. And so on. The only non-monopolists in this sense would be commodity producers, like rice, precious metals, iron, copper, salt, sugar, and so on.

    Worrying about monopolies is hokey and ancient thinking that doesn’t apply to a complex world full of diverse, heterogeneous goods and services, most of which are unique in their own ways.

    If Bill is the only seller of his style of crap economics lessons, I’d still not buy any from him.

  124. Gravatar of Vivian Darkbloom Vivian Darkbloom
    17. August 2012 at 12:06

    “What do you mean by rational”?

    I’m using the term in the same sense that it was used in the original post. There is no moral or ethical connotation to this usage. It means doing the things that logically will produce the results one desires. “I’m stronger than you are, so I’m going to take your stuff (or rape your women) is logical and rational, but it is certainly not moral or ethical.

    “What about goon squads”?

    Indeed, what about them? The original point was the first step in advancing societal welfare is to have government have a monopoly on violence. Absent this monopoly, don’t think there would be violence of an even greater degree?

    Tito might qualify as a rational dictator. When that “monopoly of violence” broke up, all hell broke loose and a lot of violence ensued. Hussein was likely not rational; he killed quite a number of people needlessly, but it’s clear that when that monopoly broke up, a lot of violence ensued. We are likely witnessing the same thing now in Syria.

    The history of violence in human history is largely the story of tribal warfare which was not checked by this “monopoly of violence”.

    Happily, this is not the end of societal development (we hope), but, as the original author pointed out, it is likely a necessary stage in that evolution.

  125. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 12:48

    Mike T

    So, I would agree with MF above in that real change would have to come from a shift in ideas. If there are too few individuals that are sympathetic to some form of libertarianism, then I don’t see how anything will significantly change barring some kind of systemic collapse.

    Yes. So to be a libertarian you have to believe that a global shift in Ideas can happen and be maintained …against the forces of basic human nature that compel us to do what is in our best individual interests .

    Every utopian Philosophy requires the same thing to be put into practice… that people’s ideas will/can shift to match the philosophy’s.

    It never happens. All efforts at reasoning into being fail.
    Eventually, if given the chance, the proponents of the utopian philosophy will try and Force the people to think the “right” way…and unorthodox thought becomes a crime…but even then, the orthodoxy of thought can not be fully instilled and maintained.

  126. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 12:53

    A utilitarian is someone who recognizes the futility of being an uncompromising utopian.

  127. Gravatar of Mike T Mike T
    17. August 2012 at 13:16

    “So to be a libertarian you have to believe that a global shift in Ideas can happen”
    >> 1. It doesn’t have to be global
    2. Global shifts in ideas have occurred throughout history

    “against the forces of basic human nature that compel us to do what is in our best individual interests”
    >> Huh? Libertarianism represents this basic idea. I’m not even sure what you are getting at here.

    “Every utopian Philosophy requires the same thing to be put into practice”
    >> Why do you keep repeating libertarianism as “utopian philosophy?” You have explained this yet. I’ve already argued that I would consider it quite the opposite.

    Sorry, Bill. With due respect, I really don’t understand what you are arguing. Furthermore, there is a movement in this country toward libertarianism. As a political party it is the 3rd largest and fastest growing. Independents make up the largest voting block, of which there is certainly a significant percentage who are libertarian leaning. Ron Paul, a Libertarian minarchist running for the Republican nomination, had to be systematically dismissed by the media and political establishment because of his popularity this past year.

  128. Gravatar of Mike T Mike T
    17. August 2012 at 13:17

    “You have explained this yet.”

    should be:

    “You haven’t explained this yet.”

  129. Gravatar of Major_Freedom Major_Freedom
    17. August 2012 at 13:19

    Bill Ellis:

    A utilitarian is someone who recognizes the futility of being an uncompromising utopian.

    No, that’s a pragmatist.

    A utilitarian is one who judges the ethical validity of actions according to the happiness (utility) the actions achieve.

  130. Gravatar of Doug M Doug M
    17. August 2012 at 13:21

    Vivian,

    I just had to keep myself from choking when you suggested totalitarian regimes have low murder rates…. But if we qualify the definition of murder to exclude murders by the state, and murders that the state chooses to ignore….

    So, let’s put aside the totalitarian regimes. Is it a good thing when the state has “a monopoly on violence”?

    Certainly there are the radical NRA type who will say that if everyone is armed there would be no mass shootings. Once the first shot was fired the gunman would be put down. I am not sure I can quite swallow that one. But, I do believe that the 2nd amendment is an individual right to gun ownership. There is a guy in my neighborhood who had 200+ tanks. There is a guy in LA with a squadron of 30 MiGs. I have to reject the assumption that the government has to have monopoly control on the means to perpetrate violence.

    Which gets me thinking about Old West vigilantism. The government had a minimal ability to enforce the law. The threat of reprisal kept looting and murder at bay. I am sure that life was brutal at times, and I don’t wish to live in such an environment, but I don’t see it as rampant lawlessness.

    Which gets us to truly rampant lawlessness — Liberia, Sierra Leone, Rawanda — societies on the edge of civil war. The bulk of the violence seems to be directed from the government against whatever minority groups the rebels claim to be representing. Is an “oligopoly” of violence the worst of all possible worlds?

  131. Gravatar of Major_Freedom Major_Freedom
    17. August 2012 at 13:35

    Bill Ellis:

    Yes. So to be a libertarian you have to believe that a global shift in Ideas can happen and be maintained …against the forces of basic human nature that compel us to do what is in our best individual interests.

    ALL ethics are “against the forces of basic human nature”, if by “basic human nature” you mean “whatever humans end up doing, as opposed to what they ought to be doing.”

    You cannot possibly argue against libertarian ethics by identifying the empirical fact that what people are doing is different from what the libertarian ethic holds people ought to be doing.

    By your logic, one can say “To be a [whatever it is Bill Ellis calls his chosen moral code] you have to believe that a global shift in ideas can happen and be maintained against forces of basic human nature that compel us to do what is in our best individual interests.”

    It’s interesting how in your quest to undercut the ethic that contradicts your own, you don’t even see that are using premises that undercut your own ethic.

  132. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 13:38

    A utilitarian is someone who recognizes the futility of being an uncompromising utopian.

    A pragmatist is someone who recognizes the futility of being an uncompromising utopian.

    These two statements are not mutually exclusive.

  133. Gravatar of Major_Freedom Major_Freedom
    17. August 2012 at 13:54

    Bill Ellis

    These two statements are not mutually exclusive.

    Nice try, but that’s false, for an “uncompromising utopian” can also be a utilitarian. A libertarian for example is uncompromising in the area of initiations of violence, and a libertarian can advocate for libertarianism on the basis that it achieves “the greatest happiness for the greatest number of people.”

    Of course I don’t justify libertarianism that way, but it is possible.

    Utilitarianism is the umbrella term for all ethics that justify actions according to the dictum “the greatest happiness for the greatest number.” For statists, utilitarianism is Utopian, since violence can only benefit a relatively few people. For if everyone taxed everyone else, then there is little chance a “great number” can achieve as much happiness as compared to if only one person taxed.

  134. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 14:26

    Mike T,

    “against the forces of basic human nature that compel us to do what is in our best individual interests”
    >> Huh? Libertarianism represents this basic idea. I’m not even sure what you are getting at here.

    So I am back on the hamster wheel.

    For Libertarianism to work, the elite, who we both agree, WILL make the government their instrument… have to be true to the Libertarian Ideas. That is not gonna happen. They will and always have rigged the government to their benefit. They will make the government as big as it takes to do so.

    Libertarians see granting more and more liberty to all including the elite as the solution to the problem of allocating resources.
    They must deny that the elite will use that liberty to rig the game, because they hold that the common man can impose a libertarian code of behavior on the elite. Or alternately they believe that the code of behavior will be imposed on the elite by the “invisible hand” (something Adam SMith did not believe ) The elite have never let the invisible had tell them what to do.

    Neither of this alternatives is realistic.

    You use Ron Paul as an example of hope, and complain that the only reason his Ideas don’t take hold is the media…the Media that is owned by the elite and in partnership with the establishment/government ?
    So let’s give the elite even more liberty in the media. Let’s let the elite drown out all other voices a la Citizens United ? And the consumer is free to choose what message he consumes ?

    It is a utopian philosophy if it requires a purity of thought that can not be obtained. You will never get the elite to be true to it. They will not be true to the Ideas voluntarily when it is easier for them to rig the game.

    How can they be coerced into it by granting them more liberty ?

    Anyway, thanks for the good discussion. I really appreciated it.

    Your faith in people is stronger than mine. Keep the faith Brother.

    Squeak… Squeak… Squeak …

  135. Gravatar of Doug M Doug M
    17. August 2012 at 14:44

    Point 1: The libertarian revolution will never happen because the entrenched will never cede thier power — I agree with you.

    Point 2: “They must deny that the elite will use that liberty to rig the game.” You are missing the point… Without the regulatory state there is no game to rig. This is THE fundamental point!

    “let the elite drown out all other voices a la Citizens United”
    They already do. And again, missing the point. If the state were significantly smaller than there is a lot less worth fighting over.

  136. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 14:58

    A lot of people are unaware that before Obamacare, California had a law that required that insurance companies could not discriminate on the basis of pre-existing conditions.

    Even if you don’t agree with the aim of the law, you may be interested to know that California was unable to enforce the law.

    What happened was that the insurance companies decided to contest every instance of discrimination on the basis of pre-existing conditions in court. The insurance industry was able to completely overwhelm the States Attorney’s office. The State’s Attorneys could not come close to contesting the insurance industry in the courts, let alone keep doing all their other business.

    In a short while the state had to stop trying to enforce the law.

    California, A state that would be ranked 8th in GDP if it were a nation, was overwhelmed in the courts by the insurance elite.

  137. Gravatar of Bill Ellis Bill Ellis
    17. August 2012 at 15:01

    The point is that the elite will not let you weaken their power to make the state their instrument.

  138. Gravatar of Mike T Mike T
    17. August 2012 at 15:12

    “the elite, who we both agree, WILL make the government their instrument… have to be true to the Libertarian Ideas.”
    >> No. More private individuals need to be convinced of these ideas.

    “That is not gonna happen.”
    >> Agreed. The elite class, by and large, have no incentive or desire for this type of change. It would threaten their power source.

    “Libertarians see granting more and more liberty to all including the elite as the solution to the problem of allocating resources.”
    >> Not for those in the elite class who derive their power from government. Libertarians want to break this collusion of the state and private enterprise.

    “The elite have never let the invisible had tell them what to do.”
    >> Indeed. They fight it every day. It’s why lobbying is such a lucrative business. It’s why 6 of the 10 wealthiest counties in the US are in or around Washington DC.

    “You use Ron Paul as an example of hope, and complain that the only reason his Ideas don’t take hold is the media…the Media that is owned by the elite and in partnership with the establishment/government ?”
    >> Yes, the media, by and large, are part of the problem. They are part of this elite class and are incentivized to reinforce the status quo and protect the state. Also, I’m not suggesting that this is the only reason his ideas didn’t take hold. But it was blatantly obvious they went out of their way to marginalize, distort, and dismiss his message. And I would also contest the claim that the ideas didn “take hold.” His popularity among the electorate grew immensely from his ’08 campaign. It just hasn’t taken hold with a large enough percentage of the population…. as of yet.

    “How can they be coerced into it by granting them more liberty ?”
    >> Ahhh… the million dollar question! As I’ve mentioned above, I concede it’s a monumental task, but a necessary one in my opinion. First, the elite will never be “coerced” into anything. They are not the group that needs convincing. It’s a larger percentage of the population that would have to be persuaded of these ideas. Second, my best guess is that eventually change will come about via local and state governments simply nullifying or refusing to enforce unconstitutional federal laws. There are many examples of this in our history, in fact, mostly from New England states (believe it or not) in the earlier part of US history. There are also some recent examples such as the 25 states refusing to enforce the Real ID Act of ’05, the Virginia state legislature recently passing a resolution refusing to enforce the extrajudicial indefinite detainment provision in last year’s NDAA bill, Utah nullifying federal legal tender laws. Third, the elite media needs to be circumvented to deliver the message. Fortunately, this trend appears to already be gaining momentum as major news networks and political talk radio have seen significant dropoffs in viewers/listeners and the internet is still a vehicle that provides a mechanism for decentralizing and democratizing the flow of ideas.

    “Anyway, thanks for the good discussion. I really appreciated it.”
    >> Right back at ya. Thanks.

  139. Gravatar of Doug M Doug M
    17. August 2012 at 16:06

    Bill Elis,

    You are correct that the Libertarians do require an effective court system to enforce contracts. So, while a Libertarian may not support a regulation to force coverage for pre-existing conditions, they would darn tootin’ want to clamp down on a company if they refused to cover treatment that they had previously agreed to cover.

  140. Gravatar of Scott Sumner Scott Sumner
    17. August 2012 at 17:04

    Brock, I’ve actually been following that story with great interest. But isn’t it Changsha, not Chengdu?

  141. Gravatar of Morgan Warstler Morgan Warstler
    17. August 2012 at 18:03

    To get a handle on why libertarian theory grows stronger with the Internet…. check out Progressive Insurance:

    https://twitter.com/#!/search/progressive%20insurance

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