There are two intellectual positions with which I have serious problems.
The first is the whole idea that markets are efficient; the second is libertarianism as a legitimate school of thought.
First, markets, since some of libertarianism (from what I can gather) is based on the idea that markets should be utterly unfettered (I paraphrase).
Found this interesting:
www.bostonreview.net/BR37.3/ndf_michael_j_sandel_markets_morals.php
It’s a discussion on whether all things should be subject to free markets. What’s the answer?
These are directions that the article doesn’t go. Markets are supposed to be the most efficient way to allocate scarce resources. So, do they always work optimally? Do they always work?
Here’s a scarce resource: admission to elite colleges, like Harvard. Should this not be left to the market to allocate these positions? The highest bidder gets in? If not, why not? If not, isn’t this an admission that free markets may not always be the best means of allocation?
Here’s another: selling organs. There is a case to be made that people should be able to sell a kidney. OK, not sure I agree, but I admit that disallowing this is possibly nanny-state meddling. So, for the sake of argument. let’s say that we should allow the sale of organs.
Now, kidneys are certainly a scarce resource. So, rather than give someone a set fee for their kidney ($100k + medical expenses, let’s say), why not let the donor sell it in an open auction? Like on eBay. Except maybe a site dedicated to organ sales, called, oh, Organs-r-Us?
Is this OK? If the donor can sell it, why not get what s/he can for it? Isn’t that efficient? How is buying a kidney on the market different from selling it for gain? And if you’re going to gain, why not let the market set the price?
If markets are efficient, why would this be wrong? Better yet, how can it be wrong?
Discuss.
I see that you clarified your opening paragraph within the body of the post. As you point out, literally no economist actually believes that free markets are 100% efficient, which is the stuff of troll posts. Even Eugene Fama, credited with developing the “Efficient Market Hypothesis,” doesn’t believe anything even remotely like that caricature and categorizes markets based on degrees of efficiency. Imperfect information, transaction costs and the like are the stuff of Econ 101, and libertarian-leaning economists have done some very interesting and sophisticated work on those issues over the past 100 years. The real issue is whether government can do a better job in practice.
Your Harvard example caught me off guard a little bit. It’s a good topic for discussion, but I think the main thing to keep in mind is that efficiency has more to do with utility and allocation of scarce resources than it has to do with money per se, which is just a means of trade. Also, even in a free market system, admissions is not so much about finding the highest financial bidder as it is attracting and admitting the types of students that will be good for the university’s image and success long-term. The libertarian argument would probably be that individual colleges are better at making those kinds of evaluations based on their own incentives and local knowledge than a government bureaucracy with pet political agendas and bad incentives in place.
The organ issue is interesting and gets a lot of discussion in philosophy classes and on economics programs. It’s been discussed on EconTalk a number of times. I found this link from the first year of the podcast:
www.econtalk.org/archives/2006/06/the_economics_o_4.html but I know it’s come up other times as well, possibly in one of the Mike Munger or Don Boudreaux podcasts. I think organs should be purchasable for a variety of libertarian reasons, but usually I don’t like the topic because I think it’s more of a distraction from pressing reality than anything. Good intellectual exercise, but so many grossly anti-free market government actions are doing terrible damage to the economy every day, like the 38 Studios Loan in RI for example, that organs are toward the bottom of the priorities list for me.
“no economist actually believes that free markets are 100% efficient, which is the stuff of troll posts”
No economists believe that existing markets are actually free, but mainstream economists very much do use models that assume that free markets are perfectly efficient, and the policy recommendations that such economists make rely absolutely on these models.
This is why the mainstream economic belief is that deregulation increases efficiency. This is why dregulation of financial services happened, why mainstream economists such as Alan Greenspan supported deregulation, and why a mainstream economist like Milton Friedman argued that all industries should be massively deregulated, even to the point where physiicians should not be certified by the government.
Your problem is that you confuse outcasts from the economic mainstream, like the Austrian School economists, to be part of the mainstream. They are not.
But even so, in practical terms, you arrive at precisely the same point as the one marked by economists who assume perfect efficiency in their models: there is no difference between the policies you advocate. What an assumption of perfect efficiency recommends, you also recommend.
“So, do they always work optimally? Do they always work?”
No and no. But I don’t think those are the right questions to be asking. The question I’d ask is if government could allocate resources more efficiently. That in itself is an almost impossible question to answer. What is the most optimal allocation, and who gets to decide the optimal amount if not the millions of people and transactions that make up a market? That’s far more complicated than a blog post or comment could delve into.
“Should [admission to Harvard] not be left to the market to allocate these positions?”
I don’t see how you could argue the opposite, that gov’t should decide who goes to Harvard. What does the gov’t know about what kind of school the Harvard board wants to operate, and what types of students they want to accept to further that end?
“There is a case to be made that people should be able to sell a kidney.”
Absolutely. If you believe you have a right to your body, then as I have the right to donate my kidney to someone, I should have the right to sell it as well. There is also the argument that the current system of waiting for donations or death is very sub-optimal given the demand for healthy organs, and by allowing a market to fill that need, more people would be better served.
Because we’re dealing with people who are flawed and can act irrationally, neither a market economy nor a centrally-panned economy can ever be perfect, but the vast majority of us libertarians feel that economic planning by the many is superior to economic planning by the few in the vast majority of circumstances.
“The question I’d ask is if government could allocate resources more efficiently.”
No, that’s the question you’d answer with a ‘no’. Why play coy?
You would answer, in every case, that markets do a better job at allocating resources than governments do, which is precisely the answer that someone who believes markets are perfectly efficient would give.
Which means that there is no functional difference between whatever you claim to believe and the belief that markets are perfectly efficient.
“No, that’s the question you’d answer with a ‘no’.”
That’s not true. Since I noted people aren’t perfect, and therefore neither are markets, there may be instances where a central authority could allocate resources in a more efficient manner. Think “Tragedy of the Commons” as the type of circumstance where that may apply. Commercial fishing comes to mind as a situation in which overfishing is not long-term optimal on a number of levels, but it’s the current incentive for fishermen.
“which is precisely the answer that someone who believes markets are perfectly efficient would give.”
That’s not true either. To believe, on the balance, gov’t is less efficient than markets is not to believe that markets are perfect, but only to believe they are better, even if only marginally.
“To believe, on the balance, gov’t is less efficient than markets is not to believe that markets are perfect”
I didn’t say that’s what you believe. I said that it doesn’t matter that you believe something different from the idea that markets are perfect, because you’ll still make the same choices as someone who believes that markets are perfect.
“there may be instances where a central authority could allocate resources in a more efficient manner”
You’ve just been voted off the seastead.
“Think “Tragedy of the Commons” as the type of circumstance where that may apply. Commercial fishing…”
I’m not sure what you mean here. The Tragedy of the Commons is an argument for privatization, i.e. markets.
en.wikipedia.org/wiki/Tragedy_of_the_commons
“Articulating solutions to the tragedy of the commons is one of the main problems of political philosophy. In absence of enlightened self-interest some form of authority or federation is needed to solve the collective action problem. In a typical example, governmental regulations can limit the amount of a common good available for use by any individual. Similarly, limits to pollution are examples of governmental intervention on behalf of the commons.”
Oh, wait, I forgot – linking to Wikipedia means I’m stupid and dumb and a idiot. Only someone who is stupid and dumb and a idiot would link to Wikipedia.
Jgardner – He’s just trolling you, man.
From your link, two paragraphs later:
“Libertarians and classical liberals often cite the tragedy of the commons as an example of what happens when Lockean property rights to homestead resources are prohibited by a government.[33][34][35] These people argue that the solution to the tragedy of the commons is to allow individuals to take over the property rights of a resource, that is, privatizing it.[36] In 1940 Ludwig von Mises wrote concerning the problem:
From your link, two paragraphs later:
“Libertarians and classical liberals often cite the tragedy of the commons as an example of what happens when Lockean property rights to homestead resources are prohibited by a government.[33][34][35] These people argue that the solution to the tragedy of the commons is to allow individuals to take over the property rights of a resource, that is, privatizing it.[36] In 1940 Ludwig von Mises wrote concerning the problem:
Yes, we understand this. Jgardner said that tragedy of the commons scenarios can justify government involvement in some situations, which I also agree with. You then expressed puzzlement with his explanation and stated, “The Tragedy of the Commons is an argument for privatization, i.e. markets.” This is not true, as my quote indicates – tragedy of the commons situations can be resolved in a number of different ways, including through increased government regulation. Our acknowledgement of this fact proves that we aren’t the anarchist extremists you always try to paint us as when you’re trolling up this site every day.
“Our acknowledgement of this fact proves that we aren’t the anarchist extremists”
It proves that you are not libertarians, according to the link you provided.
When a person claiming to be a libertarian says that the tragedy of the commons is resolvable through governments, then provides a link to an article that claims libertarians believe the tragedy of the commons is best resolved through markets, you have to wonder if that person claiming to be a libertarian is at all aware of either himself or libertarianism.
Are you actually some kind of agent provocateur?
Okay, you win. We’re not real libertarians.
Of what significance would that be? Absolutely none. Just another thread derailed by your personal invective and irrelevancies. This is why you are a troll who should be banned for the good of the site. You do the same thing in every thread you post in. But you’re a “progressive” troll so it’s okay.
“Of what significance would that be?”
The article is about libertarianism. You and jgardner claim to be libertarians, you claim to represent libertarianism, then proceed to endorse positions in contradiction to libertarian orthodoxy.
You defend libertarianism by taking a stand against it.
What is anyone supposed to make of that?
You raise the same stupid, irrelevant points in every thread you post in: “there is no such thing as a 100% free market”, “libertarians are all hypocrites because they use the roads (or think governmnet is sometimes justified),” Adam Smith was for protectionism, etc.
You’re not interested in a real discussion. You’re just trying to derail threads by creating endless arguments with all free marketers who post on this site. That’s trolling.
@RTW
take your own advise and stop feeding the troll.
You’re right. It’s not worth it. I’m just going to ignore him from now on.
“You’re just trying to derail threads by creating endless arguments with all free marketers ”
No one can derail a thread on libertarianism by discussing libertarianism.
You made a claim about the tragedy of the commons that is in direct contradiction with libertarian orthodoxy. You posted a link to an article that detailed the orthodox libertarian view of the tragedy of the commons. The article even included a long quote from von Mises to the effect that the tragedy of the commons is best solved through privatization.
You claim to be libertarian. You claim to subscribe to the Austrian school of economics. You post a link to a classic example of libertarian and Austrian school thought.
And yet you are saying that the orthodox libertarian position on the tragedy of the commons is not only wrong, but extremist. You are saying that it is a caricature to attribute the orthodox libertarian position on the tragedy of the commons to libertarians.
In short, you have done a pretty good job of undermining orthodox libertarianism and the Austrian School of economics.
Again, I have to consider the possibility that you’re a progressive trying to make libertarians look bad or that you’re doing some kind of performance art.
Is that the case? What are you even doing?
Another classic turbo stalking. Your president claims to be progressive but he bails out the auto industry, gives tax breaks to the rich, attends a fundraiser sponsored by the country’s largest private equity firm, and supports the firings of the Central Falls teachers. Is he not a progressive?
“Another classic turbo stalking. Your president claims to be progressive”
He does? What are you talking about?
“Is he not a progressive?”
No, he’s not.
???
btw, he definitely has claimed to be a progressive…
“Obama Addresses Critics on ‘Centrist’ Moves”
2008!
Clearly he is not except in the loosest sense of the word (he certainly speaks at times with progressive framing and is generally supportive of progressive social issues). You might also include his unconscionable extension of the Bush era civil liberties abuses such as domestic spying, detention without trial, torture, and assassinations.
btw I thought turbo made some legitimate points on this one.
Obama is certainly not a progressive, although he borrows the rhetoric to pander to progressives from time to time so they’ll line up behind him in elections. I think of him as a left-leaning moderate politician who participates in all the “necessary evil” events and corporate fundraisers to stay in power, which he justifies as for the greater good.
When viewed in isolation, turbo’s posts in this thread aren’t blatant trolling, but when viewed in the context of his history here, it’s obvious that he’s just using the vaguely related subject matter as an excuse to do what he always does and trainwreck threads with “nuh uh” “uh huh” back-and-forth arguments.
One thing to note is that libertarianism is not synonymous with right-wing, anti-regulatory, free market beliefs. Only in the U.S. has the term been used as if there are no choices except big government and unregulated corporatism.
[quote]
Chomsky: The term libertarian as used in the US means something quite different from what it meant historically and still means in the rest of the world. Historically, the libertarian movement has been the anti-statist wing of the socialist movement. Socialist anarchism was libertarian socialism.
In the US, which is a society much more dominated by business, the term has a different meaning. It means eliminating or reducing state controls, mainly controls over private tyrannies. Libertarians in the US don’t say let’s get rid of corporations. It is a sort of ultra-rightism.
Having said that, frankly, I agree with them on a lot of things.
[end quote]
Is libertarianism as a legitimate school of thought? Absolutely, you’ve just been reading the wrong libertarians.
“Only in the U.S. has the term been used as if there are no choices except big government and unregulated corporatism”
Sure.
But Rhode Island is one of the United States. There’s really no confusion about the meaning of the word ‘libertarian’ in the contemporary American context.
Well, maybe there’s some confusion among the libertarians themselves….
No confusion, perhaps, but accept the debate in their frame and we lose. btw I call myself a libertarian, just not one who’s enamored with unfettered corporatism.
What debate?
There’s not really a debate about libertarian ideas coming from the self-styled libertarians here. There’s just this odd notion that, whenever someone on RI Future brings up libertarianism, what’s really being discussed is whatever pocket definition of libertarianism the few libertarian commenters here have decided to adhere to on that particular day.
Maybe it has something to do with the intense parochialism of Rhode Islanders. ‘It’s all about my libertarianism!’
At any rate, sure, you can call yourself libertarian, but let’s note that you’re doing so with qualifications, precisely because you understand what the word ‘libertarian’ usually signifies–which is a rare understanding around here, I guess.
Yes, more a comment for Oswald on the framing of the diary… that somehow by recognizing the limits of unregulated markets we progressives are against freedom, liberty, and voluntary association. Not his point (nor true), but that’s the reenforced message of the frame.
I hear you.
“There’s not really a debate about libertarian ideas coming from the self-styled libertarians here.”
There’s not really a debate with you about libertarian ideas. Maybe that wouldn’t be the case if you showed a willingness/desire to debate honestly instead of trying to drag people into the weeds at every opportunity. Some of the most commented on posts on this site are wars of attrition between you and other commenters — see www.rifuture.org//equal-pay-for-equal-work-still-illusive.html and www.rifuture.org//stokes-schilling-take-hits-but-carcieri-deserves-blame.html for some of your finest work.
And just for the record, libertarians are not a monolithic group. One can be a libertarian while still believing there is a role for gov’t in society. They are not mutually exclusive. But I’m sure this is not news to you, it’s just another instance of your disingenuous BS.
“libertarians are not a monolithic group”
So? Libertarianism is also an extreme position that is pretty well defined.
Look, I asked you a straightforward question about your position on the tragedy of the commons.
RTW answered for you, saying, not only was it normal for libertarians to suggest solving the problem through government, but that it is a caricature to say that libertarians think the tragedy of the commons is best solved through privatization.
He then posted a link to an article with the following lines: ““Libertarians and classical liberals often cite the tragedy of the commons as an example of what happens when Lockean property rights to homestead resources are prohibited by a government.[33][34][35] These people argue that the solution to the tragedy of the commons is to allow individuals to take over the property rights of a resource, that is, privatizing it”
Then you both called me a troll.
Honestly, I really don’t know what to make of you people.
“trying to drag people into the weeds”
There’s nothing but weeds.
I have fundamental disagreements with you. Such disagreements are not easily resolved. Basically, just about everything you say is wrong. Plus, you shift positions a lot, you misuse terms, and you present your own idiosyncratic views as if they represent the mainstream of the school of thought you adhere to.
You have literally linked to the von Mises institute as a shorthand explanation of your economic position, and here you are explicitly rejecting what is a standard litmus of libertarianism–the privatization of common property resources.
That’s odd, especially when you feel free to say things like ‘the vast majority of us libertarians’ and when RTW refers to libertarians who favor the privatization of the commons as ‘extremist anarchists’.
You are both claiming to be libertarians and also saying things that are not merely unusual, but actual anathema to libertarianism, while claiming to speak for libertarianism.
“Some of the most commented on posts on this site are wars of attrition between you and other commenters”
Oh the drama! Wars? Get real. They’re just comment threads, and they’re not all that long. The internet is not going to run out of space any time soon.
The problem with you and RTW is that you think RI Future is your own little playground, a place where you can go and spit in the face of progressives in your spare time. Both of you constantly sneer at the people who post and comment here, pile snide remark on caustic remark, and generally louse up the joint with derision. Then you cry troll when someone calls out your ideology for the economic creationism it is.
I mean do you really think no one ever noticed that two of the most regular commenters here are market fundamentalists who deride every single post that has to do with economics?
Let me clue you in: nobody owes you any deference. Everything you say here is fair game for question in a tone that’s just as civil as your sneering, jeering, sarcastic one. Get over yourself.
“Unregulated corporatism”? Corporatism, as it has used in the political context for the past 100 years, is the antithesis of libertarianism. It is collectivist and statist by definition, and is most frequently associated with fascism. Libertarianism has nothing to do with legal personhood or corporate structure or any of the other benefits bestowed upon corporations by U.S. law.
In regards to libertarianism being a legitimate school of thought, I think of it this way:
It’s exactly as valid as Communism (despite being on opposite sides of the spectrum) in that they both sound great on paper and fail miserably in the real world.
Do you think that is because of a flaw in the ideology, human nature, both, or something else entirely?
Perhaps both, but in my mind it’s mostly the ideology. It emphasizes classical schools of thought to the detriment of social science. It’s outdated.
“to the detriment of social science”
Could you elaborate?
There’s no mechanism in libertarianism that recognizes social science. It starts off with the assumption that all people have equal opportunity and equal access. The result will always be plutocracy.
I won’t say that social science has no value, but a lot of it isn’t really science at all and shouldn’t be presented as such. A pitifully low number of social science studies have any reproducibility. It should be considered a non-empirical branch of philosophy or something similar. It is really nothing like physics or chemistry or the hard sciences.
If each individual is supreme and unique (which is the basis of libertarianism), and their individual circumstances are unique, then I don’t see how equal opportunity or equal access could possibly be guaranteed. Perhaps I’d need to see that assumption in context? It’s not an assumption I’ve ever seen voiced, but perhaps I diverge from traditional libertarian thought in that regard, I don’t know.
I see the assumption as being inherent to the idea that all people are “supreme.” Who qualifies that? 15% of the world’s population can’t even feed themselves, and many more are hardly or not at all in control of their own fates. What do they have supremacy over?
I simply fail to see any reliable agent for social change in libertarianism. A degree of governmental (public or private) paternalism will always be necessary, and in that case where do you draw the line?
“What do they have supremacy over?”
I’m assuming you’re familiar with natural rights? Everyone has a natural right to life, liberty and property. Whether a gov’t exists to suppress those rights doesn’t invalidate them.
“A degree of governmental [...] paternalism will always be necessary, and in that case where do you draw the line?”
That’s the constant struggle for all ideologies, is it not? That isn’t settled in libertarianism either, different schools of thought hold the State in various levels of responsibility. Personally, I fall under the minarchist category.
Anarcho-syndicalism doesn’t recognize social science? I take it you’re also talking only of anarcho-capitalism and ignoring libertarian socialism?
I am most definitely ignoring libertarian socialism and anarcho-anything. Such movement are generally in favor of abolishing private property, am I right? I find these movements are closer to Marxism than libertarianism.
Yes, generally supportive of abolishing private property in the means of production (a bit different than saying no private property). And, yes, some Marxists have views that are quite similar.
My point is only that the left has a long history of libertarianism. Only in the U.S. and only recently has the term been exclusively used to describe right-wing free-market capitalists.
I’d say that’s a fair point. I can’t say I’m very interested in the left/right dichotomy though.
“ I find these movements are closer to Marxism than libertarianism.”
It may be worth noting that Communists and Anarchists went through a major split on precisely the question of human nature.