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[kaijyuu]

I agree that if the government can do something better than business, they should. The problem is I'm having trouble finding a good example of this (outside of things like the military- but who knows, maybe private enterprise could do that better too? I haven't examined the issue at any depth to tell). I support free trade only because it seems to have the best results. If you can prove to me that government run programs would have better results than private programs for the same thing, I would support the government.

I feel this is a trick question. What "result" are you talking about?

Healthcare in other western countries is cheaper and more people get the treatment they need. That sounds like a superior "result" to me. But the systems aren't profitable, and if that's the result you want then of course their systems are worse.

[Frumple]

It's passing a bit, but I do have to ask... folks here do know that Darwinism has been dead in the biology field for several decades now, right? And that it was never actually accurate, at all?

I kinda' understand the appeal of drawing on it (it's got a good rhetoric, in certain ways), but there's reasons it's not actually used by anyone even remotely reputable anymore. It was flat out wrong. Using it as a conceptual basis is... risky, in the sense that you're probably introducing major problems, because the concept system you're using as a base is itself inherently flawed.

It did spark off a lot of stuff, and the things we use nowadays owe a lot to work done related to it, but...

Can throw out a bit more detail if folks want, I guess? It's not actually that hard to pick up more up to date info, I think. S'more of a thing for a different thread, too...

[Leafsnail]

The more fundamental problem is that the idea of natural selection is descriptive.  It tells us about what happens in nature.  It does not imply that we should attempt to emulate it in our financial markets or societies any more than the idea of gravity suggests we should strive to put everything as low down as possible.

[mainiac]

The reason why I'm saying that full employment would restore revenues rather then leading to ongoing stagnation is because I used the words "full employment".  You can take issue with the assertion that full employment is possible (by throwing out all of mainstream economic theory as it existed between 1946 and 2007).  However it's simple arithmetic that if you remove the decline in tax revenues associated with the recession and the increases in spending on things like unemployment insurance and SNAP benefits that it would help government revenues enormously.  The only optimism is in believing that US monetary and fiscal policy could be as successful as it has been in places like Sweden and China if we were as aggressive as in places like Sweden and China.

The recession didn't destroy our economic capacity.  It's not like a nuclear war.  People are unemployed not dead.  If the economy go back to it's normal capacity then... it would be back to it's normal capacity.

That's not to say that you couldn't maybe save more money by reforming military spending or agricultural subsidies or by taking food out of the mouths of starving children.  Those are all quite possible.  I'm just saying that your basic "things that are already legislated and would happen if congress never passed another law" package includes:

1) Afghanistan and Iraq withdraw.
2) Expiration of the Bush tax cuts

and if the Fed and Treasury did their job properly then in a few years we'd have:

3) Return to full employment

So you don't need any more then this to return to balanced budget.  It's a really simple plan but it would do the trick.

[Flare]

I have trouble finding an example of the government running something more effectively than private enterprise.

People in certain governmental institutions are very motivated at fulfilling their roles, for example the armed forces in some countries take a lot of pride in keeping themselves in the best shape and making the best of their resources, however much it is, not out of any monetary desire. Emergency services also often share this sort of work ethic. There are many ways to instill this sort of ethic in people, be it through material goal, personal standards, or conceptual motivations.

This is a question of how well can both adapt to changing situations. Of which when we're talking about how a private and governmental institution can change, it largely depends on the people in charge. For example, very bad banking practices led to the near fall of several large banks. This evidently did not change as Barclays who was bailed out was found to be fixing their loan rates. And not only this, seemed to be doing so in response to other banks doing the same thing. There are instances where private industry can't adapt due to its leadership or extenuating circumstances. Governments too can suffer from this, though of course both have shown that they change when circumstances require.

When private enterprise does poorly, it's usually because there are regulations put in place that prevent them from increasing efficiency.

Well no. When private enterprises do poorly it is commonly due to incompetence or laziness. Do you know how many people with no business experience opens up a business? Just take a look at random kickstarters page and be amazed at just how poorly some of these ideas are thought out.

An example of this is the private health care system (I just opened a big can of worms, didn't I? This is just a small example, I don't want this to become the focus of the discussion). People claim the government can operate it better than business. But getting rid of a few simple government regulations could drastically reduce costs by increasing competition. One such thing is the inability to purchase out-of-state health insurance. If I, as someone living in New York State, were allowed to purchase health insurance from a company in Pennsylvania, imagine how costs could be driven down; the health insurance companies in New York that had cornered the market would have tons of new businesses to compete against, and the best way to attract costumers is to lower prices or improve the quality of service. So this is an example of government rules preventing the best effects of free trade from occurring (because in this case the free trade is being inhibited).

I really don't know that much about health care systems to speak very much about it. Other members of this forum seem to know much more. I will address the regulations though. I admit that there can be, and are, very poorly thought out regulations. That being said, these regulations are there for the sole reason that people demanded that they exist, and most of them seem to exist for plausible reasons.

The main question is whether inhibiting the market in a certain way will provide benefits that justify it. And in terms of insurance, this seems to be the case.

As far as I know, people care a lot about insurance, so much so that they often go to court over it. The regulation of what an insurance company can and can't do seems to be justified in that the states have the power and not the federal government (unless of course you think justice counts as inhibitors of the free market). If it was the federal government making the laws, there would probably be a national market for it. This however does overlook that each state has very different demands that is asked of the insurers, and different regulations that arise from this. These demands for better or worse have been asked to be mandatory. Many of these are restrictive, for example making everyone buy health or any other insurance of some kind. For laws to exist like these there must be support for it, I don't think any insurance body would offer this select state insurance if its people wanted insurance agencies to provide such a demanding and risky service. And if they don't, then the free market would have clearly over-looked them as their ideal desire of what insurance they want won't be available. They'd have to settle for sloppy seconds.

It's very hard for me to make a solid argument when our current system does not usually support 100% free trade policies. What I'm getting from this debate is that I'm trying to argue for free trade - "let private enterprise do their thing" -, and you are arguing against it - "the government can do some things better than business". But I can come up with no perfect examples to support my claim, because 100% free trade hasn't existed in the US. As such, I have no practical examples, only "what if"s.

We could look at places where regulation exists minimally, or indeed are not enforced at all. There are certain places in this world where regulations can be waived when you give money to a certain individual. Third world countries are often like this. The black market is one other such entity, though I'm sure you're aware of the danger the products or services themselves can present even without any of the legal ramifications.

I agree that if the government can do something better than business, they should. The problem is I'm having trouble finding a good example of this (outside of things like the military- but who knows, maybe private enterprise could do that better too? I haven't examined the issue at any depth to tell). I support free trade only because it seems to have the best results. If you can prove to me that government run programs would have better results than private programs for the same thing, I would support the government.

We both agree that the main aim is the general good of the entire population. We only differ on how this can be achieved. And I guess this overlooks an issue with government. It's slow because many people have asked it to be such. We've rather it be accurate and careful with its workings than the other way around and absorbing the mistakes for the efficiencies that will arise. Political and economic stability is its real job.
So if voters opt that the government take the role of a certain industry, it should be sending a signal about how people wish said industry to be, yes?

As for the armed forces, you really don't want it to be owned by certain members of society and excluding others. And of course, you really don't want any foreign investment money going into it if you want to keep sovereignty. Motivation to do a better job comes in many paths, some militaries make the best with what they can and almost all members are invested in the institution as a whole. While people's material self interest in important, appealing to only this one facet of people's motivational set isn't reliable nor efficient. For most people, a whole plethora of priorities take precedent over making more money than you need to live comfortable for the foreseeable future. Soldiers, emergency response personnel, and doctors in some countries have institutions that tap into these other motivational facets as well as their material self interest to achieve similar results.
We see private industry doing this today as well. Not only are they giving people money to do their job, they want to make their employees to be invest in their place of employment in the same way as these other professions that the government employs.

[alway]

This applies to businesses. A business, like a species, is in constant competition for costumers (which bring profits) just as the birds are in a competition for food. The business that is able to attract the most costumers (or as in the bird example, the bird that is able to get the most food) is able to live on and make a profit. The unprofitable businesses, having made no money due to lack of customers, go out of business. Just as the bird that could not collect enough food would go extinct. The end result is the business that attracts the most customers survives, and in order to have attracted the most customers they must have had the lowest prices or highest quality goods. Or awesome advertizing.

I fail to see how this is a misapplication of the so-called "survival of the fittest" principle. Enlighten me as to why you think it is not. As for these theories of economics, what I am talking about here is one of the basic arguments of laissez-faire economic policies and classical liberalism. This stuff goes back to Adam Smith. Competition is good, is the totally basic idea.

No, it does not apply to businesses. Here's how evolution actually works: 1. reproduction with offspring having heritable traits and a small amount of mutation 2. individuals unable to successfully reproduce do not reproduce, leading to their genes not carrying on to generate new offspring 3. the old parent generation dies off, with the new generation becoming the parent generation for the next round 4. repeat
Speciation then occurs when populations within the species become isolated from one another, and their gene pools diverge.
Now, you may notice something businesses lack: reproductive organs. A successful business does not, in fact, have sex with other businesses to create baby businesses with the traits of mommy and daddy business which then take the place of the mommy and daddy businesses who died of old age. Evolution works through the slow process of generations of near-identical progeny, not the near-random settings of business. In fact, setting a mutation rate too high will actually cause evolution to stop working, as the changes are too major for the genetics to be stable.

Similarly, you misrepresent 'fitness.' Fitness does not mean 'stronger' 'faster' 'better,' it just means more successful at reproducing. Take for example the human body. Do you know why the male reproductive system is a ticking time-bomb of cancer? It's because from the evolutionary standpoint, the death from cancer is perfectly acceptable because it occurs after the prime reproductive age, and the same things set up that time-bomb happened to slightly increase reproductive ability. Short term profits, if you will.

Large businesses and massive corporations, maybe, but not so much at a smaller scale. Competition doesn't automatically make enterprises efficient, but it encourages them to be efficient. After all, efficiency means more money, and what business owner wouldn't want more money?

Again, you are lax with your definitions. Efficiency is not good. Efficiency is not bad. Efficiency is efficiency. The question is: what are they efficient at? Old paper mills were efficient at creating cheap paper; they dumped toxic waste in the rivers that had massively negative effects, but at least they were efficient about it.
This is what unregulated efficiency looks like: http://english.peopledaily.com.cn/90882/7732438.html

One of the fundamental principles of this idea is that individuals are motivated by greed. Business owners want money. In order to get that money, they have to have a good business. They have to have something that I would want to buy. Otherwise I'd shop someplace else. The problems today (mostly with big business) is that enterprises are finding loopholes to exploit in order to gain quick and easy money. This undermines the whole idea, so naturally stopping this from happening would be very good for the system as a whole.

One does not need a good business to make the most money; one needs a monopolistic business in a sector with high barrier-to-entry costs. In an unregulated business environment, there is also nothing to stop the big players from colluding to increase prices, keep out competition, or, fixing Libor prices. When there is one store in town, there is no where else to shop. And, again, stopping those loopholes you mention is the whole point of regulation. It doesn't just happen, it must be regulated away precisely because it doesn't just happen; if it just happened, there would be no reason for regulations to have been passed in the first place!

[lemon10]

Again, you are lax with your definitions. Efficiency is not good. Efficiency is not bad. Efficiency is efficiency. The question is: what are they efficient at? Old paper mills were efficient at creating cheap paper; they dumped toxic waste in the rivers that had massively negative effects, but at least they were efficient about it.
This is what unregulated efficiency looks like: http://english.peopledaily.com.cn/90882/7732438.html

I have to disagree. Being more efficient is always better as long as it doesn't make anything else worse.

Now, you are right, a quest for greater efficiency can do some pretty bad things (eg. sweatshops, not caring that you are dumping chemicals), but if there is a choice of making 100 cars for a million dollars, or a 100 cars for 10 thousand dollars without any impact on quality, no massive pollution increase and still paying the workers living wages, the cheaper and more efficient way is simply better.

[kaijyuu]

Efficiency always comes at some alternate cost, though. You can't get something out of nothing. Some costs you probably won't be sympathetic to (workers can't be quite as lazy), others you might (no dumping into the river), but a cost will always be there. So yeah, I'm on the side of efficiency being neutral, not good or bad.

[Bauglir]

It's passing a bit, but I do have to ask... folks here do know that Darwinism has been dead in the biology field for several decades now, right? And that it was never actually accurate, at all?

I kinda' understand the appeal of drawing on it (it's got a good rhetoric, in certain ways), but there's reasons it's not actually used by anyone even remotely reputable anymore. It was flat out wrong. Using it as a conceptual basis is... risky, in the sense that you're probably introducing major problems, because the concept system you're using as a base is itself inherently flawed.

It did spark off a lot of stuff, and the things we use nowadays owe a lot to work done related to it, but...

Can throw out a bit more detail if folks want, I guess? It's not actually that hard to pick up more up to date info, I think. S'more of a thing for a different thread, too...

I'd actually be interested in that. Depends on what you mean by Darwinism - I'm assuming here the mechanisms by which evolution occurs, as hypothesized by Darwin (as opposed to, say, the concept of natural selection if understood in the proper terms).

At any rate, there is a similarity between biological evolution and the idea of free market capitalism. It's just that businesses are eliminated only through competition (this is a huge difference, since it means that a business without significant opposition can persist theoretically forever), and in that you have no sexual reproduction (you can still have an evolution analogue without this, but it means that the passing of information is a lot more subtle; you wind up with people studying successful businesses and attempting to isolate the useful principles, stuff like that). The important thing is that, in theory, the "optimal" examples will crowd out the others, whether in the market or mating season. The problem is that, in practice, there's only one way to be "optimal" (get lots of money very fast), which prevents diversification (crucial to a healthy population), and startup barriers prevent new ideas from entering the market at all.

On top of that, you've got the catastrophic moral issues. Any sort of natural selection process accepts huge amounts of waste as the cost of progress - in this case, the livelihoods of the owners of failed businesses. And that's assuming the process even worked properly, which the aforementioned problems prevent. As a consequence of those problems, we have the current distribution of wealth in the US (and believe me, that distribution is poisonous to economic growth and is not due primarily to the wealthy earning that kind of discrepancy). Free market capitalism worked great, when it didn't cost millions of dollars in startup funds to price your shoes competitively. As anybody who's studied evolution can tell you, evolution as an algorithm is a last-resort method that's really only useful when you can't directly tackle a problem analytically. It's okay to say, "Yeah, I don't think we're able to come up with an acceptable substitute with our current level of technology", but to say we shouldn't even try is absurd.

This got kinda rambly, sorry about that. Hope it's coherent.

[Nadaka]

Where is the evidence that "when businesses fail, it is usually because of government regulation". I have seen strong evidence to the contrary and very little supporting evidence. That is a baseless assertion bordering on irrational and unfounded dogma. Regulation is fundamentally about making business more honest (not ripping off customers and employees) and minimizes the unpaid externalization of costs (socialization of cost). It isn't perfect, but it generally makes the market more free by reducing the inequity of opportunity. If you want to argue against specific regulation, go right ahead. But arguing against regulation as a concept is idiotic.


Most businesses fail because the right idea, at the right time, at the right place, with enough resources behind it is an incredibly rare set of circumstances.

[SalmonGod]

I'm glad the whole "Survival of the fittest" saying is being taken to task here.  It's repeated too often by too many people as their core life philosophy, and it's an extremely damaging misunderstanding that needs to go away.

Survival of the fittest is bad language.  The phrase should actually be "Survival of the best fit".  The most successful species are those that exist in harmony with their environment, not those that dominate it by being the most badass motherfuckers around.  When most people recite "Survival of the fittest" like some divine truth, I think they're usually referring to superpredators.  Do so many people really believe that an ecological system is made up entirely of predators, or that predators are always the most successful type of species? 

Adaptive pressures in natural selection nudge species into specific ecological niches, where there is energy available that isn't being used.  If there is something in an environment that nothing eats, something will evolve the capability to eat it.  That doesn't just serve the purpose of feeding that specific species, it also serves the purpose of bringing that energy into the ecological cycle and strengthening it as a whole, because individuals of that species are still food for other species, even if only after they die.

Competition does not very well describe this process.  When a species dies out, it's because it didn't serve a purpose in the ecosystem, not because other species kicked its ass.  It may look that way on the surface, and competition is definitely a component.  However, species that thrive on the basis of competition alone are not successful.  They damage the ecosystem and eventually undermine their own means of survival.

What it all amounts to, and this is very fucking important is balance and harmony.

Being based on competition, pure capitalism does not achieve any sort of balance or harmony.  People like to relate economics to natural ecosystems, but an ecosystem takes in and cycles energy through multiple sources (sunlight/minerals to plants to herbivores to carnivores and all the way back around).  In capitalism, all resources are translated into one -- money.  Thus there are no ecological niches.  Every business is a species of predators competing for the same resource, and every business must therefore out-grow their competitors or die.  You might argue that ecological niches take the form of various industries, but there's nothing stopping one company from growing into multiple industries.  If industries are analogous to ecological niches, then corporate conglomerates are super-species that grow to fill every single niche.  There is a sort of cycle in the relationship between production and consumption, but this cycle shrinks as profit-driven competition consolidates wealth into fewer hands.  It's funny how that process is still referred to as growth, right?

And the worst part is that human beings are still incapable of existing apart from nature, as much as we would like to believe otherwise.  Capitalist competition is based on "growth", but the system is not designed with any inherent limit to that growth.  However, it relies on consumption of natural resources, which does have limits.  Our way of life does not make us a "best fit" species, and we're on our way to naturally de-selecting ourselves.  There's this assumption that if we pursue competition for its own sake that somehow something desirable will be produced as an unintended side-effect, and this is absurd.  Our society needs to be based on principles squarely aimed at an ultimate goal of balance and harmony, with ourselves and with nature.

[Prometheusmfd]

I'm glad the whole "Survival of the fittest" saying is being taken to task here.  It's repeated too often by too many people as their core life philosophy, and it's an extremely damaging misunderstanding that needs to go away.

Survival of the fittest is bad language.  The phrase should actually be "Survival of the best fit".  The most successful species are those that exist in harmony with their environment, not those that dominate it by being the most badass motherfuckers around.  When most people recite "Survival of the fittest" like some divine truth, I think they're usually referring to superpredators.  Do so many people really believe that an ecological system is made up entirely of predators, or that predators are always the most successful type of species? 

Adaptive pressures in natural selection nudge species into specific ecological niches, where there is energy available that isn't being used.  If there is something in an environment that nothing eats, something will evolve the capability to eat it.  That doesn't just serve the purpose of feeding that specific species, it also serves the purpose of bringing that energy into the ecological cycle and strengthening it as a whole, because individuals of that species are still food for other species, even if only after they die.

Competition does not very well describe this process.  When a species dies out, it's because it didn't serve a purpose in the ecosystem, not because other species kicked its ass.  It may look that way on the surface, and competition is definitely a component.  However, species that thrive on the basis of competition alone are not successful.  They damage the ecosystem and eventually undermine their own means of survival.

What it all amounts to, and this is very fucking important is balance and harmony.

Being based on competition, pure capitalism does not achieve any sort of balance or harmony.  People like to relate economics to natural ecosystems, but an ecosystem takes in and cycles energy through multiple sources (sunlight/minerals to plants to herbivores to carnivores and all the way back around).  In capitalism, all resources are translated into one -- money.  Thus there are no ecological niches.  Every business is a species of predators competing for the same resource, and every business must therefore out-grow their competitors or die.  You might argue that ecological niches take the form of various industries, but there's nothing stopping one company from growing into multiple industries.  If industries are analogous to ecological niches, then corporate conglomerates are super-species that grow to fill every single niche.  There is a sort of cycle in the relationship between production and consumption, but this cycle shrinks as profit-driven competition consolidates wealth into fewer hands.  It's funny how that process is still referred to as growth, right?

And the worst part is that human beings are still incapable of existing apart from nature, as much as we would like to believe otherwise.  Capitalist competition is based on "growth", but the system is not designed with any inherent limit to that growth.  However, it relies on consumption of natural resources, which does have limits.  Our way of life does not make us a "best fit" species, and we're on our way to naturally de-selecting ourselves.  There's this assumption that if we pursue competition for its own sake that somehow something desirable will be produced as an unintended side-effect, and this is absurd.  Our society needs to be based on principles squarely aimed at an ultimate goal of balance and harmony, with ourselves and with nature.

While your argument is perfectly valid, you're forgetting that a business, like all analogous organisms, want's to keep itself alive. Logging is a good example. Putting ALL other arguments aside for now, first world logging companies replant trees after cutting them down, basically with the plan of cycling them out. This ensures future resources as long as the product is needed, whereas other companies that don't follow such procedure will eventually die out. This applies to all companies that are able to afford research of some sort or another.
And, yes, competition IS an aspect of capitalism (which I will now refer to as a free market economy, as that is what we are actually talking about, capitalism being a different but related concept), it does not make it's whole. The idea behind a free market economy is a balance between supply and demand. As demand goes down, the resources behind supply are used less, so the prices start high and naturally lower as supply builds up. In reverse, as demand goes up, supply is used as is the resource behind it, raising the prices and reducing demand. Any company worth its salt with a legitimately limited resource behind its supply (something the human race will not experience in our lifetimes, I assure you) they will do all they can to ensure that they can keep afloat. Generally, this results in finding the next suitable resource (such as nuclear power rather than fossil fuels), or remaking the resource (such as replanting trees with logging).

Now, you brought up the concept of balance and harmony, stating that any organism that can't live in such a manner with it's environment is doomed to die off. Nature has balance and harmony in the sense that it moves in cycles. This has been true for all things since whatever started this mess of a universe. Balance and harmony requires there to be no cycle, as it is a stagnation by equilibrium (a term I made up because I completely blanked on what I was going to say). Everything works in cycles, and it's just the question of whether or not we are on the upslope or the decline.

Honestly, I have yet to see a free market truly fail under its own weight. Usually, it gets bogged down by dictatorship, such as Greece or the Soviet Union. No one has argued that humans are apart from nature, but you have argued on an incomplete understanding (and I fear I've been inadequate with my explanation). You have to understand that a free market isn't inherently doomed or evil. It's how the people under it act, that is the issue! Now I fear I've become long winded, and I am tired and wish to sleep, so I bid you a good morrow.

[mainiac]

You haven't seen a free market fail under it's own weight?  Are you too young to remember 2007?

The only reason why we aren't in a great depression right now is because when the markets went into freefall the government pulled out all stops to save the economy.  If we had kept to a strictly laissez-faire attitude we'd be in another great depression right now.  The initial shock to the system in 2007 was actually a bigger part of the economy then the shock in 1929.

[Prometheusmfd]

You haven't seen a free market fail under it's own weight?  Are you too young to remember 2007?

The only reason why we aren't in a great depression right now is because when the markets went into freefall the government pulled out all stops to save the economy.  If we had kept to a strictly laissez-faire attitude we'd be in another great depression right now.  The initial shock to the system in 2007 was actually a bigger part of the economy then the shock in 1929.

Except by 2007, we had started falling into a planned economy. And it was gernment intervention that extended the depression into the 40's. It was when things were pulled back into a true free market that things recovered (though I'm less than adamant to give the credit entirely to World War II).

[MetalSlimeHunt]

Except by 2007, we had started falling into a planned economy.

What.

And it was gernment intervention that extended the depression into the 40's.

What.

It was when things were pulled back into a true free market that things recovered (though I'm less than adamant to give the credit entirely to World War II).

What.