Questions for capitalists.
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26-10-2013, 05:06 PM (This post was last modified: 26-10-2013 05:20 PM by frankksj.)
RE: Questions for capitalists.
@earmuffs,

Quote:The problem is that a system of “only pass good regulation” doesn't work because ALL regulation is considered “good” at the time, or else it wouldn't get passed.
Quote:Of course everything "seems good at the time".... When I say good regulation I'm referring to regulation I would consider to be good.

So let's assume that you are an omnipotent super-human who never makes mistakes and the people of NZ unanimously agree that the way to prevent bad regulation is to run every proposal by @earmuffs first to if you “consider it to be good.” This may solve the problem of NZ having bad regulation in the future, but surely you agree that this wouldn't have prevent NZ from passing all that bad regulation in the mid 20th century that held the economy back for so long since you were born in '91. Therefore, when you're not there to make those decisions, there has to be a way for an elected group of representatives to make those decisions. So how to prevent them from making decisions about what should be regulated vs. what should be left to the free market? As we agreed, in NZ's past, before they had you, the politicians made terrible decisions and decided everything should be regulated. How could that have been prevented?

The classic liberal solution is to have NO regulation done at the national level, and vest all the power at the state/local level. That doesn't solve the problem of politicians making bad decisions. No doubt local politicians would have made similar bad decisions to regulate anything and everything. But at least it minimizes the harm because, in the case of NZ, all the entrepreneurs would have simply relocated and left behind those areas where innovation was stifled and over-regulated, and the free market states could have then been economic powerhouses, pressuring the over-regulated states to change their ways.

I understand you don't favor this solution, so do have a proposed solution that doesn't rely on you being present to make decisions for the nation? Smile
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26-10-2013, 05:20 PM
RE: Questions for capitalists.
@Chas,

Quote:I believe it's possible to do a better job of achieving all the good things you described with voluntary solutions, and that the people will be happier since everybody prefers to do something voluntarily because it's a win-win, than to do something because somebody's holding a gun to their head.
Quote:That won't work. Non-compliers will always have the advantage.... voluntary compliance is problematic; if costly, people won't do it.

At least we agree on the issue at hand, namely if we should look for peaceful voluntary solutions, or if we start with your assumption that voluntary solutions “won't work” and focus only on solutions that involve the use of force.

Since I always answer your questions, I will ask you the same question I asked @earmuffs. As you know, Hong Kong practiced unregulated (ie voluntary solutions) during their experiment in laissez-faire capitalism.

Q: What specifically were the problems that Hong Kong suffered, since you believe this system “won't work”, which the US and Canada were spared thanks to our regulation?

Also, remember that although I prefer to let everyone exercise their free will, I understand it will never happen because you liberals are so strongly opposed to that. Therefore, my compromise is to have regulation done at the state, rather than Federal level.

Q: Besides pollution of shared resources that cross between states (air and water), what are the regulations which the US has passed at the federal level that, in your opinion, would have led to problems if they were done at the state level?

Q: Do you concede that even well-intentioned politicians often make bad decisions and pass bad regulation (like ordering the dismantling of the US's public transport system in the 1920's)? If so, what solution do you propose to prevent that or to limit the damage?

Now to answer your question:
Quote:What is the difference between legislation and regulation in practice?
Is there some magic line of demarcation?
I don't see a difference. IMO they're pretty much the same thing. But remember, what IS a clear demarcation is if the jurisdiction of the law/regulation is at the state level, or the federal level. I believe our founders were right that even laws that are universally considered appropriate, such as laws against rape, murder, fraud, etc., should be handled by the states—not the Federal government—because it's impossible to have a clear demarcation between 'good' and 'bad' laws, and if you let the Federal government pass laws and regulations, telling them to only pass “good ones” (like murder and fraud) is useless since they always think they're ALL good or they wouldn't pass them. Therefore, to me it's inevitable that regulators will sometimes make mistakes and my focus is on how to contain the damage caused (ie limit the jurisdiction to the state level and give people the choice of picking the jurisdiction they want to live under).
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26-10-2013, 05:35 PM
RE: Questions for capitalists.
(26-10-2013 05:20 PM)frankksj Wrote:  @Chas,

Quote:I believe it's possible to do a better job of achieving all the good things you described with voluntary solutions, and that the people will be happier since everybody prefers to do something voluntarily because it's a win-win, than to do something because somebody's holding a gun to their head.

At least we agree on the issue at hand, namely if we should look for peaceful voluntary solutions, or if we start with your assumption that voluntary solutions “won't work” and focus only on solutions that involve the use of force.

Since I always answer your questions, I will ask you the same question I asked @earmuffs. As you know, Hong Kong practiced unregulated (ie voluntary solutions) during their experiment in laissez-faire capitalism.

Q: What specifically were the problems that Hong Kong suffered, since you believe this system “won't work”, which the US and Canada were spared thanks to our regulation?

Also, remember that although I prefer to let everyone exercise their free will, I understand it will never happen because you liberals are so strongly opposed to that. Therefore, my compromise is to have regulation done at the state, rather than Federal level.

Q: Besides pollution of shared resources that cross between states (air and water), what are the regulations which the US has passed at the federal level that, in your opinion, would have led to problems if they were done at the state level?

Q: Do you concede that even well-intentioned politicians often make bad decisions and pass bad regulation (like ordering the dismantling of the US's public transport system in the 1920's)? If so, what solution do you propose to prevent that or to limit the damage?

Now to answer your question:
Quote:What is the difference between legislation and regulation in practice?
Is there some magic line of demarcation?
I don't see a difference. IMO they're pretty much the same thing. But remember, what IS a clear demarcation is if the jurisdiction of the law/regulation is at the state level, or the federal level. I believe our founders were right that even laws that are universally considered appropriate, such as laws against rape, murder, fraud, etc., should be handled by the states—not the Federal government—because it's impossible to have a clear demarcation between 'good' and 'bad' laws, and if you let the Federal government pass laws and regulations, telling them to only pass “good ones” (like murder and fraud) is useless since they always think they're ALL good or they wouldn't pass them. Therefore, to me it's inevitable that regulators will sometimes make mistakes and my focus is on how to contain the damage caused (ie limit the jurisdiction to the state level and give people the choice of picking the jurisdiction they want to live under).

I do not know enough about Hong Kong to have a useful discussion.

I am not interested in your federal/state debate.

Thank you for answering the question on legislation/regulation.

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26-10-2013, 08:17 PM
RE: Questions for capitalists.
(26-10-2013 04:23 PM)Chas Wrote:  
(26-10-2013 09:50 AM)frankksj Wrote:  Therefore, my question would be, can the “good” things be accomplished some other way, so we only get the “good” without the “bad”? Is there a mechanism to accomplish the same things voluntarily instead of with the use of force (regulation)?

I believe it's possible to do a better job of achieving all the good things you described with voluntary solutions, and that the people will be happier since everybody prefers to do something voluntarily because it's a win-win, than to do something because somebody's holding a gun to their head.

That won't work. Non-compliers will always have the advantage.

Quote:You don't need regulation for this. Even in the most libertarian, laissez-faire system, fraud is a crime, and the courts must punish people for intentionally misrepresenting something. Enforcing fraud is, imo, much more effective than passing regulation because it protects consumers in all circumstances. If you rely on regulation, such that products sold as apples must not be sold as oranges, then consumers can still get screwed by pears sold as oranges. A system that enforces fraud catches all circumstances.

What is the difference between legislation and regulation in practice?
Is there some magic line of demarcation?

Rules are rules, enforcement is enforcement.

Quote:Bottom line, I agree regulation can do good in some cases. But I feel it causes a lot more bad, and that the good can be achieved without regulation.

You may feel that, but experience shows that voluntary compliance is problematic; if costly, people won't do it.

Obviously didn't read my post.
Typical Chas. Tongue


Quote:So let's assume that you are an omnipotent super-human who never makes mistakes and the people of NZ unanimously agree that the way to prevent bad regulation is to run every proposal by @earmuffs first to if you “consider it to be good.” This may solve the problem of NZ having bad regulation in the future, but surely you agree that this wouldn't have prevent NZ from passing all that bad regulation in the mid 20th century that held the economy back for so long since you were born in '91.

I would be all for this. Though it's not doable because my time is limited and this country couldn't afford my services.
National, the current party in power, IMO is doing a reasonable job of it it currently actually. There are some things I would disagree on but you can't win em all.

Quote:Therefore, when you're not there to make those decisions, there has to be a way for an elected group of representatives to make those decisions. So how to prevent them from making decisions about what should be regulated vs. what should be left to the free market? As we agreed, in NZ's past, before they had you, the politicians made terrible decisions and decided everything should be regulated.

That was back than. This is now. The government is much wiser now and globalization has become a far far bigger player in the economy. We understand efficiency and that we should really just leave car manufacturing to the Japanese.
Even the Labor party isn't like what it use to be like pre-87.
Regulation today is very minimal and not as direct.

Quote: How could that have been prevented?

It wont go back to pre-87 times because that would set the economy back hugely.

Quote:The classic liberal solution is to have NO regulation done at the national level, and vest all the power at the state/local level.

NZ is 4million people, we hardly have a state and federal level..
And I actually think it would do more harm if we gave power to local authority. I think local authority would be more inclined to side with the worker and thus increase regulation.
A problem we have is that the center-right is the majority in this country, but the far left is the loudest. They're the ones out of the streets protesting, on the steps of parliament whatever. You never seen a bunch of Nationalists (in regards to those that vote National) protesting anything. But idiots who vote Labor will protest everything.

Quote: That doesn't solve the problem of politicians making bad decisions.

No it doesn't. You can't really solve the problem unless you adapt something like China or Singapore where the country is effectively run like a business by economists or engineers or whatever, not politicians.

Quote: But at least it minimizes the harm because, in the case of NZ, all the entrepreneurs would have simply relocated and left behind those areas where innovation was stifled and over-regulated, and the free market states could have then been economic powerhouses, pressuring the over-regulated states to change their ways.

But it doesn't work that way here. Almost everything is in Auckland. And there's a lot of Maori and poor folk in Auckland who traditionally vote Labor. Even down here in Wellington, the capital, Wellington is almost always a Labor voting city.
The people who vote National are in the minority in the cities. They're by far the majority in the country side and smaller towns and cities however due to farming.

Quote:I understand you don't favor this solution, so do have a proposed solution that doesn't rely on you being present to make decisions for the nation? Smile

I think the current system works fine. I mean obviously in an ideal world the country would run like Singapore where in it's viewed almost like a business.
Or like China where engineers and economists run the country.
But we live in a democracy and so with that comes things like the Labor party who favor workers rights over business and the economy. I gotta accept that National wont be in power forever and the people of this country will eventually vote in Labor again. I'd rather live with the power to choice who (and thus how) the country is run than not have that power. Even if the idiot poor people win out sometimes.

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26-10-2013, 09:15 PM
RE: Questions for capitalists.
@earmuffs, thank you for a productive debate.

Quote:It wont go back to pre-87 times [and heavy regulation] because that would set the economy back hugely.

I hope you're right. But I think history will tell you otherwise. 50 years in the future the people of NZ will have forgotten about how bad the pre-87 regulation was. As you said, the far left will be very vocal that whatever problems NZ is having 50 years from now, it's because there's no heavy regulation.

And as people become successful, they become complacent and disengaged. Remember the US had an unregulated economy from the 18th century until the 1920's. The transformation was incredible. We went from subsistence farming to having modern medicine, science, an industrial revolution and countless millions of people flocked here from all over the world to pursue a better life. But people forget the history. In the 1920's they did the exact opposite of what made them successful in the past. Government took over all sorts of industries, with disastrous results. Ask the American man on the street why the US is so far behind the rest of the developed world in public transport, and I can guarantee you that virtually everybody (except the handful of classic liberals) will say the problem is the government didn't get involved enough. Everybody forgets that we led the world in public transportation UNTIL the government took over. People forget history. And people also aren't willing to acknowledge when they're views caused the problems—today, when talking about our dependency on oil and lack of public transport, you won't ever find liberals who fess up and say “Yeap, we did that.”

Thus, your optimism that NZ learned its lesson and even 100 years from now will remember it and won't go back is, imo, naïve. I think that now, while the lesson is fresh in people's minds, you need to put in place a system to prevent repeating the same mistakes again.

Quote:NZ is 4million people, we hardly have a state and federal level..

The most strictly federalist government today is Switzerland—population 7 million, with the government power dispersed among 26 cantons (States). And, this system works just as well for them as it did for the US until it was abandoned in the 1920's. The Swiss today are highest in terms of household wealth (the average Swiss household has $700,000 in savings), and are among the top in terms of life expectancy, low crime, standard of living, and happiest citizens. A federalist system scales very well to both small and large countries imo.

Quote:And I actually think it would do more harm if we gave power to local authority. I think local authority would be more inclined to side with the worker and thus increase regulation.

Well keep in mind that if you're right, and if >50% of the local authorities think like that, then it's inevitable they WILL get the regulation passed at the national level anyway, and you'll be screwed. However, in a Federalist system, even if 70% of the local authorities do crazy shit, there's always a few authorities that do a better job and people start moving there, which forces the crazy places to shape up.

Quote:[A federalist system] doesn't work that way here. Almost everything is in Auckland. And there's a lot of Maori and poor folk in Auckland who traditionally vote Labor.

Then you have state lines run through Auckland so that it's split into autonomous areas. Then North Auckland would be competing with South Auckland to provide the best live+work environment, and if the South Aucklanders passed laws that ruined their lives, you'd get blight and decay in the South as the people moved to north Auckland, forcing the Southerners to fix it. Small governments are so much more efficient, I'm always in favor of keeping it as small as possible. In Switzerland the average population of an autonomous region (ie canton/state) is 269,000, and they run SOOOO much more efficiently than bigger regions. Look at how much those small governments accomplish with so little tax revenue. It's considered a 'tax haven', yet they're able to provide for everyone so nobody is poor or hungry, everybody gets a great education, and the public infrastructure is the best I've seen in the world (and I've been to over 50 countries).

Quote:I think the current system works fine... But we live in a democracy and so with that comes things like the Labor party who favor workers rights over business and the economy. I gotta accept that National wont be in power forever and the people of this country will eventually vote in Labor again. I'd rather live with the power to choice who (and thus how) the country is run than not have that power. Even if the idiot poor people win out sometimes.

First, if you have power at the local level, you actually have MORE power to choose how things are run. If are voting in a jurisdiction with only 200,000 people, your vote has 20 times the weight it does in a national vote among 4 million. And you can choose to live in an area where people think like you so that it becomes much easier to get the 51% majority that is needed. At the national level, it's winner takes all, and if the winner is the 'idiots', then you lose. It's easy for you to say it's working now while NZ is doing fairly well. I'll bet that someday when the 'idiots' get back in power and destroy the economy and you're out of work and struggling, you'll probably wish the government had implemented a system to contain the 'idiots' and limit the damage, and that you had the ability to relocate to another area to escape their devastation.
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26-10-2013, 09:16 PM
RE: Questions for capitalists.
P.S. Do agree with Milton Friedman that government regulation creates, rather than prevents, monopolies? Can you find any examples of monopolies, besides DeBeers, that got to be monopolies without government privilege?
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31-10-2013, 01:06 PM
RE: Questions for capitalists.
(26-10-2013 09:16 PM)frankksj Wrote:  P.S. Do agree with Milton Friedman that government regulation creates, rather than prevents, monopolies? Can you find any examples of monopolies, besides DeBeers, that got to be monopolies without government privilege?

Standard Oil quickly comes to mind. They rose to prominence without direct govenment aid prior to their breakup. Actually they were the opposite of protection by regulation in that their collusion with the steel and railroad industries gave them an unfair advantage.

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31-10-2013, 06:31 PM
RE: Questions for capitalists.
Competition itself hinders and eliminates other capitalists, this is why wealth and power always gravitates to the already large wealthy and powerful. There are rare exceptions but in comparison, the exceptions are very few, very unlikely and are not common under capitalism.

Who or what is going to protect capitalism from itself?
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31-10-2013, 07:07 PM
RE: Questions for capitalists.
(31-10-2013 01:06 PM)Carlo_The_Bugsmasher_Driver Wrote:  
(26-10-2013 09:16 PM)frankksj Wrote:  P.S. Do agree with Milton Friedman that government regulation creates, rather than prevents, monopolies? Can you find any examples of monopolies, besides DeBeers, that got to be monopolies without government privilege?

Standard Oil quickly comes to mind. They rose to prominence without direct govenment aid prior to their breakup. Actually they were the opposite of protection by regulation in that their collusion with the steel and railroad industries gave them an unfair advantage.

I beg to differ. Refined oil prices fell from over 30 cents per gallon in 1869, to 10 cents in 1874, to 8 cents in 1885, and to 5.9 cents in 1897 as Standard Oil kept driving down prices by being pioneering radical new techniques to improve efficiency, and inventing a lot of new ways to make money from oil, such as making a profit from the waste with Vaseline, instead of dumping the waste into the rivers. The reason Rockefeller eventually got to 90% market share was by continuously staying one step ahead of everyone else and driving prices way down. This was a HUGE benefit to the consumer. And clearly he did NOT have a monopoly and faced heavy competition, if he did, then why did he keep lowering the price? Why didn't he keep it at 30 cents/gallon if he had no competition? The fact is he DID have a lot of competition, and got a huge market share by staying one step ahead.

I don't think this is disputed by any serious economist, that Standard Oil faced fierce competition until around 1900. Now, AFTER 1900 Standard Oil DID shift tactics and begin predatory pricing and all sorts of other dirty tricks. But the question to ask yourself is how did he get away with it? Once he pioneered all these new innovations, like selling the waste instead of paying to dispose of it, why didn't all those competitors keep nipping at his heels? That is clear: GOVERNMENT ISSUED PATENTS. He got the courts to enforce his patents and drive out his competitors. It was only once he had the government protecting him and forcing out the competition that he had a real monopoly, without competition, and could price gouge.

So, Standard Oil DOES fall into the category of a monopoly that was obtained with the help of the government. If the government hadn't driven out his competitors, they'd have kept taking his innovations and building on them forcing him to keep playing leap frog, which is the whole point of capitalism. It was government interference in the free market system that drove this to a halt and gave him a monopoly.
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31-10-2013, 08:26 PM
RE: Questions for capitalists.
Quote:I don't think this is disputed by any serious economist, that Standard Oil faced fierce competition until around 1900. Now, AFTER 1900 Standard Oil DID shift tactics and begin predatory pricing and all sorts of other dirty tricks. But the question to ask yourself is how did he get away with it? Once he pioneered all these new innovations, like selling the waste instead of paying to dispose of it, why didn't all those competitors keep nipping at his heels? That is clear: GOVERNMENT ISSUED PATENTS. He got the courts to enforce his patents and drive out his competitors. It was only once he had the government protecting him and forcing out the competition that he had a real monopoly, without competition, and could price gouge.

No, Standard Oil beat its competitors via economy of scale. In addition, they received preferential treatment by the railroads and steel, which a
allowed them to ship their products not to mention have access to resources and business at an unfair advantage. Basically, it's a scaled up form of the end of a game of monopoly: if you control 90% of the resources, capital, and property, then you can crush out your competition, no matter how innovative their product is. The state of Ohio recognized this and successfully sued Standard Oil in the 1890's because they controlled over 80% of the oil production at that time. Now post 1900, when Standard Oil was finally forced by the Government to play fair, competition really was allowed to work and decreased their market share by approx 30% prior to its final breakup.

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