FORWARD BASE B

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There’s No Such Thing As “Free Markets”

Whenever I hear someone start to toss around phrases like “free markets” and complain about “big government” and “regulations.” I know I’m likely talking to a libertarian or neo-conservative shill making excuses for crony capitalism.  

The idea that there can be “free markets” in an anarchic capitalist society is a clever joke—a reality that dawns at some point on idealistic anarcho-libertarian undergrads that want to say they believe in something that sounds cool to say.  One day in between bong hits, it hits them—who pays taxes if no one makes them pay?  If you have no taxes how do you stop military invasion from even the most mediocre states?
Anyone pushing these ideas after age 30 are likely either fools or just sociopaths who want less rules so they can try to screw over everyone else.

Markets cannot exist without a state that uses the threat of force to guarantee property, profits, and contracts.  Thus the state has the implicit prerogative and responsibility to control the market.

Imagine what would happen to the local grocery if all police and soldiers disappeared.  The grocery would be forced to hire the local gang to defend their merchandise and before long, that gang would become the new state getting protection money(taxes) in exchange for their services.  Then, the guys with the guns, of course, get to call the shots.  

If the grocery owners hatch schemes to bleed the rest of community dry for their own benefit, the gangsters start to lose out on their neighborhood protection rackets.  The furious gangsters respond by threatening to shoot the store owners if they don’t follow certain rules.  Thus, we get regulations, which no market lacks.  The market itself is regulated into existence by the gangsters’ guns.

Even most “free market” ideologues can’t claim to believe in actual completely free market.  They usually recognize the need to prevent monopolies and try to have a “level playing field.”  But they are slippery and try to blame the centralization of wealth into monopolies on “big government” ineptitude and corruption.  In fact, power tends to centralize over time whether we speak of political bodies or business enterprises.  In real life, big, powerful government is the only thing that keeps markets competitive.

The market is one of the most powerful and flexible tools known for organizing and channeling the creative power of humanity.  Used properly, it can give rise to prosperous nations.  But it is first a tool to improve society, not an end unto itself.  Business exists to serve the people and is fundamentally subordinate to the needs of the tribe.

When businesses are allowed to do whatever they wish while enjoying the protection of armed men, the state creates and aids the growth of competitors for its power to rule.  The market is a dangerous tool that must be handled with firm discipline.  

If the gangsters grow soft, the grocery store competes with them for money that would’ve gone into taxes and eventually has its own armed men.  If the gangsters lose the ensuing struggle, the grocery store becomes the new government.  Then the grocery store has to worry about staying in power just like the gangsters did.  

The worst possible state, actually, is when the market is let to grow out of control with no responsibility for governing.  Then business, which should be enriching the neighborhood becomes like a brood of writhing tapeworms bloating the collective body even as it starves from within.

There will always be corruption and ineptitude in government so long as governments are ran by people, or even by machines programmed by people—and therefore infused with human bias. It has been argued endlessly if government is good or bad.  What cannot be debated is whether government is necessary and those who try to say otherwise in favor of business are most likely traitors.

19 responses to “There’s No Such Thing As “Free Markets”

  1. Sam J. April 2, 2017 at 7:05 pm

    You really should read some of this guy “Ha-Joon Chang”. I’ll bet if you read some of his stuff he’ll end up on your side board of Books Sources to Read. It’s not that what he’s covering is necessarily new. The Asians took American and German protectionism, combined it with a little of Deming’s quality control, mixed with State controlled banks and leavened that with a sort of bureaucratic controlled State and got …massive growth rates. The Asian growth strategy is completely unstoppable by the standard Libertarian business concerned only with profits. They also spread the profits around very much like used to happen in the 50’s and 60’s in the US.

    I used to argue in the 80’s with business students about the loss of DRAM memory manufacturing. These limited minds said if they could get it cheaper in Asian then that’s where they should get it. Never mind that when they lost DRAM soon after comes support chips and the processor itself. Soon you’re just an ad agency for the Asians. They don’t seem to comprehend how difficult it is to manufacture eve the simplest of things. Most advanced manufactured goods require decades of internal tricks and processes that are aren’t apparent to outsiders. If that wasn’t true then everyone would do it. They seem to think you can throw money at anything and it will magically appear. The F-35 is a good example of how this is not true. I also think the F-35 happens when you get a Women who used to run a bread company to run a super high tech enterprise. The fall of Hewett Packard is the same. To run a tech company you need a really smart STEM person in charge. They can learn all they need about business in a 6 week course.

    • pibcol April 3, 2017 at 7:53 am

      > They don’t seem to comprehend how difficult it is to manufacture eve the simplest of things. Most advanced manufactured goods require decades of internal tricks and processes that are aren’t apparent to outsiders. If that wasn’t true then everyone would do it. They seem to think you can throw money at anything and it will magically appear.

      We’ve lost a generation or two of on hands technical know-how due to outsourcing that will be costly to get back. Perhaps impossible. Sickenin’ to see how shortsighted our leaders were/are.

      Plus, a legion of average IQ technicians is just as vital as a standing army in war time.

      > The F-35 is a good example of how this is not true. I also think the F-35 happens when you get a Women who used to run a bread company to run a super high tech enterprise. The fall of Hewett Packard is the same. To run a tech company you need a really smart STEM person in charge. They can learn all they need about business in a 6 week course.

      Pissed off military guys with engineering backgrounds seem to get hard/impossible things done -> https://dominiccummings.wordpress.com/2017/02/14/unrecognised-simplicities-of-effective-action-2-systems-thinking-ideas-from-the-apollo-programme-for-a-systems-politics/

      • Giovanni Dannato April 3, 2017 at 11:05 am

        The market has no real direction or idea of a future. It’s great at solving problems within a pre-defined context, but if let to run rampant, all the seed corn gets eaten up to make one more buck right now.

      • pibcola April 3, 2017 at 10:55 pm

        @ Giovanni

        > The market has no real direction or idea of a future. It’s great at solving problems within a pre-defined context, but if let to run rampant, all the seed corn gets eaten up to make one more buck right now.

        Agree. The free market should be seen as a tool, not an excuse for not planning. A bad plan is better than no plan -> Kasparov

    • Giovanni Dannato April 3, 2017 at 11:38 am

      Thanks for pointing me to Joon Chang. Apparently he’s contributed to a school of ideas known as industrial policy that’s supposedly a cross between free market and planned economy. So someone actually is looking for the right balance.
      https://en.m.wikipedia.org/wiki/Industrial_policy

      Seems like this system takes into account the difficulty of developing infrastructure and expertise you and pibcol were talking about. It prescribes protectionist measures on developing industries, to be removed once it reaches maturity.
      Looks like one way or another, the myth of the hands-off state gets wiped away by reality sooner or later.

      • korezaan April 3, 2017 at 9:04 pm

        New to industrial policy? Have I got the thing for you!

        “In fact, because of the diminishing marginal utility of money, it is irrational for an economic system to rely on purely economic incentives. If all you pay people in is money, it gets awfully expensive to maintain their motivation as you go up the income scale. How much money does society have to dangle in front of a billionaire to get him to allocate another five hours a week from leisure to the work needed to run the part of the economy he owns?”

        http://www.paecon.net/PAEReview/issue23/Locke23.htm

      • Giovanni Dannato April 5, 2017 at 10:17 pm

        Mind=blown. That’s one of the best and most explanatory articles I’ve ever read. How did you happen on that old article? I’ve never bought into the anti-Japan hype and have long understood they’ll be just fine, better by far than us. They have very low birth rates, but they also didn’t import millions of foreigners, some hundreds of thousands of Koreans when they had their empire and that’s about it.
        I had already figured that the philosophies of governments such as that of Singapore will play a role in figuring out what comes next…but this…
        The more I learn, the more I see East Asian nationalism in Singapore, Taiwan, South Korea and Japan being the models to learn from. Not so optimistic on the PRC which seems to have adopted much of the West’s philosophy of capital and has many huge internal problems.
        The author even hints at the HBD side of things. The Japanese system could only work in an extremely high trust society. It would have to be implemented with a lot of changes to be viable with European stock running mixed-race empires.
        But the key concepts are gold:
        -The state keeps banks on a very tight leash and controls the capital flow to business.
        It’s hard to overstate the importance of this single concept, and why mind is blown. Aristocratic classes around the world started falling from power from the late 18th century onwards because they no longer controlled the flow of capital and got displaced by the merchant classes. This solves that problem!
        Thanks, man. Ideas from this will probably be integrated in a post at sometime fairly soon.

      • Sam J. April 7, 2017 at 9:15 am

        If you’re interested in this sort of stuff one of the Big Poohbaws of studying Japanese trade is Eamonn Fingleton. I read his book “Blindside: Why Japan Is Still on Track to Overtake the U.S.” that explains the whole system piece by piece. It didn’t exactly come out like he said but Japan has continued to dominate several areas of business. Remember they have a massive population decrease but still have huge trade surpluses. They also sell parts and equipment to China which package this stuff, embedded Japanese parts, up and sell it as Chinese. Their system can not be beat except by innovation and at the same time not letting them buy up the fruits of innovation. The Asians will completely destroy all US business if we don’t fight back their protectionism. Here’s his website. He has some of his papers linked there.

        http://www.fingleton.net/

        He also covers why a lot of publishers get Japan wrong. He’s been there for decades and most reporters only stay a few years and the Japanese for lack of a better word lie to them and tell them what they want told.

      • Sam J. April 7, 2017 at 9:38 am

        I had only read a small portion of the article before I wrote the above. After reading it all he should have labeled the whole thing a summery of ““Blindside: Why Japan Is Still on Track to Overtake the U.S.””. It’s almost word for word Fingleton’s book. I’ve also read some works by Chalmers Johnson and Robert Wade but I can’t remember what exactly. They say close to the same but Fingleton’s work is very detailed.

      • korezaan April 7, 2017 at 8:49 pm

        Got them from some guy on Facebook who doesn’t have a blog. He also unfortunately doesn’t have anything similar; it appears it interested him more because of the nationalism part and not the economics or governing structure.

        Singapore I’ve heard has similar problems to the US, where children of locals are treated as second-class citizens with respect to foreign talent, unlike JP, where you basically either have to be 1) a magnitude better than the locals *and* speak the local language, or 2) a temporary and disposable walking talking English reference curiosity for a few years. It’s also worthy to note that unlike the other three, Singapore has 3 ethnic groups: 75% Chinese, the rest split between Indians and Malays.

  2. korezaan April 3, 2017 at 8:01 am

    When I was ancap I read Molyneux’s book on how an ancap society would look, which turned out to be just a copy of Friedman’s book on the same subject, and the argument actually is just “it’ll be different because there’d be more than one entity doing what used to be the job of the state”. The proposed replacements, which are some combination of private police and insurance companies, are entirely different because their structure is based on voluntary choice and paying customers, and if you don’t like it, you can just choose not to sign up… and have absolutely all business turned away from you because that’d be in the contracts that everyone else signed. They’ll say this is perfectly okay and then turn around and say taxes are theft, force, and unacceptable.

    from https://niskanencenter.org/blog/liberal-case-nationalist-immigration-restrictions/

    “In any case, there are better ways to protect the economic well-being of poorer Americans than restricting immigration. A FREE MARKET SOLUTION TO A DROP IN WAGES or employment isn’t heavy-handed regulation of the labor market. Instead, let firms compete to figure out the most efficient ways of doing business and then directly compensate those workers who are made worse off. The compensation COULD TAKE THE FORM OF GOVERNMENT SAFETY NETS like unemployment benefits or the earned income tax credit.”

    They’re interested in only the chant of “free market” and “free choice”, and not at all in their mechanics and effects.

    They’re marketers.

    • Giovanni Dannato April 3, 2017 at 10:52 am

      Don’t know how they miss that the whole point is the state can act as one entity. That way you don’t end up with connecting railroads with different gauges, sudden changes in the roads every several miles, or a medical system that needs an army of administrators just to figure out how people and their insurance companies pay for it. Private police or military strikes us an especially ludicrous idea because the state at its most fundamental level is armed men. When illiterate Mongols from the steppe could defeat settled peoples in combat, they governed them.
      I find their mental gymnastics about the necessity of taxation through coercion—of some kind—especially specious.
      They don’t care about the poor, people who espouse these ideas are predatory.
      The phobia of “big government” has been typical “conservative” politics since Reagan and ever since more stuff gets privatized. That philosophy got its ultimate chance with George W. Bush and it crashed and burned.
      Divorced from the needs of society, private companies made bank at public expense in pointless and ruinous foreign wars. Now we even have a speaker of the house who jacks off to Ayn Rand porn while the president struggles against glorified law clerks for the privilege of having territorial borders.

      • Sam J. April 3, 2017 at 8:49 pm

        “…Private police or military strikes us an especially ludicrous idea because the state at its most fundamental level is armed men…”

        They worship rationality when intelligent people know that people aren’t really rational. Let’s take their rationality stance. Private Police and Army charge you for service. Genghis Khan comes…they run away. Rational

        “…I find their mental gymnastics about the necessity of taxation through coercion—of some kind—especially specious.
        They don’t care about the poor, people who espouse these ideas…”

        What they don’t understand is in 15 or 20 years ALL of us will be poor if we don’t take some sort of measure. Robots will do everything and there will be not much of anything left to do. AI is not coming together like predicted. It’s an assembly of specialized programs. I remember programming in DOS on 8088 processors. I’m amazed at how far things have come. You can talk to an appliance and it will give you a reasonable answer for most common questions. Those that say AI can’t happen are fools. The power doubles every two years or so and even of if it slows down there’s lots of room for growth yet. I’ve posted this link before. It’s a slideshow of a few pages by Dennis M. Bushnel about Defense and technology. Don’t miss it, it’s short and to the point but very eye opening.

        “Dennis M. Bushnell, Future Strategic Issues/Future Warfare [Circa 2025] ” he goes over the trends of technology coming up and how they may play out. Bushnell being chief scientist at NASA Langley Research Center. His report is not some wild eyed fanaticism it’s based on reasonable trends. Link.

        https://archive.org/details/FutureStrategicIssuesFutureWarfareCirca2025

        Page 70 gives the computing power trend and around 2025 we get human level computation for $1000. 2025 is bad but notice it says,”…By 2030, PC has collective computing power of a town full of human
        minds…”.

        I’m an older guy and I remember all the arguments about how computers would never understand language or be able to drive cars. Well they can. I see no reason that they can’t do more. At some point they will outclass us on every front.

        Even the smartest people on the planet are worried about this. They’re used to being the top dogs and they can see that AI will make them the intellectual equivalent of of Dogs to the AI’s.

      • Giovanni Dannato April 5, 2017 at 10:50 pm

        So would you recommend a Butlerian Jihad against the thinking machines? Having mentats would be awesome.

        Surely those figures are a bit optimistic considering PCs as far as a can tell have progressed dramatically slower since the mid 00’s or so. My laptop was bought late 2008 and it runs anything I want to so long as it’s not graphics intensive computer games.
        Not that informed on tech but from what I understand they’ve hit barriers in circuit size and levels of heat. So now they do multi-core processors, but I’m sure they’ll hit limits on that too. Beyond that, I just hear stuff about quantum computing.
        AI has definitely progressed but seems to fail to understand things toddlers would get if you depart from a few form questions.
        Computers have been superhuman at tasks like playing chess for awhile but from what I understand, they still need huge computers that can brute force the problems instead of running efficient parallel heuristics like a human would.
        I’ll start to worry when they can make self-driving cars that can reliably improvise when something unexpected happens.

      • Sam J. April 7, 2017 at 6:00 am

        “…So would you recommend a Butlerian Jihad against the thinking machines?…”
        The real problem is NO ONE knows what to do about it. Anyone who doesn’t produce the magic thinking machines will lose the economic wars but if we do produce them how long before they decide they don’t need us? You know I go on about Jews quite a bit. One the major reasons the Jews are so problematic is they seem to have little to no empathy for anyone but other Jews. What would you do with a computer that made Jews look like mentally retarded fools with NO empathy at all for humans? It’s damn frightening and it’s coming real soon.
        The reason that computers don’t seem to be getting much faster is partly they aren’t getting faster quite as quick but also software that uses this sort of power is not moving near as fast. If you look at high end software it’s not the same. They can use all the power they can get. Also computing centers like Amazon can use this stuff easily as the stuff like Alexa shows. I mean my God Alexa can answer most any technical question you ask it. Except it has trouble with questions involving morality or empathy. Oops!
        There’s plenty of room for more computing advances. Lots. A simple Heat Pipe would cure the heat problems. They’re also going to start stacking support chips and memory on one big chip. Interconnections are a major problem as they slow everything down and are causing bottlenecks so they will just pack everything on one chip. Intel already doing this.
        “…mentats…”
        When I found the Dune book I read the first three books in three days. Super enthused and I’ve read probably everything written by Herbert. In Jerry Pournelle and Larry Nivens known space universe series of books AI’s don’t last because they go crazy. I suspect we won’t be that lucky. If you haven’t heard of this you would surely like it. Try Ringworld by Larry Niven. All the Kzin books are good too. All the known space novels are great.
        https://en.wikipedia.org/wiki/Kzin
        https://en.wikipedia.org/wiki/Known_Space

    • Sam J. April 5, 2017 at 8:41 am

      “…The compensation COULD TAKE THE FORM OF GOVERNMENT SAFETY NETS like… the earned income tax credit.”…”

      HAHAHAHA Earned income tax credit for people with no income! Great.

      • Sam J. April 7, 2017 at 9:41 am

        I made fun of your argument before I really understood where you were going with it. Now that I’ve reread it I must apologize. In context it makes sense to me.

        Oops. Sorry.

    • Sam J. April 8, 2017 at 11:01 pm

      California used to have their own public power system. It was very well run and also very long sighted. They sold it all off and…power shortages where they rape the taxpayer. Higher prices less service.

      Government systems may not be quite as efficient as private but private systems goals are not in line with the public. Public systems goals are “supposedly” in line with helping the public. If you lose a little on efficiency with the public you gain it back with goals not to sap the public with as many fees as possible and siphon off as much profit as possible.

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