The Great Persuasion: Reinventing Free Markets since the Depression

So what do you think of Arctic Sea ice this year?

Extent maximum seems to be a record low, again.

Volume as estimated by PIOMAS is really low.

Weather has been warm, for the Arctic.

What do you think the odds of an ice free Arctic Ocean is, this summer?

Keynes was for "planning and regulation"? Have you actually read Keynes? I don't recall any mention of regulation beyond that basic role of government in setting out the laws under which markets must operate, and enforcing them. And as to planning - I don't believe there was any particular role for "planning" by the government outside of adjusting overall spending to help avoid the depressions markets can run into on their own. The Hayek folks are just as much advocates of "planning" in that sense, trying to tell governments they should (always?) spend less. Keynes was an economist after all and believed markets worked just like every other economist.

[No, I haven't read Keynes. I am - or I think I am, I can check - merely parroting the book on that point. I'm not sure that wiki (https://en.wikipedia.org/wiki/John_Maynard_Keynes) supports your point. Essentially everyone agrees that two ends of the spectrum - no government (anarchy; wild-eyed libertarianism) and central planning / control of everything - are invalid. So everyone is somewhere in between. So your "no role for planning except..." is the point -W]

I just checked my kindle copy of Keynes' "General Theory" (very easy to read by the way, clearly argued, and amusing in places). The word "regulation" appears 3 times and "regulate" once; one of these in the title of a reference, and another quoting somebody else (who was arguing against regulations to promote saving as they are harmful to the economy). In no case is he advocating for more of them. "Plan" and "planning" each appear exactly once, neither of which refers to governments.

More to the point, if you really believe there is a continuum from anarchy to Marxism with Keynes in the middle you are very confused. Keynes produced a theory of nonequilibrium economics that emphasized the role any government or other large institution can have, no matter the overall organization of the economy. Governments exist; if they want to use their power for good his economic theory indicates a path that can be followed.

[That would, I think, be a clear difference from the present day MPS or Friedman; and I think from Hayek too. The idea that govts exist is obvious; that they have power, lying around, that can be directed is less so; the idea of MPS was for govts to have less power; if Keynes is advocating increased govt intervention then he is on "the other side" -W]

But he was also a fierce advocate for markets - he refers to and quotes Adam Smith seven times in the book (along with references to many other economists like Ricardo and Say) - competition is what makes everything work - and only criticizes his predecessors on the point of making a virtue of frugality when the world really doesn't work that way.

For a very decent discussion of Keynes, socialization, socialism, and central planning I recommend Daniel Kuehn's blog post Keynes and the "Socialization of Investment".

[If you, like him, believe the last assertion there - that the role of govt is to "do those things which at present are not done at all" then you believe govt should withdraw from education and healthcare. That would make you quite radical.

Keynes' the trend of joint stock institutions... to socialise itself.... the owners of the capital, i.e. its shareholders, are almost entirely dissociated from the management, with the result that the direct personal interest of the latter in the making of great profit becomes quite secondary doesn't quite read now the way he might have intended it then. Nowadays, this is a well known problem that most large companies try to solve; but even then, in celebrating this, Keynes distinguishes himself from the MPS folk -W]

Phil #1 - Are you sure you're on the right thread?

1) Interesting

2,3,4) Yes

5) I wouldn't bet on it! Perhaps William or Crandles would though?

> “the idea that the Left had abandoned debate on economic efficiency, and instead switched their focus to values.”

That is a nonsensical statement. Convenient nonsense if you wanted to believe that the Left is nothing but a bunch of non-logical believers, that is.

Firstly, the “Left” and the “Right” are defined by their values, not their economics (directly). So the Left can’t “abandon economic efficiency for values”, and, conversely, the Right can’t abandon values for economic efficiency, as they are both defined by their values.

Furthermore, there is always a value judgment in how you deem things to be economically efficient or not (or more efficient than another). Sure, GDP may be a value-less metric but using GDP to examine economic efficiency is a value-laden choice.

Maybe one could say that the Left abandoned a pure numerical approach to economics by, instead, focusing on (the more value-laden) societal impact of economic policies. But that doesn’t quite have the same demeaning ring to it, does it.

#5. I like to hear Dr Connolley's opinions on sea ice and climate.

I can tolerate bad bee keeping and rowing.

WMC responds "if Keynes is advocating increased govt intervention then he is on “the other side”".

I think one of the issues here is that people think far too often in terms of "sides". What actually are the facts of the matter? I believe that was Keynes' goal - and again he was not for increased government for its own sake (or in any unlimited sense), but as a means to preserve liberty and markets. Let me quote from a section in the "General Theory" (near the end) where he does discuss individual liberty vs "enlargement" of the government:

"Let us stop for a moment to remind ourselves what these advantages [of individualism] are. They are partly advantages of efficiency - the advantages of decentralization and of the play of self-interest. The advantage to efficiency of the decentralization of decisions and of individual responsibility is even greater, perhaps, than the nineteenth century supposed; and the reaction against the appeal to self-interest may have gone too far. But, above all, individualism, if it can be purged of its defects and its abuses, is the best safeguard of personal liberty in the sense that, compared with any other system, it greatly widens the field for the exercise of personal choice. It is also the best safeguard of the variety of life, which emerges precisely from this extended field of personal choice, and the loss of which is the greatest of all the losses of the homogeneous or totalitarian state. For this variety preserves the traditions which embody the most secure and successful choices of former generations; it colors the present with the diversification of its fancy; and, being the handmaid of experiment as well as of tradition and of fancy, it is the most powerful instrument to better the future.

"Whilst, therefore, the enlargement of the functions of government, involved in the task of adjusting to one another the propensity to consume and the inducement to invest, would seem to a nineteenth-century publicist or to a contemporary American financier to be a terrific encroachment on individualism, I defend it, on the contrary, both as the only practicable means of avoiding the destruction of existing economic forms in their entirety and as the condition of the successful functioning of individual initiative.

"For if effective demand is deficient, not only is the public scandal of wasted resources intolerable, but the individual enterpriser who seeks to bring these resources into action is operating with the odds loaded against him. The game of hazard which he plays is furnished with many zeros, so that the players as a whole will lose if they have the energy and hope to deal all the cards. Hitherto the increment of the world's wealth has fallen short of the aggregate of positive individual savings; and the difference has been made up by the losses of those whose courage and initiative have not been supplemented by exceptional skill or unusual good fortune. But if effective demand is adequate, average skill and average good fortune will be enough.

"The authoritarian state systems of today [1935] seem to solve the problem of unemployment at the expense of efficiency and of freedom. It is certain that the world will not much longer tolerate the unemployment which, apart from brief intervals of excitement, is associated and in my opinion, inevitably associated with present-day capitalistic individualism. But it may be possible by a right analysis of the problem to cure the disease whilst preserving efficiency and freedom."

[There are two aspects to that. The first is, those are only arguments for intervention if the economics behind them happen to be correct. The Austrian folk would (indeed did) argue that they are incorrect; and therefore the encroachment on liberty doesn't even have a justification. The second (linked to this in a way) is that you're never going to know; people will always justify their encroachment on the idea that it is "all for the best"; and so there is no way to resist other than en bloc -W]

WC writes:"The Austrian folk would (indeed did) argue that they are incorrect..."

Yes, but they were wrong. So that's not much of a criticism. In effect the Austrians have argued for the American Vietnam War policy and Hue: We had to destroy the city in order to save it.

80 years later some of these questions have been resolved. What's of notable interest, yet is being completely ignored, is that central planning appears to work very well. Ask McDonalds or Wal-Mart or most any Fortune 500 company.

[{{cn}} -W]

Kevin O'Neill writes "is that central planning appears to work very well."

It works when it works. A Fortune 500 company gets that way by *good* central planning. A vastly greater number of companies, and essentially all governments, fail at central planning.

In business, the good central planners are self-selected by success at smaller ventures. They are not elected or appointed. It is "Darwinian". But governments tend to be afflicted by cronyism, nepotism, and some other isms.

> " In business, the good central planners are self-selected by success at smaller ventures. They are not elected or appointed.” (your bolding)

In business, shareholders elect a board of directors. Board of directors appoint the CEO.

> “But governments tend to be afflicted by cronyism, nepotism, and some other isms.”

And a board of directors in big companies aren’t?

In reply to rconnor: "And a board of directors in big companies aren’t?"

Yes. Cronyism and nepotism, while not inherently or automatically predictors of failure, are also on average not predictors of success. Thus a company riddled with cronyism is unlikely to be "big".

"In business, shareholders elect a board of directors. Board of directors appoint the CEO."

That is true of publicly traded companies. However, I think you misrepresent the democracy of "shareholders". If there's a majority shareholder (frequently the case) then his or her vote is really the only one that counts. In such case, the success of the business ultimately is the responsibility of that single person at the top, the *owner*. If that person chooses a CEO carefully and correctly, the CEO then becomes the operational decision maker and the company can become "big".

If no single shareholder can dominate, then a cabal is likely, but cabals always (IMO) have a leader.

Should it happen that the CEO not be effective, it may take a long time to replace that CEO, by which time the company (or government or country) is no longer "big".

Should it happen that the CEO is unexpectedly effective but the owners are not (that is to say, it was more accidental that the CEO was effective), it is likely that the CEO will be replaced by someone more to the liking of the owners.

I appreciate the nuances you bring, but it is still the case that Darwinism cannot be escaped. Suppose a failing company becomes a parasite on its host nation (rather common in the United States, I think). At some point the host nation is weakened to the point it is no longer "big" itself, and it, and the parasitical companies, are overtaken by the competition, China probably.

Democracy in the United States is not always one-person-one-vote. Furthermore, wealthy patrons ensure that only certain candidates ever reach the ballot in the first place.

The Soviet Union probably had few, if any, options besides the one they chose. When citizens do not have education sufficient to make any kind of wise democratic choice then central management is almost assured to be no less bad than citizen control, and could be pretty good.

In the United States quite a lot of central control exists; not always direct coercive control as in state owned industry, but manipulated through tax and subsidy.

For an intro -- Organisation & Management And Business Communication, p38, Traditional Approaches to Planning.

Google is your friend

M2:

I appreciate the nuances you bring, but it is still the case that Darwinism cannot be escaped.

Darwinism my ass. If I pulled Charles Darwin out from behind the marquee, he'd say you know nothing of his work. You are making a fallacious appeal to Nature, drawing on a false view of Nature. Even you can do better.

[I disagree. There is a key element of Darwinism - selection through competition. Companies can die. Companies that get too bureaucratic will die. Companies that make very bad choicees may not die, but to survive they need to re-invent themselves (e.g. IBM). Governments have a much harder time dying - look at Venezuela or Zimbabwe. Even appallingly incompetent governments that beggar their own people can survive, for lack of competition -W]

Please, William?

[That confused me but I think you meant "please close my blockquote"; done -W]

WMC says "those are only arguments for intervention if the economics behind them happen to be correct. The Austrian folk would (indeed did) argue that they are incorrect;"

Exactly - the issue here is a matter of fact, not really of opinion or sides. Can government spending boost aggregate demand and therefore the economy? There sure is a lot of evidence that it does - under the right conditions such as high unemployment (for reference I would suggest you read Krugman but perhaps that's too partisan for you?) And conversely, government contraction at the same time that private demand is slumping naturally leads to a depressed economy. Government certainly can contract when the private economy booms, I don't think Keynes ever argued against that (in fact that was really the other side of his argument, and he advocated for generally balanced government spending over the long term, making it counter-cyclical to dampen out boom-bust).

Keynesianism in a sense is built in to much of what governments do since the 1930s: unemployment insurance and welfare programs automatically boost government spending when people are out of work, and cut back automatically when jobs become available again. The fact that we haven't had a repeat of the great depression or the previous business cycle busts of the 1800s (at least in most countries) suggests something about the economic world has improved.

The only argument I've heard that Keynes was completely wrong (and the "Austrians" are right) is based on the stagflation of the 1970s - this wiki article seems to do a good job describing what happened - https://en.wikipedia.org/wiki/Stagflation - there was an awful lot going on with Nixon's price controls and the oil price shocks. I think the main point here is Keynes approach describes the short run effects, while things tend to return to an equilibrium in the longer run (but in the long run we are all dead, as Keynes also famously said).

Just as in physics the dynamics of a system can be quite different from what you observe when short-term motion has ceased and things have returned to equilibrium. Or as in climate where there are many time-scales involved in forcings and feedbacks, and the long-run equilibrium response can be hard to figure out.

Kevin and Mal; "survival of the fittest" is inescapable. This discussion is nominally about what exactly *is* fittest.

Central management is not by itself fittest, but neither does it preclude fitness.

Wise, knowledgeable and forceful central management is probably best. I doubt the combination of all three has ever existed for any length of time. Singapore comes pretty close to that ideal in modern times.

Mal Adapted asserts "If I pulled Charles Darwin out from behind the marquee, he’d say you know nothing of his work."

He would say congratulations on understanding the essential element of natural selection.

"He came to see that species were not fixed over time, but rather they adapted to their changing environment from one generation to the next"
[https]://www.aboutdarwin.com/darwin/WhoWas.html

As you say, Google is my friend.

Its application to economics and business is that you don't need to guess or predict; you can simply observe economic systems in their natural habitat and from that glean the operations of economics.

It is when you want to tinker with it, or make an entirely new system of economics, that you get into guesses on how to manipulate society and sometimes guess correctly.

Of course, naturally evolving systems can and do evolve themselves to extinction, or into highly unstable dynamics. They will also miss areas of parameter space in which the barriers to entry are too high - the absence of a wheeled creature being easiest, the Rubisco enzyme complex more interesting.

So the analogy to evolution would suggest that adding a bit of central planning to markets would lead to a better overall system, with the focus always being on those areas that are sufficiently well constrained that the 'wisdom of crowds' gives a worse answer than a few experts.

[No; you have missed the point. We don't want very long lived badly working things. Evolution requires competition to work. The market provides competition between companies. The structure of international relations prevents competition between countries. It would be possible for it to be otherwise: Greece could solve its debt problems by allowing Germany to buy some of its islands. that would, IMO, be a good solution: badly run countries would gradually get taken over by well run ones. But nationalism prevents this. It was not always so: recall that the USAnians bought large chunks of their country -W]

And we also need effective government, regardless of size.

[We definitely need good government. You only have to look at those place that lack it (Somalia, Venezuela, Afghanistan, Zimbabwe, etc.) to see this. However slipping in the word "effective", and attempting to dismiss the issue of size, is contentious. To quote AS: Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things. -W]

I get the impression that you want the 'nice' bits of evolution without the problems. Which is nice and idealistic but a little naive. You have a system of competition and change and it can and will take off in undesirable directions.

[It will take off in difficult-to-predict directions. Unless you have solid reasons, you can't simply assert those will be undesirable -W]

Unless you define this kind of process as intrinsically moral and good, in which cases negative consequences are by definition impossible, Which is the same kind of logic that has critics of communism confined to psychiatric institutions.. 'The system is perfect, critics must be insane/stupid'.

[I've already noted the problems with morality. You could try reading that -W]

Not sure why you brought up Greece, but the answer there is (and has been for the past 14 years) either don't be in a currency union with Germany (and the EZ) or have a full political union with Germany. Selling off bits of Greece would not improve matters.

[I disagree. Greece's immeadiate problem is lack of money (caused by badly managing their economy and partly lying to the EC about being suitable joining the Euro). They want more German money. The Germans don't want to give it to them. But the Krauts would probably be happy to buy up some islands; then they'd actually get something for their money, of which they have a surplus.

Why do you think that wouldn't improve matters? -W]

And for government size.. once we have good general governance - which means regular democratic changes of government,

[Actually no. You're confusing the ends with the means. Regular changes of democratic government are merely a means to the end, good governance -W]

low levels of corruption, transparency and so on, as far as I am aware there is no correlation between government size and economic growth, or even metrics like small business formation. But we do see people being happier in the 'big government' countries.

[I'm dubious about that. Apart from anything else, all Western governments are big, so how would you distinguish? -W]

AS's quote seems a bit utopian as well. If the natural course of things results in monopolies , or rents that consume all surplus production, or companies that cannot invest without risk of takeover, then opulence will not be the result.

> “badly run countries would gradually get taken over by well run ones. But nationalism prevents this.”

WC, your British imperialism is showing…

Your big on individual freedom, right? So how would you feel if you lived in a country with laws you agreed with and provided you with individual freedom but, because that countries economy wasn’t doing so hot, was bought out by a country that was less big on freedom?

[I think that would be just tough. But notice it isn't what I was suggesting: I was suggesting selling of (small) parts of a country. So you could move -W]

(For example,) Britian ain't doing so hot since Brexit, I hear UAE has plenty of cash sitting around...

[You haven't understood. The UK isn't short of money. Our debt is easily financeable - just look at the interest rates we need to offer -W]

> “recall that the USAnians bought large chunks of their country”

Like treaties with indigenous people?

[Err, no. I was thinking of the Louisiana purchase, you may have heard of it... -W]

Come ask indigenous people of North America how swell that went. Y’know with the genocide (physical and cultural), forced relocations and destruction of any sense of self determination of indigenous people and all. Come look at the systemic issues that causes today.

Above when you paraphrased Kristol by saying that the left switched their focus to values, maybe it’s because when you ignore values, you come up with ideas like this.

[Again, you have failed to understand. No-one is suggesting ignoring values -W]

Does free market health care work for all?

https://en.wikipedia.org/wiki/Free-market_healthcare

Discuss. (this is something being sold today, as I speak, over here)

If we all weren't bogged down by over-regulation would we all have GDP growth rates of China, India and Ethiopia.

https://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_growth_rate

Discuss.

Does talking about 18th, 19th and 20th century ideologies/economic theories really work in the 21th century where population growth is expected to exceed eleventeen billion people?

https://en.wikipedia.org/wiki/Projections_of_population_growth

Discuss.

Is free trade fair?

[Yes -W]

https://en.wikipedia.org/wiki/Donald_Trumpkin

[Why the non-sequitur? -W]

Discuss.

Is free trade fair?
> [Yes -W]

Anatole France: "In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread."

This speaks to our notion of fairness. Upthread you say that "No-one is suggesting ignoring values " and then you go on to trumpet a phrase that *completely* ignores values. It's an assertion with no basis in fact. In virtually every case free trade is unfair to some party because of pre-existing conditions beyond their control.

It is probably impossible to find a situation where 'free trade' or 'fair trade' actually exists. We could artificially create one, but finding one that has arisen through natural events is unlikely.

[It seems like a fine idea to aim for. So getting governments to stop being roadblocks in the way would be an excellent start -W]

> “I think that would be just tough. But notice it isn’t what I was suggesting: I was suggesting selling of (small) parts of a country. So you could move –W”

You know that country that you were born in, that you have roots in, that you feel defines you. Well, you no longer live in that country. But hey, you can just pack up and move! You can’t afford to you say? Well, tough. Nationality is on the free market boys!

[Err, no. I wasn't suggesting you would have to change country. Perhaps only place in country. But perhaps you wouldn't want to. If I were a Greek I'd rather have the Germans running the country -W]

In many places, due to the geographical remoteness, the islands have a very unique culture and history that they feel differs from the rest of the country. I don’t have experience with Greek culture but I know Sicilians, for example, describe themselves as Sicilian, not Italian – there is a very important difference to them. It’s like telling a Scot, “Well, Scotland was bought by France, but not to worry, you can just move to England – you’re still British! What’s the problem?”.

[Fine. Then you've decided that Sicilians being run from Rome is bad -W]

Beyond all that, it’s incredible how cavalier you are with people’s identity, citizenship, government and rule-of-law being bought by another country. It’s not about nationalism, it’s about identity. I can’t believe I have to defend the value of personal identity and self determination against a libertarian…

> “Err, no. I was thinking of the Louisiana purchase, you may have heard of it… -W”

I have. But that’s a less relevant example than mine, which you ignored.

The Louisiana purchase involved a remote territory of France, not a part of the host country, and was purchased by a country with closer geographical, historical and cultural ties – they were both settlers of “the new world”. So the inhabitants that switched from being French to American likely felt more of a cultural and historical connection to other Americans than France. This is especially true given the difficulty for communication between the Louisiana and France in the 18th century.

In my example, which you ignored, the land acquired was part of the host country and had very deep historical and cultural connections to the people. Actually, even more than we sometimes appreciate given the cultural and religious beliefs of indigenous people.

Equally, I would think that any inhabitants of unnamed Greek Island would have an issue with becoming a part of Germany. They share an identity, developed through history and culture, that is Greek (or unique to the unnamed island), not German.

> “You haven’t understood. The UK isn’t short of money.”

It was hypothetical. It’s an exercise to help you sympathize with why Greeks might not want Germany to buy their citizenship.

[Again, you're repeating the same errors. I'm not suggesting they change citizenship, except optionally -W]

> “Again, you have failed to understand. No-one is suggesting ignoring values –W”

But you are ignoring values by ignoring the any value of cultural and national identity and citizenship. Your response was that’s “just tough”. Again, it’s simply incredible that I have to defend the value of personal identity and self determination against a libertarian.

[Your argument makes no sense to me. You insist on throwing a pile of complications into the mix, and then blithely assuming all that works in your favour. But it doesn't. Some bloke on a remote Aegean island probably didn't want his economy ruined by idiot pols in Athens. Tough; that's how your nationalism works. You seem unable to understand the idea of trade-offs -W]

> [Why the non-sequitur? -W]

If one thinks that they are the only homo sapien who could ever get fair free trade deals (for the USA, from its initial inception through to its final deconstruction (TBD)) or, for that matter, ANY deal ever made between homo sapiens, that someone would normally be considered to suffer from ...

https://en.wikipedia.org/wiki/Personality_disorder
https://en.wikipedia.org/wiki/Narcissistic_personality_disorder

Trumpkin has stated repeatedly on the "unfair" (to the USA) trade deals that the USA has negotiated and recently withdrew from TPP.

[Trump has no interest in truth, or free trade, or fair trade. He is pretty explicitly interested in unfair trade. But he's also a bozo, so why drag him in? -W]

Nationalism. Protectionism. Isolationism. Populism. (none of which are in my personal credo)

Today they will try to pass the AHCA, the latest version REMOVES 10 essential healthcare services from the bill in order to gain enough votes from the Freedom Caucus.

http://www.nbcnews.com/health/health-care/gop-health-care-debate-what-a…

IMHO, they ought to rename it the No Health Care Act.

[edit]

Nationalism. Protectionism. Isolationism. Populism. Authoritarianism (none of which are in my personal credo)

[edit]

WC, you are ignoring the argument.

Is free trade fair?
> [Yes -W]

No, it is almost inherently *unfair* - it may be instructive that the Wiki writeup on Free Trade Debate does not include the word 'fair' (though 'fairplay' does show up once).

WC,

> “I’m not suggesting they change citizenship, except optionally –W”

How could they not? When a country acquires new land, the inhabitants of that land now fall under their rule, their law, their protection, their taxation – they become citizens of that country.

Or alternatively they become displaced people living in country they are not citizens of – where the ruling country collects their taxes and sets their laws but they have no representation. In which case, y’boy Adam Smith might have something to say about that or else the Greeks will start dumping souvlaki into the Mediterranian (or would it be sauerkraut?).

> “You seem unable to understand the idea of trade-offs”

You, a libertarian, are talking about involuntarily, and without a vote, changing the ruling government of a group of people and splitting a country in two. You don’t get to trade democratic rights for some nebulous, and possibly nonexistent, economic gain. Especially, when I don’t really agree it solves the problem in the first place (and you’ve offered nothing to support it).

Your whole idea is a proposal to address dysfunctional governments. But a functional government buying a part from the dysfunctional government doesn’t necessarily solve anything. Sure, the dysfunctional government gets an influx of money but they could very well misuse the cash influx. After all, it got into the mess by miss using money in the first place. So, it doesn’t really solve the problem.

Furthermore, now the dysfunctional country has to deal with a hole in its country, that’s part of the functional country now. This would reduce tax revenue and add cost and complexity to running the already dysfunctional country. So, it’s not really a solution and could make things worse.

Secondly, it’s unclear that a functional government now owning a remote and currently dysfunctional property would make a profit off the transaction. The transition costs alone would be massive. New government offices, new positions, new laws, new rules, new taxation structure, new border crossing requirements, new citizenships(?), new trade rules, etc. There’s also the ongoing funding and support of the remote and currently dysfunctional property.

Here there’s really a tradeoff between the first two problems. If the functional country gets the better deal, that is there is a good revenue stream coming from the annexed property, then what’s left of the dysfunctional country is in an even worse position than before, having lost a high revenue generating property. If the dysfunctional country gets the better deal, then why would the functional country enter into the agreement in the first place?

Thirdly, at back to my original point, there’s the little problem of personal identity. To just so flippantly ignore the meaning and identity that one’s country provides them is baffling – especially from a libertarian. From the standpoint of self-determination, there is no difference between my citizenship being altered due to war/forceful occupation versus a governmental transaction I had no say in. In either case, my citizenship, and therefore part of my identity, has been altered without my consent. This is a violation of the founding principles of libertarianism.

It’s also a violation of democracy. I would be slightly more willing to accept this idea if it was dependent on a referendum of all affected inhabitants that required a super-majority to pass. I still think it would be a stupid idea, for reasons 1 and 2, but it would be slightly more ethical.

> “You insist on throwing a pile of complications into the mix”

They aren’t complications – they are important details you’ve failed to think of or include and relevant examples you’ve failed to provide. The fact that you used the Louisiana Purchase as your example is laughable. The example would only be relevant if it was in reverse – where France bought a large swath of the US from the Americans. Hmm, I wonder how Americans would feel about that?

> “Your argument makes no sense to me.”

It’s pretty simple – to involuntarily change the ruling government of a group of people is wrong. If their citizenship changes, then you have a loss of self-determination of personal identity – they involuntarily become a citizen of another country. Or, if their citizenship does not change, then they have no representation in the ruling government. On top of that, it doesn’t really solve the problem in the first place.

So it’s ethically wrong and politically/economically dumb.

[It seems like a fine idea to aim for. So getting governments to stop being roadblocks in the way would be an excellent start -W]

Does Dr. WMC want the deconstruction of the administrative state?

Steve Bannon said it at CPAC and, in a truly bizarre reverse engineering sort of way (meaning that Bannon didn't mean that Russia would be the major player in said deconstruction of the Trumpkin state. Ha Ha.), it is actually working to date.

Chaos and Anarchy and Tweets, oh my.

https://www.washingtonpost.com/blogs/plum-line/wp/2017/03/09/want-to-kn…
http://www.realclearpolitics.com/video/2017/02/27/glaude_deconstruction…

[Trump has no interest in truth, or free trade, or fair trade. He is pretty explicitly interested in unfair trade. But he’s also a bozo, so why drag him in? -W]

Call me a Cynic, or not, but I'm pretty sure most people, given the choice, would want unfair trade, as long as they were the "so called" winner.

I also asked an unfair rhetorical question (e. g. Is free trade fair?)

Trumpkin has no moral compass, in his worldview there are only winners and losers.

http://scienceblogs.com/stoat/2017/01/21/swept-with-confused-alarms-of-…

Trumpkin is the both the Red Queen and Red King.

Deconstructing the Administrative State
http://billmoyers.com/story/deconstructing-administrative-state/

Note to self: HoR's (pronounced hoes) vote on NHCA delayed until such time as they can properly count to 215.

{Revised] Note to self: White House: No more negotiating, time to vote (Friday morning).

https://www.washingtonpost.com/powerpost/gop-health-care-plan-hangs-in-…

I'm guessing the hoes will get their 215. I'm also guessing the NHCA will all be on one sheet of blank paper.

> Evolution requires competition to work.

You know the definition of "fitness" -- right?

This may help: http://inspiringscience.net/2012/02/27/natural-selection-different-mode…

"... I think there's a tendency for people to have a very straightforward, simplified view of natural selection when they think about evolution. As with everything in biology, the real story is more nuanced and therefore more interesting...."

Corporations don't have grandchildren ....

What is property, and who owns it, is decided by government of some sort.

For example. Someone writes a book. Can you copy it and print it? If the government says that the author has ownership rights aka copyright, then no, you can't. No copyright enforced by a government, then anyone can copy. If copyright, author can sell/rent/gift the right to copy his work. Copyright is defended and defined by government. It doesn't exist without government.

For example. Fishing. Right to fish some places is controlled by law to prevent over fishing. The right to fish is owned, a property right, can be sold, rented, or gifted. It is defended, assigned and defined by government. But in other places, anyone can fish all they wish. This works out fine, as long as there are far more fish than the fishermen can catch. An non-managed Commons. No property rights, only the right of anyone to fish as they wish.

For example. Land. Why do you "own" land? Because one fellow with a sharp hunk of metal killed Harold Godwinson in 1066. Or maybe it was an arrow, accounts vary. But in any case, William, the Duke of Normandy ended up with the land. Any ownership you have is based on the victory of William over Harold, as assigned and defended by first William and his followers, and then by later Kings, Dukes, and other governments.

Your ownership of your person might well date to 1066 as well. While the details seem murky, slavery was at least somewhat common from earliest records to William's conquest and was at least uncommon by 1100, rare by 1200, and unheard of by 1300. Only formal edict of William on the subject just banned overseas trade of slaves. Of course, that's government interference with the Free Market in Private Property, namely slaves.

How could you have any market without property? How can you have property without a government?

A market without a government is a fish without water.

[Err, yes. But since I've already said zero government isn't reasonable, why are you bothering to repeat the obvious? -W]

Governments vary from the formal varieties to the customs and taboos of an unorganized people. From Absolute to Kings to Democratic to unorganized consensus.

"Property is Theft" is an overstatement. But it's a better place to start than the nutty fogs of Libertarianism.

Entertaining although not very edifying.

Broadcasting, healthcare and higher education. Three UK sectors where some degree of central planning has been essential to extraordinary success. Likewise there are plenty of examples where private enterprise has driven extraordinary success.

I've never understood why people argue about economic theories which require we ignore obvious counter-examples.

[Perhaps you need to get out more :-). The NHS is not regarded as an extraordinary success by everyone. Higher education is largely not planned by the govt. The Beeb is good, but again not planned by govt - it's independent. It is *funded* by govt, but that's different -W]

WC - you are arguing against yourself here. Nationalism has long been *assumed* as part of the free trade debate. Ricardo developed his theory of comparative advantage BUT....

"Some descriptions of comparative advantage rest on a necessary condition of capital immobility.

David Ricardo himself recognized this as the primary flaw in his theory. Regarding his classic example, he wrote:

...it would undoubtedly be advantageous to the capitalists [and consumers] of England… [that] the wine and cloth should both be made in Portugal [and that] the capital and labour of England employed in making cloth should be removed to Portugal for that purpose.[6]

The theory necessitates offshoring in domains where capital is mobile. To correct for this, Ricardo added two assumptions: (i) that investors would be "satisfied with a low rate of profits in their own country, rather than seeking a more advantageous employment for their wealth in foreign nations,"[7] essentially he appeals to nationalistic altruism; and (ii) that capital is functionally immobile, which was true when he wrote. Regardless, comparative advantage is a domain-specific theory, which only operates in situations where capital is immobile. Therefore, some say it does not apply to all types of international trade, particularly with respect to manufacturing"

Do you follow? The benefits of free trade depend on immobile capital and nationalistic altruism.

And you bought into this rigamarole for most of your adult life? You still believe it today?

[Wiki is good for some things. But on FT, I wouldn't trust it -W]

"So getting governments to stop being roadblocks in the way (of ‘free trade’) would be an excellent start"

Then ask the right questions: again starting with the very obvious.

Governments rule with the consent of the governed.

Does 'free trade' work out to the gain of absolutely everyone?

[That would be astonishing if true; nothing else does, why would FT be an exception? -W]

If a majority is harmed by 'free trade', then why should a government allow it?

[A majority is not harmed by FT. A majority benefits -W]

Consider the case of a "Pharaoh State". One person owns all property. Owns all businesses. Owns everything. This state is stable in a 'free market', as the owner never has to sell anything, and controls every aspect of the economy, and collects as much rent as the 'free market' will allow. This state is not free for all citizens excluding the Pharaoh. This state is not to the benefit of anyone excluding the Pharaoh. Would you consent to such a state?

[What is the point of your hypothetical question? It appears to bear no relation to reality -W]

well since we're sort of on the topic, I guess I'll ask a question that I've always thought the liberty-lovers should support: why can't we allow people to move freely around the world, live where they want, become citizens of whatever country they decide they want to settle in? Why should nationality (and restrictions on travel, work, etc) be determined by the random location of one's birth? This seems to me the fundamental unfairness of the world as it stands.

[There are two answers to that, or two strands of answers, depending on whether you mean "in practice" or "in theory". And a third, I suppose, depending on "according to whose theory". You appear to be asking for an answer from the viewpoint of "the liberty-lovers" by which you might mean the not-clearly-identified libertarians. As it happens, Libertarian perspectives on immigration exists, though short, and tells me "Free immigration (free movement of people) is regarded as one of the core concepts of libertarian theory and philosophy". That seems to be in accord with https://www.lp.org/issues/immigration/ or https://openborders.info/libertarian/. However, as usual, I can't tell if that represents a common or fringe Libertarian view -W]

My metaphor for borders is the skin we evolved with. We could lament the day life in the ocean stopped being a plasmid and evolved cell walls, but to now strip off our skin and dive in the ocean hoping for the glorious merge... well, I'll pass. My skin has a function and until those functions are replicated I will treat it sensibly.

Russell, that may be the worst analogy ever.

The EU has done a decent job of removing those cell walls.

Capital has essentially no cell walls these days; why should labor be different?

Arthur, you may wish to read my brief essay from 2002Map Ref. 41°N 93°W

#38 [and WMC reply]

I asked that question myself yesterday as "no borders" or "total freedom of movement" is part of my credo.

This sort of breaks all the rules with regards to nature and species territory.

[Bad?] analogy starts:

I have had three dogs (1st two dogs from the same litter, then one was poisoned and had to be put down, and I got the 3rd), Queenie (female), King (male) and finally Rascal (male).

I'm an expat eurotrash paleface mix breed from Burlington, Vermont who now lives in a predominantly (say 99+%) very low income Afro-American neighborhood called "The Bottom" (formally Marcus Bottom) in Vicksburg, Mississippi. Dead end street, rent a shotgun house on two acres (surrounded on three sides by about 10 additional acres of wooded (mostly state owned) acres).

In the MLK tradition of "free at last" I want my dogs to be free range all the time.

Long story short?

The next door neighbor likes to keep and/or feed feral cats. Many cats, they have.

Queenie and Rascal had/have a "habit" of chasing and killing said cats.

I miss Queenie very much.

Rascal has to stay on a 20-foot leash now. While King is still free range.

[Bad?] analogy ends.

From WMC last link ... "First, the libertarian principles invoked in these arguments have appeal to many non-libertarians, and therefore this case can be convincing to many non-libertarians."

I would be one of those "non-libertarians" who espouses open borders, or, in fact, no borders policies. I guess I'm at least one part anarchist.

Bernie Sanders approved this message.

{Revision 2] Note to self: The NHCA died today.

So now it's on to Arthur Laffer for the 3rd time (POTUS 40 (fail), 43 (fail) and now 45 (predict fail)).

https://en.wikipedia.org/wiki/Reaganomics#Debt_and_government_expenditu…

With open borders, how open is too open? Do those who seek open borders have no limits? Who decides how many move to my country? (obscure Congressional subcommittee) What factors do they use? Are those factors ethical? Will we have 100,000,000 move here tomorrow? Is that absurd? Ethical for whom? If ethical for the whole, why is 100,000,000 unrealistic?

Hmm. A survey a few years back showed that 3% of the world's population desired to emigrate to more congenial territories. Call it 300 million worldwide, give or take.

Most immigration is regional in nature, with even the most adventurous wanting to maintain family connections and understanding the near abroad more than the far.

And one third of those who leave their shores return within 5 years, hopefully with minds broadened and pockets filled.

Before speculating on a broad issue like this, it is helpful to scope it. 100,000,000 is a round figure. It is not realistic.

There are about 60 million displaced persons in camps and shanty towns scattered around the planet. They need to find homes and a homeland. That is a real issue--not panic over wave upon wave of the great unwashed (waves? unwashed? hmm...) showing up on our doorsteps to steal our jobs and daughters.

Because that's not happening.

"What is the point of your hypothetical question? It appears to bear no relation to reality."

The Pharaoh State is an abstraction in the same way a "free market" is an abstraction. The real Pharaoh only controlled at peak only about 75% to 90% of the surplus, and that varied a lot with time. The Pharaoh also owned all or most of the the land, but later Egypt developed private land ownership, as well as expanding temple land ownership. Most people were basically slaves, not even owning themselves.

As you can dream about a free market, with small holders having little market power, I can worry about a Pharaoh like dominated by a few market, with a vast concentration of market power in the hands of a few dictating the increasing wealth of the few at the expense of the everyone else.

The USA is closer to a Pharaoh economy than an equal market of small holders.

Back to trade. Suppose there is a country with a free market right next to a country with a Pharaoh.

The Pharaoh proposes "free trade". What that might mean is that the Pharaoh sends his surpluses of wheat and buys land and other properties with them, to expand his control into the free market country. The Pharaoh only buys land and such, never sells, only rents. How, exactly, does the free market country stop the take over of the country by the market place?

[That I think is a reasonable question. Even one with an analogue in the real world: it's like the USA worrying about it's trade deficit, with China perhaps. For which the answer is America Can Run Trade Deficits Forever. That's the real-world answer. In your thought experiment, I think the answer is that the land the Pharaoh gets to buy is only a small percentage of the total -W]

> [Perhaps you need to get out more :-). The NHS is not regarded as an extraordinary success by everyone. Higher education is largely not planned by the govt. The Beeb is good, but again not planned by govt – it’s independent. It is *funded* by govt, but that’s different -W]

No healthcare system is regarded as an extraordinary success by everyone. I'm sure that you are as aware as I that the NHS is so regarded by a remarkable proportion of its users and has come out at the very top of international measures of efficiency and public regard. Having lived in a wide range of countries with a wide range of systems I see no reason to disagree. For it's price (9-10% of UK GDP cf 17% in USA, 14% France, 12% Germany ...) it's even more extraordinarily successful. If you believe other wise perhaps you can explain why? Having built businesses in the UK and other countries I'm also aware of how generous it is to startups who, because of its funding mechanism, don't have to worry about healthcare costs. Just one of the reasons why starting a business in the UK has been so easy. My experiences of starting business in France and Germany, by contrast, is of excessive demands from day 0, let alone day1.

[I don't regard the NHS as an extraordinary success. Nor do quite a few people in the UK. People regularly demonstrate their lack of regard for it by paying large amounts of money for treatment elsewhere. See-also http://www.bmj.com/content/327/7424/1129, esp fig 1 -W]

The BBC in not, of course, planned by government but it is entirely possible to imagine a government body of the same pattern with hypothecated funding and equivalent strengths. Thus your point is nit-picking perhaps the result of a desire for market solutions to everything, even where they don't actually do so well. I can think of no private-sector media company which has been anywhere near as successful.

[Sorry, I failed to understand your logic. Your defence of the Beeb as an example of central planning is that it is possible to imagine such a thing? That's just silly -W]

UK higher education has, indeed, been planned by government and largely government funded. Are you discussing some parallel system of which I'm unaware? Was the creation, for example, of the post-92 universities an act of God, Mammon or the market? Not as far as I'm aware.

[Neither Oxford nor Cambridge was planned by the govt -W]

0 out of 3. Perhaps you should get out more ;-)

[It is easy to win if you appoint yourself judge -W]

Timmy is making a few unreasonable assumptions. Timmy assumes that the assets bought by overseas investors have a lower return on investment than the rest of the economy's return on investment. Included in this is the assumption that the reinvestment ratio on return of investment is similar or lesser.

[Timmy appears to be assuming that the value of the assets bought by foreigners will remain constant while the economy grows around them. I wonder if this is the merchantilist source? We're buying their trash for consumption, which will not produce new wealth; they're buying our real assets which will grow. Oh noes! Well, you can ask him about that if you like -W]

If the return on investment and reinvestment ratio for overseas investors was the same the overall economy, then once the overseas investors have bought 1%, they will continue to have 1% even after the economy doubles in size. More if they keep investing, of course.

You seem to be arguing that if the USA doesn't need to worry at the present, then every case will be the same as this forever and ever. I don't follow that reasoning.

Libertarians usually deny the existence of economic market power.

[That's a very strange thing to say. I would say the opposite: that they are very keen on it -W]

Tom Fuller:

There are about 60 million displaced persons in camps and shanty towns scattered around the planet. They need to find homes and a homeland. That is a real issue–not panic over wave upon wave of the great unwashed (waves? unwashed? hmm…) showing up on our doorsteps to steal our jobs and daughters.

Well said, Tom, absolutely no snark intended.

Phil -

Libertarians don't tend to deny the existence of market/economic power as much as the way that market/economic power translates into political power. Which is one of the biggest dangers; in a putative libertarian society, the state is too limited to provide a check on corporate size and power, meaning that those same corporates will quickly assume political power. Challenges by plucky free upstarts will be stomped.

The standard lib response to which is that they wouldn't do that because it would reduce profits/be against the rules/whatever. Never mind it's what happens right now..

[You people spend all your time fighting strawmen.

No, that is not the std.lib response. Which is, instead, that the problem of economic power translating into political power is government regulation. Because political power gives you the ability to strangle rivals. Which is why they want to get rid of it -W]

Oh, and the NHS is very effective *for the money* [{{cn}} -W]. Adding the extra £20-30 billion a year to being funding in line with European standards would probably bring results in line with European standards, especially if they dumped the ongoing part-privatization efforts. If you prefer private insurers.. my experience is that they run a mile at the first hint that you might have an expensive condition.

> [I don’t regard the NHS as an extraordinary success. Nor do quite a few people in the UK. People regularly demonstrate their lack of regard for it by paying large amounts of money for treatment elsewhere]

I didn't expect you to. But you are in a minority, not only absolutely but also relative to public appreciation of health services in otherr countries. https://www.kingsfund.org.uk/projects/public-satisfaction-nhs/bsa-surve…

[I'm not interested in the public-satisfaction type surveys -W]

As for its weaknesses (which, as with all such services, are legion) perhaps we might increase the funding to something close to that of the rest of Western Europe or do you think that comparing apples and oranges is OK for health services though unacceptable for matters of climate?

> [Sorry, I failed to understand your logic. Your defence of the Beeb as an example of central planning is that it is possible to imagine such a thing? That’s just silly -W]

I'm sorry too but I'm not responsible for your disabilities.

[You're being rude and childish. Don't be -W]

The point is that private enterprise is sometimes really inferior to public enterprise. If you don't believe it consider the BBC - which is a public enterprise and could be a wholly government-owned body (a quango), The BBC could not exist as a private enterprise - it could not be created as such or survive as such. Yet it is essential to the existence of the worlds most powerful (bang/buck) creative media industry and it earns huge amounts for the UK. That's not silly.

[You are failing to distinguish between central planning and public ownership -W]

> [Neither Oxford nor Cambridge was planned by the govt -W]

Really?

[Yes. really -W]

I'm surprised that you'd make a narrow point like this just to "win" an argument. By whom were they planned and funded then? Or don't Royalty and the Church count?

[The Church is not the government. Nor did the Church centrally plan either -W]

Choosing Oxbridge rather makes my point for me, in any case, since neither Oxford nor Cambridge are typical.

[Indeed. They are better than typical. They are outstanding even when ranked across the world -W]

> [It is easy to win if you appoint yourself judge -W]

You started it! :-)

[Bollox -W]

What really surprises me is that, as an occasional reader I appreciate the rigor you apply to arguments about climate science so I'm surprised that you allow yourself such doubtful arguments about matters of social and economic policy. But it won't stop me appreciating your climate stuff.

RE: Timmy. I see no reason on engage with Timmy. He is well paid to be wrong in a specific political way, I'm not paid to correct his errors. I will just wish you would find a more accurate economist to quote. Or stick to climate science.

[I find Timmy's views on economics very helpful. I find suggestions of what exactly I should choose to write about rather less so. You must learn to expect us to disagree -W]

RE: Market power. To communicate, we need to use the words the same way. Basic economics:

Markets work well, as long as some conditions are true.
1) Many buyers, many sellers.
2) Easy entry into and exit from the market for both buyers and sellers
3) Efficiency rather than robustness is the meaning of "work well"

If these conditions are true, no buyer or seller has market power.

Market power refers to conditions when there is one or a very few buyers, or one or a very few sellers. Market power can exist or be stronger if market entry and/or exit is limited, for example if the number cabs are limited in a city, a cab driver has some market power.

[That's a good example. Many cities have artificially limited the number of cabs they permit, to the detriment of the consumer, essentially giving in to producer interests. This is an example where more, rather than less, free market would be good -W]

One buyer has market power when there are many sellers. The lone buyer sets the price, quality and conditions. The many sellers must accept these terms, or exit the market. If market exit is costly, then even harsher terms can be demanded. Same thing with one seller and many buyers.

[I notice that you offer no examples -W]

Wiki reference:
https://en.wikipedia.org/wiki/Market_power

Also see:
https://en.wikipedia.org/wiki/Natural_monopoly

The only possible checks to market power are political power, or new technologies, both of which can also which can give rise to new market powers. Market power is not always bad, the cab driver case may prevent over use of a Commons, namely the streets of a city, an example of a market power created by political power. Uber wants to overturn this market power, and create a new market power owned by Uber, an example of a market power created by new technology.

"Many cities have artificially limited the number of cabs they permit, to the detriment of the consumer, essentially giving in to producer interests. This is an example where more, rather than less, free market would be good."

True, perhaps, if the streets were empty, or if cars paid for access to the streets based on congestion. The streets are a Commons. More access to the Commons isn't always a good thing. Also, robustness and predictable fares vs than minimum cost as goals. Cab riders would pay lower fares, on average, but the cab would be less safe, the fare would be less predictable and the streets would be more crowded. Hard to say if that is a gain in total for the consumer. It might be, and might not be.

"I find Timmy’s views on economics very helpful."

Even when Timmy is incorrect? Really??

Examples of monopolies and monopsonies abound. Find a few for yourself. Even Adam Smith could find some, in "Wealth of Nations". Open your eyes.

I read that Britan socialized everything during WW2.
Apparently dubious source: http://www.salon.com/2009/08/14/healthcare_28/
Is that true?

[No. Churchill lost the post-war election to the Labour party, largely because the public didn't think he'd do the kind of "socialisation" that this is cheering. The NHS and so on were Labour policies opposed by the Tories. See https://en.wikipedia.org/wiki/Attlee_ministry or https://en.wikipedia.org/wiki/Political_history_of_the_United_Kingdom_(… -W]

Sorry if you think I'm being rude and childish. It wasn't intended - just a poor attempt at humor. Calling people "just silly" when they make a point you don't appear to understand isn't entirely helpful either.

I don't have time to address the rest - but I'm surprised, given the high calibre of the stuff you write about climate science, at your arguments here.

> “Oh, and the NHS is very effective *for the money* [{{cn}} -W]. “…“[I’m not interested in the public-satisfaction type surveys -W]”

Ok, then how about this 2014 study - http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirr…

[Better; you're now actually trying to support your views with data. Or at least, a report. But you have to be careful of confirmation bias. Just as the denialists can always find a paper that supports their wonky ways, health care is sufficiently complex that you can get a variety of results depending on the questions you ask. I found https://www.sochealth.co.uk/2015/01/18/international-comparisons-say-nh…. Quotes comparing health systems is very difficult for a number of reasons... The World Health Organisation last attempted to rank health systems in 2000 (when France came 1st and the UK 18th), refusing to do so again because of the complexities involved. Your study is mentioned there; and they point to https://iea.org.uk/blog/the-envy-of-the-world-a-closer-look-at-the-comm… -W]

Here ya go, show us how the system dynamics ought to work:

http://ncase.me/loopy/

> Greek ... rather have the Germans running the country ...
https://en.wikipedia.org/wiki/Axis_occupation_of_Greece

[Godwin. You lose:-) -W]

I found an apartment for Godwin long ago, I get one free.

http://assets.amuniversal.com/2b0c6d909a05012e2f8200163e41dd5b

I will admit the "skin" metaphor is flawed, but only for reasons such as, what part does the human digestive system take in this comparison, and what represents smugglers bringing in untaxed liquor?
As for waves of immigrants, isn't that forecast by rising sea levels and crop failures predicted by warming? Are we really assuming business as usual in future prediction? What is world population going to be in 2050? Rhetorical, sure, I already read the figures.
But I'm not proposing the stupid wall. People like me will go ahead and admit the hundred million refugees for simple humanitarian reasons, and watch another 80 million sneak in, and trash the place, and enrich the plutocrats, and be too polite to say we told you so.

You may like this (found in a .signature, not checked):

Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. -- Frederic Bastiat , French economist(1801-1850)

The book, "The Golden Passport," by the veteran business journalist Duff McDonald, is a richly reported indictment of the school as a leading reason that corporate America is disdained by much of the country.

[Who he? He has a very brief wiki page. I wonder that he is considered notable -W]

"The Harvard Business School became (and remains) so intoxicated with its own importance that it blithely assumed away one of the most important questions it could ask, which was whether the capitalist system it was uniquely positioned to help improve was designed properly for the long term," Mr. McDonald writes in the book, to be released in two weeks.
Continue reading the main story

His answer? "With economic inequality at a hundred-year high and meaningful progress on climate change and other social and environmental issues embarrassingly paltry, the answer to that question is obvious. It is not."

[He has asked the wrong question, and so got the wrong answer. The capitalist system was not "designed" and could not have been. It's much better than that. It evolved. Just as no-one could have designed an eye -W]

Citing a report from the Aspen Institute, Mr. McDonald explains that "when students enter business school, they believe that the purpose of a corporation is to produce goods and services for the benefit of society."

"When they graduate," he continues, "they believe that it is to maximize shareholder value."...

[So, you see, the school is teaching them something useful; because that is what businesses should do. Within the system of law. Don't try to overload on businesses things that are not their core function. Things should do what they are supposed to do, not other things which "nice" people would like them to do. Hayek will explain this, if you read him -W]

https://www.nytimes.com/2017/04/10/business/dealbook/11-andrew-sorkin-h…