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Libertarian Thread # 3: Liberty will never die

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Negoba View Drop Down
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Post Options Post Options   Quote Negoba Quote  Post ReplyReply Direct Link To This Post Topic: Libertarian Thread # 3: Liberty will never die
    Posted: May 10 2012 at 14:51
The abuse of Federal Aid programs is well discussed at least and I assumed well documented in a more formal way. But like all cash cows, folks are going to expend energy to maintain the revenue stream.
 
I am not a fan of the same money / medium of exchange being used to help us take care of basic human needs like education and medicine and also being available in more abstract markets. It makes it impossible for more bottom-up organic system dynamics to prevail.
 
But I digress into my usual silliness.
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Post Options Post Options   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: May 10 2012 at 14:58
Originally posted by Equality 7-2521

^There's jobs for these people in the trades. Some of them are just dying for workers. Some developing regions in the US in particular are paying huge salaries for these types of workers (North Dakota being one for example).

I don't think there's any doubt that Federal aid programs have driven the price of higher ed sky high.


Well there ya go.

I'd agree, it makes economic sense (doesn't a subsidy always increase price for the whole?) but no research I found can concretely support it (at least among public universities), so I guess it's just us crazies making assumptions based on guesses and not reality eh?




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Post Options Post Options   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: May 10 2012 at 15:13
Originally posted by JJLehto

Originally posted by Equality 7-2521

^There's jobs for these people in the trades. Some of them are just dying for workers. Some developing regions in the US in particular are paying huge salaries for these types of workers (North Dakota being one for example).

I don't think there's any doubt that Federal aid programs have driven the price of higher ed sky high.


Well there ya go.

I'd agree, it makes economic sense (doesn't a subsidy always increase price for the whole?) but no research I found can concretely support it (at least among public universities), so I guess it's just us crazies making assumptions based on guesses and not reality eh?


If it doesn't happen, then I think some basic economic principles are failing. The subsidy allows marginal users to enter the market. Thus we have an increase in demand for the product. Furthermore, given the medium through which you pay and the societal pressure to go to college, consumers already have a small elasticity. Basic economic theory calls for a price increase.
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Post Options Post Options   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: May 10 2012 at 15:15
Originally posted by Negoba


 
I am not a fan of the same money / medium of exchange being used to help us take care of basic human needs like education and medicine and also being available in more abstract markets.


Why does that affect anything may I ask?
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Post Options Post Options   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: May 10 2012 at 15:23
Well exactly, that's what is frightening to me!
It's tough to find a conclusive answer out there, even though basic economics says it should be happening.
I learned that at college too, so not even these "Austrian lie machines that enslave our minds"LOL

I guess I just can't believe it's not realized, not accepted, or not spoken about out there.
Except among those crazies like Ron Paul of course!
Thus dismissed as horse hockey :(





Edited by JJLehto - May 10 2012 at 15:25
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Post Options Post Options   Quote Negoba Quote  Post ReplyReply Direct Link To This Post Posted: May 10 2012 at 15:25
Because the individual agent no longer knows what he's actually exchanging. And different people are trading something that has vastly different meanings to different agents.
 
i.e. The vast majority of the populace (including me) have little understanding what a dollar really is. My best guess is that it is a promise between members of society to honor that this idea can be exchanged for things of value. Yet that promise gets abused and manipulated to the point that it is a dishonest way to mediate the allocation of goods.
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Post Options Post Options   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: May 10 2012 at 15:26
@ Brian
There's a tend in popular politics that focuses only on the benefits of an action while ignoring the costs. Politicians operate with a "Is it good?" mindset while everyone else in the world must operate with a "Is it good relative to the cost." mindset.

On my way out the door so I'll read your post later Negoba.


Edited by Equality 7-2521 - May 10 2012 at 15:26
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Post Options Post Options   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: May 10 2012 at 15:26
That's pretty much right Negoba, just seems it's a little dense for the topic.
I could be dumb though
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Post Options Post Options   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: May 10 2012 at 19:17
Originally posted by Negoba

Because the individual agent no longer knows what he's actually exchanging. And different people are trading something that has vastly different meanings to different agents.
 
i.e. The vast majority of the populace (including me) have little understanding what a dollar really is. My best guess is that it is a promise between members of society to honor that this idea can be exchanged for things of value. Yet that promise gets abused and manipulated to the point that it is a dishonest way to mediate the allocation of goods.


Yeah I think the benefits and unavailability of a medium exchange kind of outweighs that though.

A dollar isn't that mysterious. It's something people will accept in trade. You can't make everything you want feasibly, so you do one activity and receive a good in return for it that everyone will take. I think people get that without ever thinking about the situation.
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Post Options Post Options   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: May 10 2012 at 22:19
I try not to repost too much stuff, but I really enjoyed this. It's a Lew Rockwell podcast about free market healthcare with a surgery center currently operating in that fashion.

The Podcast


It's about 22 minutes if I recall.
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Post Options Post Options   Quote Negoba Quote  Post ReplyReply Direct Link To This Post Posted: May 11 2012 at 08:36
Originally posted by Equality 7-2521


Yeah I think the benefits and unavailability of a medium exchange kind of outweighs that though.

A dollar isn't that mysterious. It's something people will accept in trade. You can't make everything you want feasibly, so you do one activity and receive a good in return for it that everyone will take. I think people get that without ever thinking about the situation.
 
I'm not saying that we abandon money completely, just that we need a more diversified way to exchange goods.
 
A dollar is illusory in terms of what it really represents. It's an assumption that I can hold raw value and use it to leverage something later. What it's value is extremely slippery, despite the tacit assumption that a dollar = a dollar = a dollar.
 
The fact that a car depreciates 20% the moment you drive it off the lot tells you something about value. The fact that economies of scale change the cost of items, the contractual price alterations that are abundant in business. All of these are expressions of the fact that people will try to manipulate the exchange and the dollar only partially standardizes this.
 
I'm still wrapping my brain around this but recent reading about the definition of credit, interest, backed vs. non-backed currency, etc. has made me realize even more than before that money is a social contract, and that most of us only understand the most basic of the rules. A contract isn't really a contract without both parties knowing their obligations and what is obliged to them. Therefore, money as it now exists is a flawed institution.
 
 
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Post Options Post Options   Quote Negoba Quote  Post ReplyReply Direct Link To This Post Posted: May 11 2012 at 09:30
Originally posted by Equality 7-2521

I try not to repost too much stuff, but I really enjoyed this. It's a Lew Rockwell podcast about free market healthcare with a surgery center currently operating in that fashion.

The Podcast


It's about 22 minutes if I recall.
 
This is very useful information for me. I want to start with that.
 
Price transparency being the keystone of the system is very very powerful. I applaud this as an absolute foundation of meaningful health care reform. It was extremely good to see this in action and working.
 
The politics of both the anesthesiologist and the host are sadly over the top. But just as I read alot of hippy-dippy economics and have to sift some of their BS to get to the good information, here I can also sift because this project is great and I applaud it. I don't believe it is a model of what the endpoint will be, but it is absolutely one of the experiments that will shift things in the right direction. And best of all it is a bottom-up solution.
 
I could point out the problems with the model but that's not necessary.
 
 
 
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Post Options Post Options   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: May 11 2012 at 10:13
Originally posted by Negoba

I'm not saying that we abandon money completely, just that we need a more diversified way to exchange goods.
 
A dollar is illusory in terms of what it really represents. It's an assumption that I can hold raw value and use it to leverage something later. What it's value is extremely slippery, despite the tacit assumption that a dollar = a dollar = a dollar.
 
The fact that a car depreciates 20% the moment you drive it off the lot tells you something about value. The fact that economies of scale change the cost of items, the contractual price alterations that are abundant in business. All of these are expressions of the fact that people will try to manipulate the exchange and the dollar only partially standardizes this.
 
I'm still wrapping my brain around this but recent reading about the definition of credit, interest, backed vs. non-backed currency, etc. has made me realize even more than before that money is a social contract, and that most of us only understand the most basic of the rules. A contract isn't really a contract without both parties knowing their obligations and what is obliged to them. Therefore, money as it now exists is a flawed institution.
 


I think you're mixing together some issues which are really different here.

Diversified currencies exist. They just tend to be more inefficient as the diversity increases so that a common exchange medium emerges in most situations. Unless I'm misunderstanding you, you suggest a type of system where laborers exchange their product for a sort of luxury money and a necessity money which do not cross boundaries. This just would not work for many reasons. I'll go into all of them, but I want to make sure you're actually suggesting this first.

You start talking about the manipulation of the value of a good. This can only be done in a nominal sense. One can manipulate how much of a particular currency another would be willing to pay for a good. But the overall value of the good exists only as an amalgamation of individual subjective evaluations. As such, this cannot be change or altered by anybody. Difference in value, like a car losing 20% of its value, exist because the mass of people value a car 20% less after it has been driven off the lot. People feel this way. They express this feeling through their purchasing. Cars don't lose 20% of their dollar value from this, they lose 20% of true value reflected in a dollar price or the price of any other exchange medium be it direct or indirect.

There's nothing mysterious about a hard currency ignoring volatile fluctuations in the rate of production. It's really just as simple as it seems. I don't see what people have to understand about it that they already don't. It just gives a common denominator for a "wants profile". Rather than accepting a job that offers them 3 meals, 1/8 of a mortgage payment, and 1/3 of a car payment per day of work, they accept a job based on a certain dollar amount which they can then use to calculate their return among a near infinite basket of possible goods. Fiat currencies get a little more mysterious, and I can agree that people don't fully understand what these actually represent in the abstract. However, the result of this ignorance doesn't tend to manifest itself on the scale of daily transactions among most people.
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Post Options Post Options   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: May 11 2012 at 10:14
Originally posted by Negoba

 
The politics of both the anesthesiologist and the host are sadly over the top.
 


Well it's a political and not a scientific or economic podcast. It's made for anarchists.
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Post Options Post Options   Quote Negoba Quote  Post ReplyReply Direct Link To This Post Posted: May 11 2012 at 10:40
Originally posted by Equality 7-2521

Originally posted by Negoba

 
The politics of both the anesthesiologist and the host are sadly over the top.
 


Well it's a political and not a scientific or economic podcast. It's made for anarchists.
 
Fair enough.
 
I just hope the model gets more footing in other markets. Talking about "personal property rights" and treating the free market as a panacea were turn-offs for me and I assume would also turn some others off.
 
Right now, there is a phenomenon called concierge medicine using some of these principles but as the name implies it's only viable to those with significant resources.
 
I feel very strong that these alternative systems need to get a chance find their niche in the medical system. You don't need ideology (especially quite that strong) for that to happen.
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Post Options Post Options   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: May 11 2012 at 10:46
Yeah I'll listen to it later when I'm back home, but what I've seen from Lew Rockwell tends to border on the anarchist side.

Von Mises also seems a bit out there for me (generally they make good stuff of course).
I like the Cato institute.

Also if it has anything to do with what you guys are talking about I may have to just keep the burden away from my brain.
I have GY!BE tickets to buy anyway.
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Post Options Post Options   Quote Negoba Quote  Post ReplyReply Direct Link To This Post Posted: May 11 2012 at 11:04
Originally posted by Equality 7-2521


I think you're mixing together some issues which are really different here. Likely so, I'm still trying to wrap my brain around this all.

Diversified currencies exist. They just tend to be more inefficient as the diversity increases so that a common exchange medium emerges in most situations. True, hence the failure of many attempts at local currencies.
 
Unless I'm misunderstanding you, you suggest a type of system where laborers exchange their product for a sort of luxury money and a necessity money which do not cross boundaries. This just would not work for many reasons. I'll go into all of them, but I want to make sure you're actually suggesting this first. I'm not really suggesting anything yet. I'm just trying to figure out how to deal with the fact that the dynamics of the stuff banks and investors swap around is really quite different than the stuff you and I use to buy a candy bar one day and sell a bird house I made the next.

You start talking about the manipulation of the value of a good. This can only be done in a nominal sense. One can manipulate how much of a particular currency another would be willing to pay for a good. But the overall value of the good exists only as an amalgamation of individual subjective evaluations. As such, this cannot be change or altered by anybody. Difference in value, like a car losing 20% of its value, exist because the mass of people value a car 20% less after it has been driven off the lot. People feel this way. They express this feeling through their purchasing. Cars don't lose 20% of their dollar value from this, they lose 20% of true value reflected in a dollar price or the price of any other exchange medium be it direct or indirect. This is a leap of faith. This is how the free market is supposed to work. The free market ideal assumes a continuous bottom-up fluidity that only deals with a part of the actual dynamics of how the economy works. Inertia and top-down imposition of boundary conditions are strongly at play. Government is one of these top-down agents but not the only one. This is one of the fundamental flaws in the libertarian position. You cannot eliminate top-down dynamics entirely, especially if you don't correctly name all of the actors.

There's nothing mysterious about a hard currency ignoring volatile fluctuations in the rate of production. It's really just as simple as it seems. I don't see what people have to understand about it that they already don't. It just gives a common denominator for a "wants profile". Rather than accepting a job that offers them 3 meals, 1/8 of a mortgage payment, and 1/3 of a car payment per day of work, they accept a job based on a certain dollar amount which they can then use to calculate their return among a near infinite basket of possible goods. Fiat currencies get a little more mysterious, and I can agree that people don't fully understand what these actually represent in the abstract. However, the result of this ignorance doesn't tend to manifest itself on the scale of daily transactions among most people. There have been some good demonstrations that hard and fiat currencies really don't differ in the end. Gold buried in the ground has absolutely no economic value. Whatever is actually part of the percieved value in ongoing transactions is what matters. As you mentioned in price and value, the only thing really governing exchanges is the perceptions of the actors involved. Money works because you and I believe in it. The moment you think gold has the same value as granite and I think gold has more value, our hard medium of exchange becomes useless.
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Post Options Post Options   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: May 11 2012 at 12:20
Originally posted by Negoba

This is a leap of faith. This is how the free market is supposed to work. The free market ideal assumes a continuous bottom-up fluidity that only deals with a part of the actual dynamics of how the economy works. Inertia and top-down imposition of boundary conditions are strongly at play. Government is one of these top-down agents but not the only one. This is one of the fundamental flaws in the libertarian position. You cannot eliminate top-down dynamics entirely, especially if you don't correctly name all of the actors.


I really must disagree with this. Sure it's an assumption, but an assumption will be made by school of economic thought. It's not exactly an unfounded assumption though. It doesn't assume any idea situation; it actually operates on the lack of an ideal situation. Methodologically, the inability to compare utility functions leads to a coresponding inability to measure value except by the actions ones takes to place goods in a hierarchical ordering via a medium of exchange. Other models tend to deal in abstract ideals of true value or objective prices which can no non-arbitrary and consistent basis. The value through human action approach assumes much less and admits its own ignorance of a true "value" measurement.

Originally posted by Negoba

There have been some good demonstrations that hard and fiat currencies really don't differ in the end. Gold buried in the ground has absolutely no economic value. Whatever is actually part of the percieved value in ongoing transactions is what matters. As you mentioned in price and value, the only thing really governing exchanges is the perceptions of the actors involved. Money works because you and I believe in it. The moment you think gold has the same value as granite and I think gold has more value, our hard medium of exchange becomes useless.


Care to show that? I've honestly never heard an economist take that position in the age of monetary awareness. Past mainstream economist just tended to completely ignore the monetary analysis in favor of a fiscal approach, but I'm not aware of people who acknowledge that the monetary system affects the economy who would take this position. I can't even imagine it in this day and age really.

Well gold buried in the ground has economic value as much as food has economic value. You could say it has no intrinsic monetary value, which itself wouldn't be quite accurate. Gold's properties have allowed it to function well as money which cause it to be chosen cross-culturally. You're right that money works because we believe in it, but that's not really an indictment of it. Further, the value of money comes largely as a function of its past acceptance. It's a rather continuous process. We shouldn't worry about the faith in gold as a medium of exchange just drying up overnight. I don't really see your criticism.


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Post Options Post Options   Quote Negoba Quote  Post ReplyReply Direct Link To This Post Posted: May 11 2012 at 13:51
First of all, I know you know more about economics than I do. But I'm just going to give my opinion of what I know and what I remember.
 
I'll have to find the book and then go to the book's sources to back it up. It was during my time of thinking that fractional reserve banking was the biggest swindle in the history of man-kind. That banks get to basically create money out of thin air through stacking IOUs on the same base seemed like a massive lie.
 
And it is.
 
And it isn't.
 
When I started asking my friends in business, they quickly started talking about credit. At first I didn't get the difference, and felt that credit was bad in general. But I'm starting to figure out that all money is credit. Hard currency is just a credit for a specific amount of gold or whatever. No one ever goes to get the gold. Few would have any use for it even if they did. The only reason that it feels better is because of the shared perception of its ability to retain value. If my gold is buried in the back yard and I write notes on it, and no one ever claims it, it doesn't matter if it's there or not.
 
 
So again back to my original issue. Money is a social construct. A story or narrative that directs behavior. The problem for me is that the narrative of the exact same term (one dollar) means vastly different things for different members of the populace, mainly based on financial savvy. The explicit narrative is that a dollar has a specific value. This is a lie. A dollar is an agreement and that agreement is extremely malleable. I watch vulnerable people getting hurt almost weekly because they believe this lie.


Edited by Negoba - May 11 2012 at 13:53
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Post Options Post Options   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: May 11 2012 at 13:57
Originally posted by Negoba

First of all, I know you know more about economics than I do. But I'm just going to give my opinion of what I know and what I remember.


Did I call you economic ignorant? That wasn't my intention if you've gotten that impression. I wasn't trying to say anything about your knowledge on the subject.


Originally posted by Negoba

 
When I started asking my friends in business, they quickly started talking about credit. At first I didn't get the difference, and felt that credit was bad in general. But I'm starting to figure out that all money is credit. Hard currency is just a credit for a specific amount of gold or whatever. No one ever goes to get the gold. Few would have any use for it even if they did. The only reason that it feels better is because of the shared perception of its ability to retain value. If my gold is buried in the back yard and I write notes on it, and no one ever claims it, it doesn't matter if it's there or not.


Having notes tied to a reserve of bullion limits the inflationary possibilities of a bank. It particularly makes it difficult, absent a central body such as a regional governmental bank, to inflate in the face of robust competition.
 
 
Originally posted by Negoba

So again back to my original issue. Money is a social construct. A story or narrative that directs behavior. The problem for me is that the narrative of the exact same term (one dollar) means vastly different things for different members of the populace, mainly based on financial savvy. The explicit narrative is that a dollar has a specific value. This is a lie. A dollar is an agreement and that agreement is extremely malleable. I watch vulnerable people getting hurt almost weekly because they believe this lie.


I agree with this only when talking about a particular monetary system. Money fully has a physical reality, but people seem to lose sight of that sometimes.
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