Ayn Rand Philosophy, Objectivism, Science, Self-interest

[CoccoBill]

Free markets in a nutshell: individuals know better what's good for society than experts and collective wisdom.

[NightGizmo]

Free markets in a nutshell: individuals know better what's good for society than experts and collective wisdom.

What? You're just stating an opinion about free markets, not defining the term in any meaningful way.

[CoccoBill]

What? You're just stating an opinion about free markets, not defining the term in any meaningful way.

You may be lacking some historical context of this conversation. That is what wuf seems to claim. My personal opinion is completely and strikingly different.

[NightGizmo]

You may be lacking some historical context of this conversation. That is what wuf seems to claim. My personal opinion is completely and strikingly different.

Oops, fair enough.

[wufwugy]

Free markets in a nutshell: individuals know better what's good for society than experts and collective wisdom.

It's more like this: one of the most foundational theories of economics -- rational choice theory -- says that aggregate social behavior results from the behavior of individual actors.

From this emerges the reasoning that nobody has the level of expertise on your personal decisions like you do; therefore it is you who should make your decisions and bear the results. This same paradigm works at all levels, including families, businesses, and communities. Expertise and wisdom of crowds are of the utmost importance to society, but mandates and regulations dished out by a handful of bureaucrats to the enormous quantities of masses is not an effective way to engage them.

Keep in mind that those with expertise on economics are intense proponents of free markets, and that bureaucrats do not have enough expertise to command trillions of decisions from above.

[JKDS]

It's more like this: one of the most foundational theories of economics -- rational choice theory -- says that aggregate social behavior results from the behavior of individual actors.

What's missing from this? It can't just be individual actions determine group actions.

And, surely some regulations are of great benefit to society. I'm in no position to protect myself from fraud, for example.

[wufwugy]

I typed this at the end after having made the post, but moved it to the front:

***The final four paragraphs are probably the most important points I've made on this subject. They gets to the heart of why my position is what it is. They are textbook economics and they gets to the heart of why economists are intense proponents of free markets, why most economists favor deregulation in most ways, and why world renowned economists like Milton Friedman say things like this famous line attributed to him: "if you put the federal government in charge of the Sahara desert, in fives years there'd be a shortage of sand."

What's missing from this? It can't just be individual actions determine group actions.

Individuals act. Even large corporations are made up of the actions of each of its individuals. Economists have found no other way to mathematically represent economic behavior.

And, surely some regulations are of great benefit to society. I'm in no position to protect myself from fraud, for example.

Standards set through free markets with regards to fraud would be of even greater benefit to society. Standards set by governments regarding a large number of regulations are quite detrimental to society. The reason for this goes back to the different types of markets identified in economics. The idea that governments should set regulations necessarily means that the regulations exist in a monopolistic market, and the idea that private entities should regulate amongst themselves necessarily means that regulations exist in a monopolistic competition market.

Monopolistic market and monopolistic competition market are the technical names of the market types learned in ECON 101. Monopolistic markets benefit only a few at the expense of many by creating scarcity and increasing prices. Governments are this kind of market, and when you look at the sectors of economies that governments regulate, it makes sense that governments are indeed this kind of market since the sectors have much greater scarcity and higher prices than sectors in freer markets. Another element of monopolistic markets is that they aren't conducive to innovation; instead they're actively inhibiting of innovation. This means that once a monopolistic market is set, it tends to stay that way for a long, long time. This dynamic is evident in government regulation, as it should be since governments are monopolistic markets.

Monopolistic competition markets make up the majority of other types of sectors. Electronics, plumbing, publishing, clothing, restaurants, are just a handful of examples of monopolistic competition markets. They're "monopolistic" because their goods and services are differentiated. Of the several characteristics that describe monopolistic competition, the main element that gives it the "competition" and thus distinguishes it from monopolistic exclusively is the market has low barriers to entry and exit of producers. While entry and exit is affected by several elements, the chief determinant is regulation by governments.

The other type of market is "perfect competition." They're rare, and exist for things like wheat, where products are not differentiated. In Utopia, all goods and services would exist in perfect competition markets, but the best that modern civilization can do now (and will be able to do for probably at least a few centuries) is turn as many of its monopolistic markets into monopolistic competition markets.

[CoccoBill]

It's more like this: one of the most foundational theories of economics -- rational choice theory -- says that aggregate social behavior results from the behavior of individual actors.

From this emerges the reasoning that nobody has the level of expertise on your personal decisions like you do; therefore it is you who should make your decisions and bear the results. This same paradigm works at all levels, including families, businesses, and communities. Expertise and wisdom of crowds are of the utmost importance to society, but mandates and regulations dished out by a handful of bureaucrats to the enormous quantities of masses is not an effective way to engage them.

Keep in mind that those with expertise on economics are intense proponents of free markets, and that bureaucrats do not have enough expertise to command trillions of decisions from above.

Each individual most likely knows best what his goals are, my point is he often doesn't know how to get there. Also, I'm not convinced that setting "policies" (whether through regulations or dynamically through free markets) for each individual based on their unique preferences is better for the society as a whole than setting them with collective goals in mind. Free market may be more effective, but it doesn't ensure movement in the right direction, collectively speaking.

[wufwugy]

Each individual most likely knows best what his goals are, my point is he often doesn't know how to get there. Also, I'm not convinced that setting "policies" (whether through regulations or dynamically through free markets) for each individual based on their unique preferences is better for the society as a whole than setting them with collective goals in mind. Free market may be more effective, but it doesn't ensure movement in the right direction, collectively speaking.

Who are these angels that can ensure movement in the right direction?

[CoccoBill]

Who are these angels that can ensure movement in the right direction?

No one. Figuring out the right path and the correct steps to get there is science. I far trust the collective human knowledge and understanding here over individuals.

[wufwugy]

No one. Figuring out the right path and the correct steps to get there is science. I far trust the collective human knowledge and understanding here over individuals.

Do you find it ironic that science is fundamentally free market?

Since you do not want individuals with too much power, why do you support a system that explicitly requires a set of individuals having too much power?

Is there room for a different system, one that has demonstrated uncountable times over, that it engages human knowledge and understanding better than any others yet tried?

[CoccoBill]

Do you find it ironic that science is fundamentally free market?

Since you do not want individuals with too much power, why do you support a system that explicitly requires a set of individuals having too much power?

Science is a method, not an economic or political system, I think your analogy is misplaced.

I'm not sure I think members of government have too much power. Some exceptions may exist. No one should have too much power, but some people should have more power than others.

[Renton]

Free markets in a nutshell: individuals know better what's good for society than experts and collective wisdom.

Free markets tap the ingenuity and expertise of societies in a far more effective and efficient way than any state ever has. It doesn't take much observation of the political system to prove this; to rise in the public sector usually has very little to do with being an expert at anything other than at gaming the political system itself.

[a500lbgorilla]

Free markets tap the ingenuity and expertise of societies in a far more effective and efficient way than any state ever has. It doesn't take much observation of the political system to prove this; to rise in the public sector usually has very little to do with being an expert at anything other than at gaming the political system itself.

The brain exists in a pristine environment. If you were to skin your thumb right now, just nick off a bit deep enough, you would not gush out blood. It would pool because your circulatory system, which moves blood through your body, at the furthest reaches merely seeps it through openings into the blood-sponge of your hand. Outside of your arteries, you're a pool of blood. There's a distinct difference when it comes a certain organ - your brain. Blood does not leak from capillaries into the brain, there's a secure border called the Blood Brain Barrier that filters only select elements to enter the august space of brainmatter.

In a similar way, free markets can't exist without the blood-brain barrier of the State. While they may be most efficient at their given task, they must be supported by manifold contraptions which preserve it, and chief among them is what is called the State.