Libertarianism

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Thesh
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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 12:18 am UTC

The way I see it, the only possible morally justifiable economic system is one in which people are paid only for their labor, but otherwise have equal ownership of property. That is, everyone starts on an even playing field, and works for anything extra, but it never need to turn into significant property ownership. It should tend towards greater equality, no matter what the starting point.

From a utilitarian perspective, a market system is most efficient if money/cost represents actual scarce resources involved and the utility they bring, given information limitations. The more income inequality you have, the less this is true. The more wealth inequality you have, the less equal opportunity you have. From this standpoint, market socialism with cooperatives should be significantly more efficient than capitalism, especially if you required transparency. Capitalism works against market efficiency at every level.
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Re: Libertarianism

Postby arbiteroftruth » Thu Jul 19, 2018 12:45 am UTC

@Pfhorrest:

I agree up to a point. A totally free market with no interference compounds successes with subsequent advantages, leading to some potential for runaway success somewhat independent of ongoing merit. But I think most of that comes down to efficiencies of scale, so a correctly tuned progressive corporate tax can cancel out most of that (even just to fund mundane government functions, not for redistribution), and the rest is about removing barriers of entry.

@Thesh:

I disagree that labor is the only moral basis for payment. The most obvious alternative basis for payment is risk. One can provide a service not by actively laboring on anything, but by accepting the consequences of a risk, such as by giving a loan and and accepting the risk that the debtor won't be able to pay it back. It is morally reasonable for the lender to be paid for accepting that risk, in the form of interest on the loan.

But a loan is just an investment in the future productivity of the debtor. If there's a moral justification for that, why not for investments in the future value of an object? Someone pays to have some good produced, not for it's immediate value, but for the sake of having that object immediately available whenever it becomes necessary. But there's a chance that will never happen, hence risk in the investment, hence a basis for compensation.

Further, there's value for an individual to secure the right to make use of an object whenever they personally have need, which is essentially ownership of that object. If they then sacrifice that secured right for a length of time so that someone else can use it temporarily, that's a basis for compensation, hence the notion of renting is at least sometimes moral.

And so on and so forth. Problems with these justifications only arise when one is wealthy enough that they can diversify enough that there is minimal risk or sacrifice in the aggregate, which minimizes the basis for compensation. But this can be addressed without completely overthrowing the underlying concepts.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 12:51 am UTC

Morally, I'm not sure rewarding people for risk taking makes sense. It encourages more risk taking, and if you have the money to accept enough risk, it turns into free money by simply placing enough bets if expected returns are positive, which rewards you more the bigger your risk. So who ends up taking the risk, in the end? Well, the people who ultimately depend their investments. It makes a lot more sense to use insurance and see risk as nothing more than a cost, IMO.

Risk is not productive, even if some activity associated with it is.
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Re: Libertarianism

Postby arbiteroftruth » Thu Jul 19, 2018 1:21 am UTC

A sustainable insurance program is the exact same concept, just with the expected average benefit being distributed through a risk pool instead of delivered to an individual accepting the risk. There's nothing wrong with such an insurance system, but likewise I see nothing wrong with rewarding an individual for accepting the risk themselves.

Allowing separate individuals to make their own risky investments allows competition in investment strategies, as well as more naturally allowing simultaneous investments in competing ventures, as compared to a public risk-pooling system. It only becomes a problem when, as you put it, someone can make enough bets that it becomes free money. But one off-the-top-of-my-head way to address that would be to tax investment gains progressively with respect to the number of separate simultaneous investments, effectively limiting the rate of 'free money' one can achieve.

But unless one is willing to continually redistribute wealth to maintain equality, investment shouldn't be completely discouraged. The alternative is wealth that's either idle or spent on frivolous luxuries. And continual redistribution is a recipe for killing market incentives altogether.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 1:41 am UTC

There is no need for an individual to accept the risk. The insurance company operates at cost, and over the long run the expected return is 0%. There isn't really an economic justification for paying an individual for risk.

There is no need to discourage, and paying for costs doesn't discourage. To reward people for having money, you need artificial scarcity of money. Since it's cheaper to go to a bank, get a loan, and insure the debt than it is to pay someone for more than cost, "rewarding" for risk doesn't make economic sense unless you presume some sort of artificial scarcity of money. If you can pool your money with others, you can still eliminate that personal risk and guarantee positive returns. I can't really envision an efficient market where people are paid significant amounts of money for risk, without some creation of artificial scarcity.

I don't really think a libertarian system should be based around encouraging behavior. If the demand is there, someone should be able to do it. I think it is far more efficient to focus on reducing barriers to entry and minimizing costs. If you are forced to pay people more than cost and risk if you want to start a business, then you necessarily increase the cost of a new business.
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Re: Libertarianism

Postby arbiteroftruth » Thu Jul 19, 2018 2:00 am UTC

Everything you're saying is true, if you're dealing with an individual investment in a vacuum. But as I said, the individual investment approach allows competition of investment strategies, as well as more naturally allowing simultaneous investments in competing ventures. The former improves efficiency by rewarding the best strategies, and the latter improves efficiency by increasing competition in whatever industry, and relatedly decreasing the barrier of entry in that industry.

As for paying more than the expected monetary cost of a risk, the natural reason for that is the non-linear relationship between money and utility. Even if one can't afford a plethora of bets, and thus isn't making free money, it's still the case that a wealthier individual takes less practical risk in a given investment than a less wealthy individual does. For this reason, it can simultaneously make sense for the less wealthy to offload risk by taking a loan, and make sense for the more wealthy to give a loan, even when he's not diversified enough to treat it as free money.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 2:21 am UTC

arbiteroftruth wrote:Everything you're saying is true, if you're dealing with an individual investment in a vacuum. But as I said, the individual investment approach allows competition of investment strategies, as well as more naturally allowing simultaneous investments in competing ventures. The former improves efficiency by rewarding the best strategies, and the latter improves efficiency by increasing competition in whatever industry, and relatedly decreasing the barrier of entry in that industry.


No individual investment is precluded, but if the market is efficient then they will not be paid a premium for taking risks. It's not a moral decision; to do so in our economy we need to maintain artificial scarcity of cash, which is harmful to the economy. That's just how market systems are. If you want someone to pay you more for your money than it is worth, then you need artificial scarcity of money. If people can make money for nothing, then everyone will put their money into it, and the supply will go up and the cost of risk goes to zero. You can't earn profits without artificial scarcity, you can't earn interest without artificial scarcity. You can't expect to earn money off of anything but your labor, unless the markets are inefficient.

There is nothing preventing direct investment, or any type of investment you can have in a capitalist economy; you can take risk, you simply aren't compensated for your risk. So, if you want to make your money back you have to start up a business that you work in. It really doesn't change much - it just gets rid of the idea of the venture capitalist who comes in and is paid to take "risks". You can just keep your money in the bank and it increases only with inflation.

arbiteroftruth wrote:As for paying more than the expected monetary cost of a risk, the natural reason for that is the non-linear relationship between money and utility. Even if one can't afford a plethora of bets, and thus isn't making free money, it's still the case that a wealthier individual takes less practical risk in a given investment than a less wealthy individual does. For this reason, it can simultaneously make sense for the less wealthy to offload risk by taking a loan, and make sense for the more wealthy to give a loan, even when he's not diversified enough to treat it as free money.


Taking loans and giving loans don't require risk. You can insure those. And, again, as long as you have positive expected returns, you just have to diversify - create a trust, and anyone who invests in it will get free money. If you have zero percent real interest rates, then anyone can just keep borrowing and putting it into the fund. At some point, the return goes to zero.
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Re: Libertarianism

Postby arbiteroftruth » Thu Jul 19, 2018 3:08 am UTC

Suppose we take your notion of loans being provided by a public bank/risk pool, my question is after the public bank invests in a widget-making company, who is going to invest in the second widget-making company? The public investment fund has a low return on investment either way, because the success of the new company means less return from the original company.

But if you have separate investors with separate interests, it's perfectly natural for them each to give good terms to their respective debtors. It is the existence of these kinds of (anti-)correlations that gives value to a system of competing individual investments. The smarter investor is rewarded not just for taking a risk, but for her superior acumen in assessing the superior investment in a competitive market. The market naturally tolerates the cost of that additional reward because a public system only naturally invests in at most one competitor in a given industry. And society as a whole benefits from the darwinian effects of market competition when there are multiple competing investors.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 3:22 am UTC

No need for a public bank, it can all be done with private banking. The people who invest are the people who benefit; most likely, people living where the business is, who will be working or in some other way benefiting. That is generally going to be someone who actually works at the business. Simple as that. You seen to place a high value on the risk, and very little value on the labor. To reward the investor you need to create artificial scarcity, and to justify that you need to show that they do more good than harm, which is just an assumption on your part.

If the free market works, you don't need to incentivize investment. If there is demand, people will be able to profit, and so people will start a new business on demand. The cheaper money is, the more independent individuals or groups will be able to start their own competing business (especially if you assume no intellectual property). The absentee investor is not really an important role in our economy; it's only important because our economy is based around creating a dependency on the wealthy. And, again, libertarianism presumes you don't use government to influence behavior.
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Re: Libertarianism

Postby arbiteroftruth » Thu Jul 19, 2018 3:31 am UTC

1. I'm not talking about doing anything to incentivize private investment. I'm only saying that a moral economic system ought to allow it without intrusion, and asserting that the market will in fact find value in that.

2. In your ideal system, who runs the private banks? If they're privately owned by individual investors, then you've simply kicked the can up to the next level of abstraction, but the same principles apply.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 4:03 am UTC

This isn't my system. This is just talking markets. No one is prevented from taking risk and investing in their business, or even another. It's just that if you have efficient markets, then you don't get paid for risk. It's simply not a feature of market economics - the risk itself doesn't have value. It doesn't. People really aren't paid for risk; they are paid for the artificial scarcity of money. What you think needs to happen just isn't a thing. The whole "investor gets paid for the risk" is just a post-hoc argument for why investors deserve money for nothing.

As for the banks, again, if it's an efficient market then they will not be profitable. Many competitng banks and no artificial scarcity of money means there aren't any profits to be made.
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Re: Libertarianism

Postby ucim » Thu Jul 19, 2018 7:01 am UTC

First, it's important to separate the (in this case Libertarian) economic philosophy itself, which should work from "any point" forward... separate it from the idea of a "just" starting distribution and how to accomplish it. And even before trying to figure out how to accomplish a just starting point, we need to agree on what constitutes a "just" starting point in the first place. Especially considering that real estate is inherently varied, as are people. Every economic model should work "from this point forward" no matter what the model is, and getting a just starting point should be independent of the economic philosophy to be used from then forward.

If that is not true, then that's an interesting point of discussion.

Second, the value of a thing is not inherent. It's whatever each individual is willing to pay for something. Salt is valuable only because people want it. If they stop wanting it (or find an easier way to get it), it will stop being valuable. Whoever is holding salt at that point will lose.

Now, consider the following situation; the question will be "where has the injustice occured?" (Perhaps the answer is "nowhere").

We start with a just initial distribution, whatever it may be, except that it includes that people can own land, and each person does own a piece of land. Some people own land that has good soil, some people own land that has funny rocks, some people own land that has pretty views... and they own different amounts of land proportional to whatever a "just distribution" was thought to be at the time. Everyone agrees with it.

We proceed with Libertarian thinking.

Fred lives on land that has a lot of useless red rocks. Oddly, it's the only place that has these red rocks. The land is not good for farming, so he doesn't farm, but because this rocky land is of little use, he has lots of it.

Alice lives where there's lots of sun, so she makes movies, and is good at it. Lots of people watch her movies (according to the terms of the admission ticket) and she gains a following.

George lives on good farmland, but he doesn't know how to farm. He doesn't do well.

Fred meets Alice, and convinces Alice to make love stories that feature polished red rocks, of the kind that happen to only be found on Fred's land. People who watch those movies (most people!) decide that they want red rocks. That was Fred's motivation, and now Fred has a market for these "useless" red rocks. He starts making money. But he also realizes that these rocks only exist on his land. So he only sells a few at a time, making them appear scarce (even though his land is literally covered in them). The price goes up, and Fred makes a fortune.

George finally gets the hang of farming, but he's late to the party, and cannot make the fortune that Fred and Alice have made.

Each of these people have two children apiece, and they inherit the family businesses.

1: There is certainly wealth inequality now. Is it still a "just" distribution?

2: Has any injustice been committed (from a Libertarian standpoint)? Where and when?

3: What is the (Libertarian) remedy, if there has been injustice here?

4: At this point, somebody on the internet wants to impose some other economic philosophy, but first wants to "reset" to a "just distribution". How would you do that?

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Re: Libertarianism

Postby elasto » Thu Jul 19, 2018 11:24 am UTC

Does anyone else here listen to Joe Rogan podcasts? He does longform chats - frequently over 3 hours - with interesting people. He's thoughtful, insightful and wonderfully self-deprecating - not typically a trait associated with US celebrities and very appealing to Brit sensibilities :D

Anyhow, he has an eclectic range of guests from the far left to the far right, and, if you're willing to listen with an open mind, the format really lends itself to expanding one's worldview. (Tyndmyr, let me take this opportunity to publicly thank you for your efforts to thoughtfully and patiently explain the libertarian/conservative philosophy you personally hold, and I for one have learnt a lot through you.)

I was pretty disappointed with the most recent guest Peter Schiff though. He's basically a hard-core libertarian but I didn't feel like he represented his position very well. Big on dismissive and emotive language and low on evidence and detail from my point of view. Maybe he felt like he had to rush through his arguments but, given the time available, he really shouldn't have felt that.

Some points I took exception to were:

(1) He seemed to heavily conflate socialism with authoritarianism. Now I get that socialism by necessity ends up with bigger government than capitalism, but a government could have a big budget without being authoritarian. He talks like the opposite of socialism is libertarianism, and I think politics and governance is much more multi-dimensional than that.

(2) He claimed that socialism hasn't worked anywhere, and, when challenged, dismissed countries like Sweden as just as failed as anywhere else, and the people just as unhappy as anywhere else. I'm not sure the evidence for that holds up. He claimed that Sweden's riches come only from its capitalist past, and, again, I'm not sure that's true. It's certainly impossible to prove either way since we don't have a time machine to re-run recent history with different political systems.

Plus, if he's equating authoritarianism with socialism, China is one of the most authoritarian countries on earth, yet its growth over the last 20 years has been nothing short of spectacular. Now, I'm sure he'd claim that if it had been more libertarian its growth would have been even better, but, again, no time machine to find out. Russia's transition from authoritarian to free market failed so badly the Russians preferred to go back to authoritarianism, so that would suggest it's definitely not all smooth sailing: Just like communism might work in theory but is terrible in practice due to human flaws, I'd suggest that libertarianism might be fine in theory but terrible in practice due to a whole different set of flaws...

(3) Libertarians in general seem to be quite blind to the fact that people don't act rationally - both in their personal life and with most economic decisions - whether that's picking a university course, spending on credit, buying an appliance or anything else. For free markets to function well there needs to be perfect information and perfection decision making and that's just simply never the case. Markets are especially poor at pricing in externalities, avoiding free rider issues and so on: If two companies produce a widget and A sells it cheaper than B because A is willing to be more polluting, the market is very very poor at punishing A for that - especially in any kind of timely fashion that actually penalises the CEOs collecting the fat bonuses. It's tough enough for the average consumer simply to weigh up price vs quality, let alone contemplate all the moral ramifications of how A treats their staff better than B but B uses more sustainable practices than A or whatever...

Without perfect information and perfect decision making, it's totally up in the air as to whether a free market will perform better than a regulated one. I'd argue it's entirely down to the wisdom of the regulations.

And that brings me back to Sweden and co. I say that good governance is the overridingly important factor rather than political philosophy, and I'd say that the Scandinavian countries have been governed pretty well. Take Norway's trillion dollar sovereign wealth for example: Countries can be prudent or profligate regardless of political stripe, and that matter far more in the long-term.

The US has had particularly poor quality regulation in recent decades - too much of the wrong kind of regulation in some places, too little regulation in others, and has definitely coasted on its historic wealth and advantages. And Schiff is certainly correct to say that government has been deeply and knowingly complicit in the overinflation of bubbles that have and will continue to cause great harm when they burst, such as the housing bubble, the stock market bubble, the student loan debt bubble etc. But let's not pretend like a libertarian society wouldn't have horrific bubbles from tulips to bitcoins too.

Yes, in a perfect free market bubbles would not occur because everything would be accurately priced, and monopolies dissolve on their own because every market has a low barrier to entry, but I don't think that's a world we'll ever live in; In this world we need wise regulation to curb the worst excesses, just hopefully without curbing the greatest benefits.

(4) Libertarians have a mantra that businesses create wealth and government can only consume it. Yet Schiff himself came out with the trope that it's really the employee paying both halves of the social security tax when 6% of wages is withheld from the employee and 6% from the employer, calling that a 'con'. But that confirms that it's the employee who makes money for the business - a business that could therefore be state owned just as easily as private.

So, if we agree that businesses are just a conduit transferring money in one direction and value in the other via the labour of their employees, why is government any different? Ignoring the complication that government can print its own money, it seems to me that government and business have a great deal in common. Yes there's no market pressure on government to be 'efficient', but in this magical world where people have perfect information and decision making, why couldn't they make as selfless and omniscient a decision on what policies to vote for as when they decide what company to buy a widget from? Seems like in this magical utopia virtually any form of government or market would work well.

And this explains why countries like Norway or China can do so well: Chinese industries make a ton of money even given heavy state intervention and ownership. Norway's sovereign wealth fund makes money hand-over-fist despite being funded through the taxpayer. Governments can make money - it's just too trite to claim they can't. When a government builds a railway system across the country, or rolls out broadband infrastructure, they are making money. Heck, if they fund a mental health service that causes people to spend more time in work, or a justice system that successfully rehabilitates, that makes money too. It just doesn't show up in the books as transparently as when a company sells a widget at a profit.

Overall it's a shame because I agreed with many of the things he said, like that Western countries need to balance their books and their trade deficits, that the economy and the employment rate are a tissue of lies, and that interest rates need to return to a level that makes people save rather than consume on credit, but he was way too emotive, dismissive and patronising in his tone. I'd contrast him with Jordan Peterson, say, who was a truly excellent Joe Rogan guest: a right-winger who wasn't just intelligent but compassionate. Spoke tough, uncompromising language but with obvious empathy and understanding. Schiff came across quite cold - making the common mistake libertarians do of assuming that economic growth is the only growth that matters, vs Peterson's heavy emphasis on personal growth, with society as a whole growing as a result. (Also didn't help that it felt like Schiff was plugging his gold-selling services at every turn...)

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 1:37 pm UTC

elasto wrote:Now I get that socialism by necessity ends up with bigger government than capitalism


Considering most systems of anarchism are socialist systems, this is not true. What is most of our government anyway? Most of our public spending either ends up being guard labor or redistribution to deal with the problems of inequality, and even then we really do a shit job.

Personally, I see the entire idea of appointing individuals to have absolute authority over a piece of land that other people need to survive to be inherently authoritarian, and resolving conflicts democratically as inherently libertarian. The problem is that most right-libertarians focus on freedom from the perspective of the people with the most power, while they make value judgements that say that people who control resources inherently deserve more than people who merely work. They don't have libertarian ideals, and they justify their system with a cynical view of humanity, that basically assumes that most people are too stupid to know what they want, or just flat-out dismisses democracy.
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Re: Libertarianism

Postby ucim » Thu Jul 19, 2018 3:06 pm UTC

elasto wrote:And that brings me back to Sweden and co. I say that good governance is the overridingly important factor rather than political philosophy, and I'd say that the Scandinavian countries have been governed pretty well.
I would agree here. But getting (and keeping!) the "good" in governance is the hard part. How long would a benevolent dictator remain benevolent?

Governance goes bad because people are flawed. Greed, lust, laziness, fear, ego, tribalism, contempt, and the mere fact that most people want to just live their lives rather than deal with the actual aspects of governance. All these things are inherent in people and it's not reasonable to count on people simply "being better than themselves". It's a nice goal to aspire to, and it's something our leaders should have, but it's dangerous to count on it always being so. The point of (any particular) political (and economic) philosophy is to create an atmosphere in which good governance is more likely to flourish, and less likely to go bad. No philosophy will guarantee this, but the more it relies on counteracting the basic forces of people's flaws, the less likely it will be to succeed in the long run. So, I think the choice of political philosophy isn't as secondary as you make it out to be.

Each one is flawed. Each one will need to be reined in in some way. But some inherently work against human nature, and others rely on it.

Thesh wrote:The way I see it, the only possible morally justifiable economic system is...
Doesn't it depend on what your basis of morality is? And that basis can have a long-term or short-term focus, a group focus or an individual focus, some way of acknowledging the fact that not all men (and women) are created equal, and many other details that are important, and that reasonable people can disagree upon.

thesh wrote:The insurance company operates at cost, and over the long run the expected return is 0%.
Why should anybody actually create such a company? What's in it for them? Why should I go into the insurance business when I would (in the long run) do just as well sitting on the shore sipping margaritas?

Thesh wrote:To reward people for having money, you need artificial scarcity of money.
No, that's simply the thing that gives money its value. If there's no scarcity, then it has no value as a medium of exchange. It's like air. And if there's no viable medium of exchange, there's no economy to speak of.

Thesh wrote:...but if the market is efficient then they will not be paid a premium for taking risks.
Why not? Risks are, well, risky. Perhaps what you are saying by "market is efficient" is that "there are no unknowns", in which case there's no such thing as risk. But that is not a description of reality. And packaging it up in an "insurance company" just hides the issue. Risk doesn't just go away, it is borne by the insurance company. Which somebody has to run.

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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 3:22 pm UTC

Pfhorrest wrote:
Tyndmyr wrote:The child who grows up with a murdered parent is indeed disadvantaged in the present day. It is still not just to punish the murderer's children, even when we know who the murderer's children are. It is even worse to punish at random if we do not know who the murderer's children are.

I think this "punishment" thing is where we're losing track. Nobody is talking about punishing the people who did misdeeds, or their descendants. (Well, we would be, but we don't even know who they are.) If Bob steals something from Alice and sells that to Charlie, Charlie doesn't have a legitimate claim to the stolen property he bought, but nobody's looking to punish Charlie, because he didn't do anything wrong. The thing still isn't his property though, and Alice is still entitled to have it back.

We're talking about an intractable social-scale mess of that kind of situation. Nobody's looking to punish the Charlies, just to make restitution to the Alices. But nobody knows who's a Charlie or who's an Alice with regard to what, because it's all lost to history. Do we just tell all the Alices whoever they might be that tough shit, some Charlie has your stuff now?


All the same, you are effectively punishing Charlie. If you took the same action against Bob, it'd be a just punishment. Therefore, you have committed an injustice against Charlie.

Ultimately, the world has a lot of Charlies at present, so if you're looking to sort out past wrongs, you end up committing a lot of injustice right now. You may legitimately punish a few Bobs, and help a few Alice's, but those are merely incidental, and the primary effect of the action is to commit injustice. You become a Bob.

Thesh wrote:@Tyndmyr

So, you assume that to have redistribution, you must have violent insurrection to overthrow the leaders and implement a dictatorship? And that's basically your only argument against redistribution?


No. A person who dies of starvation or cold due to the loss of wealth following mass redistribution will suffice to demonstrate why it tends towards evil. Violent insurrection is also a large negative, of course, but even without that, completely upending our existing property holdings in order to equalize them would be a horrible evil.

Thesh wrote:No one is looking for utilitarian arguments. No one is even talking about communism or socialism; literally, nothing more than redistribution for the sake of a just libertarian capitalist society. You have stated that redistribution is practically impossible, and immoral, yet it happens in our society today. It's quite easy to just pass a law to change ownership. It doesn't require a war and violence. This is all shit that you are making up, solely for the sake of dodging the questions about morality.


No, on a strictly moral basis, it's quite wrong. Even if you discard utilitarian arguments as moral, which is curious. As listed above, such an action, as it inherently requires taking property from legitimate holders, is doing the exact same as history's other thieves. Yes, I know it's traditional to attempt to justify this on the basis that you'll be doing more good to others....exactly as everyone else in history who swiped the property of others has done.

Thesh wrote:So, assuming that you can pass laws without also committing genocide. Assuming that we have a way that we have a simple, easy way, to redistribute the wealth without causing hardship. Why shouldn't we?


Has any country ever completely reordered property rights in this fashion without committing genocide?

Pfhorrest wrote:The social-scale equivalent of that "best we could do" would be, surprise, to divide up the property evenly among the people. Because not only is Bob nowhere to be found but we don't even know who's an Alice and who's a Charlie, just that there are lots of both, and we want to do as right as we possibly can by all of them. So we split the burden evenly between the Alices and Charlies. We don't just tell the Alices to pound sand.


An Alice is not necessarily impoverished now. It may be statistically likely, but many people have, despite being victimized at some point in their past, managed to do quite well for themselves. When talking on a timescale of many generations, this is even more true. At some point, it vanishes into background noise. Presuming, of course, that the lineage is still alive. In many cases, the Alice's are no longer alive.

So, what you are doing is not sharing the suffering, because no measurement has been taken of the suffering. Instead you are sharing current wealth, which is not at all the same thing.

In doing so, you'll victimize some measure of Alices, Bobs and Charlies. The few Bobs you get, cool. But everyone else, you're just victimizing. You have now created a new class of Alices with respect to this incident. The other folks who are benefited by redistribution have become Charlies in respect to it.

Redistribution, under the same ethical structure with which it judges other redistribution, is intractably evil. It is the very evil it uses to justify itself.

sardia wrote:If you're arguing that massive redistribution usually results in evil, what about small percentage of a large economy? Eg ACA transferred wealth from the rich to the poor via subsidies and taxes. That's could count as a massive redistribution or a slightly less massive redistribution. Is any of that evil?


It's a wealth transfer, but it's not a redistribution of all property. I would still count it as a negative ethically, since it requires taking from those who have not consented to it. However, it is extremely different from upending all current property claims. The scale is much, much smaller, and it is far less intrinsically disruptive.

If we wished to assign values of evilness to various redistributive actions, you'd want to consider two factors. First, the amount which one has stolen. Society as a whole treats the crime of stealing a loaf of bread to not starve as a fairly minor offense. Undesirable, but the scale of the theft most certainly matters. Second, how many people you have victimized. Anyone agreeing to a redistribution cannot be considered a victim. So, things that everyone generally consents to are superior to situations in which people are coerced into supporting things they object to.

Sometimes, unfortunately, it all gets labeled "socialism", treating the word as a slur, but that loses some very important distinctions. I'm not thrilled with the ACA, but treating it as equivalent to land redistribution would be wildly unfair.

sardia wrote:Regarding statue of limitations, if I took your guns/stuff 100 years ago, i agree that's statue of limitations. But if I took all the gun factories by genociding/forced migration of your forefathers, would that still be not fixable because the statue of limitations ran out? Like I'm sitting there enjoying the gun factory inheritance from my parents. It still has your family crest on it or whatever historical evidence. You would be ok letting it go?


It can get sorted out if the specific stolen stuff, the victim and the perpetrator can all be identified. In the example you've shown, it's relatively clear. Fixing that may indeed be possible(we've managed to do many similar things fixing Nazi war thefts, which I consider a good thing). The difficulty arises when one of those three parties cannot be identified. If your ancestors sold off the gun factories to others, and ownership changed hands a number of times over the years, the current owners are not guilty in the same way that the original thief was. You, likewise, bear no individual responsibility. Is it just to claim that you must repay all debts your ancestors accrued, merely because of your relationship to them?

Who bears this moral burden, if the sins of the parents are inheritable? All the children? Just the wealthy ones?

Pfhorrest wrote:I actually agree that a properly moral economic system should be able to start from a screwed up initial distribution of wealth and naturally tend toward a more just one over time. An economic system should not be dynamically unstable, where small perturbations amplify over time instead of diminishing.

But classical right-libertarianism is not such a system. It needs to get it right from the start or else will just get worse over time. (And, being dynamically unstable like that, will get worse over time anyway just as a product of runaway random perturbations. But getting it right at the start is still necessary for it, even if not sufficient).


Starting from a screwed up initial distribution is definitely a necessary requirement for politics. Any political system will have to cope with some extant unfairness.

I think wealth, in general, makes it easier to accumulate more wealth. This is true pretty much regardless of system. Limiting government influence that can be bought, however, removes other barriers to wealth accumulation. A libertarian system is one in which a millionaire has a pretty good shot at staying a millionaire, or becoming a multimillionaire, but also one in which they are treated more equally in a legal sense. The millionaire who murders ought to be in jail just as long as the man without a penny. This can result in fortunes changing very swiftly for the wealthy who do evil.

Overall, this ought to give you a decent level of social mobility if you can make it work. At least, presuming you believe that some significant element of wealth is gained immorally at present. It will not stop honest men from continuing to gain wealth, but this is a feature, not a bug.

Thesh wrote:From a utilitarian perspective, a market system is most efficient if money/cost represents actual scarce resources involved and the utility they bring, given information limitations. The more income inequality you have, the less this is true. The more wealth inequality you have, the less equal opportunity you have. From this standpoint, market socialism with cooperatives should be significantly more efficient than capitalism, especially if you required transparency. Capitalism works against market efficiency at every level.


Capitalism has the most efficient markets. The stock market gets exceedingly close to a perfectly efficient market, as demonstrated by the inability of individuals to outperform it. The stock market is capitalist as hell...I can't honestly think of anything more blatantly capitalist.

Your conclusion being utterly disproven, either your logic or one or your axioms must be false.

Thesh wrote:Morally, I'm not sure rewarding people for risk taking makes sense. It encourages more risk taking, and if you have the money to accept enough risk, it turns into free money by simply placing enough bets if expected returns are positive, which rewards you more the bigger your risk. So who ends up taking the risk, in the end? Well, the people who ultimately depend their investments. It makes a lot more sense to use insurance and see risk as nothing more than a cost, IMO.

Risk is not productive, even if some activity associated with it is.


Risk is diversified through investments, and spread out. Insurance has some similarities, but some high risk things are difficult to insure. Starting a business represents a significant amount of risk, and the market effectively acts as insurance for that. By using invested money, you are at less personal risk, and the investors take some of that on.

If we want new businesses being started, rather than continually patronizing the same old businesses, then investment is extremely good. Note that new businesses are one of the big ways to get class mobility. Startups like Google, Netflix, etc have been very, very good to investors who backed early and stuck with them, and those investors, along with the founders, generally experienced significant rewards for backing ideas that worked out.

If you destroy that avenue, you make it a great deal harder to crack into a market or create a new one, and positive mobility is harder to achieve.

Thesh wrote:I don't really think a libertarian system should be based around encouraging behavior. If the demand is there, someone should be able to do it. I think it is far more efficient to focus on reducing barriers to entry and minimizing costs. If you are forced to pay people more than cost and risk if you want to start a business, then you necessarily increase the cost of a new business.


A libertarian system relies on market evaluations for price, and profit as the incentive for people to do things. Libertarians take issue with the government providing explicit subsidies to industries, as it results in barriers to new entrants, and cronyism. However, market signals are absolutely fine.

If you're trying to kill off profit and market, you're probably not after a libertarian solution.

Thesh wrote:This isn't my system. This is just talking markets. No one is prevented from taking risk and investing in their business, or even another. It's just that if you have efficient markets, then you don't get paid for risk. It's simply not a feature of market economics - the risk itself doesn't have value. It doesn't.


If two people offer loans, and one is far higher risk than the other, then to lure in scarce money, the higher risk loan will have to pay more. This is what is meant by pricing risk, and it is fair. Nobody wishes to lose their initial investment, so being paid a premium for risking the loss is reasonable. Generally, the market is fairly good at this, and if you see someone offering a very high return, zero risk investment, you are right to be wary of a scam.

In addition to this, information has a cost. There is a non-zero cost associated with risk evaluation, and regardless of it is handled via market investments or insurance, some degree of research will have to be done. I suspect that risk is far more dominant of a cost, but if you're objecting to people making a living off of investing, why not object to the people who would make a living working for the insurance company you propose? In either case, someone is being paid for handling the task.

ucim wrote:Every economic model should work "from this point forward" no matter what the model is, and getting a just starting point should be independent of the economic philosophy to be used from then forward.

If that is not true, then that's an interesting point of discussion.


I agree. The current distribution is, in some respects, unjust. This is also true of non-property rights. Some people have gotten less free speech, historically. Some people have gotten a less fair shake from law enforcement. Some people have been preferentially murdered.

It seems that in all cases, people agree that a fair system going forward is ideal, with past wrongs being fixed if we can identify them specifically. It would be very, very strange to say that since people were murdered unfairly in the past, it doesn't matter who we murder now, and thus, we should murder a LOT of people.

Most of us understand that this would be ethically monstrous.

I'm not sure why different standards are applied to property.

Anyways, in your example, nothing injust has happened. Nobody has been forced into doing anything they didn't want to do. Some people are just dissatisfied with the result of their choices. From a Libertarian standpoint, everything is fine, and no change is necessary.

elasto wrote:Anyhow, he has an eclectic range of guests from the far left to the far right, and, if you're willing to listen with an open mind, the format really lends itself to expanding one's worldview. (Tyndmyr, let me take this opportunity to publicly thank you for your efforts to thoughtfully and patiently explain the libertarian/conservative philosophy you personally hold, and I for one have learnt a lot through you.)


Thanks! I find that, unfortunately, lots of elements are scattered about, and while many of the assumptions may be commonly understood if you are in the circle, it is sometimes not made cohesively clear to those who don't already agree with many of the axioms presented. The individualistic nature of libertarianism presents a further problem, in that people often focus on the one aspect where they disagree, rather than the overarching ideology. Thus, to many people, libertarianism is flanderized as "those folks who want to legalize pot" or similar. That's true, but it's only one small aspect.

Socialism vs authoritarianism conflation is definitely a problem. Libertarianism is heavily against both, and per the halo bias, if you dislike one thing about an adversary, you're more likely to attribute them additional properties you dislike. Comes up a ton. Both are a problem, and they coincide to some degree naturally, but addressing them individually is fair. Each has problems distinct to it.

As for socialism not working, and talking about Sweden, well...there is a significant difference between say, Sweden and the USSR. It's true that libertarian ideology sees ways to improve on both systems, but there's an immense difference of degree there. Full on property redistribution is different than merely having a high tax rate. The former extreme, you can safely say doesn't work anywhere. The Swedish economy is more of a mixed economy. Libertarians needs to properly address the Nordic model in a fashion distinct from more purely socialist states.

China's growth has been highly correlated with increasing capitalism and increasing freedom. While the country at large still has many improvements to be desired, growth has been concentrated in places where latitude has been given to industry. In addition, personal freedoms can be sought for non-GDP related reasons. In a choice between a country with free speech, freedom of religion, and an equal-GDP country without, I would prefer the former. If one considers suffering a cost, then countries with a great deal of authoritarianism appear less attractive.

(3) Libertarians in general seem to be quite blind to the fact that people don't act rationally - both in their personal life and with most economic decisions - whether that's picking a university course, spending on credit, buying an appliance or anything else. For free markets to function well there needs to be perfect information and perfection decision making and that's just simply never the case. Markets are especially poor at pricing in externalities, avoiding free rider issues and so on: If two companies produce a widget and A sells it cheaper than B because A is willing to be more polluting, the market is very very poor at punishing A for that - especially in any kind of timely fashion that actually penalises the CEOs collecting the fat bonuses. It's tough enough for the average consumer simply to weigh up price vs quality, let alone contemplate all the moral ramifications of how A treats their staff better than B but B uses more sustainable practices than A or whatever...


Individuals are bad at many of these things, absolutely. One of the advantages of markets is that they benefit from the wisdom of the crowds*. The average guess of a great many people about something is generally far more accurate than the deviation of their guesses. Therefore, markets correct for a human shortcoming. Markets are still not quite perfect, but statistically, it's a vast improvement.

Externalities are a special case that is oft-discussed. The nature of the current system is that a company may pollute for many years, pay no price, and eventually the public cleans it up. Ideally, the cost of the pollution ought to be included. Market systems to price this would be ideal. Such a system was used to combat acid rain, and it was highly effective.

*The book by this name gives an excellent perusal of the effect.

Anyways, I agree that regulations are not entirely a quantity like butter or milk. It's hard to measure the impact of a law in terms of pages or what not. Good vs bad is a concern, but the US faces a few obstacles here. In part, we have a hard partisan split, with folks who want very different things. We also are a very large country with very differing needs. The EU as a whole faces some similar challenges there, in which interests diverge and agreement can become difficult. Part of that's just scale. A smaller, more homogeneous country has to face fewer challenges in this respect, which can be advantageous. Part of the libertarian discussion is US-skewed, and affected by assumption that are particular to our system. For instance, we talk a lot about the two party system, but that's not always a thing in other countries. So, some things that concern libertarians greatly may simply not be a problem in other countries.

(4) Libertarians have a mantra that businesses create wealth and government can only consume it. Yet Schiff himself came out with the trope that it's really the employee paying both halves of the social security tax when 6% of wages is withheld from the employee and 6% from the employer, calling that a 'con'. But that confirms that it's the employee who makes money for the business - a business that could therefore be state owned just as easily as private.


Sort of. In practice, not every employee is equally productive. Doubling the amount of managers without doubling the amount of workers may not increase overall productivity at all. Hell, if there are too many managers doing busy work, occupying worker time, productivity may decrease.

Government is basically overhead for society(barring cases, of direct government industry, which has it's own issues, and is generally not the case in the US. When we speak of the government building roads, we usually mean the government allocating money to private contractors for the building). Some level of overhead spending is necessary, but it's definitely possible to over-invest in it. Largely, libertarians believe the US is in this state, and more broadly, that it is easy for governments to trend to this state. Companies usually cannot compel customers to pay for them, but governments can. The balance of power between government/citizen is less equal than between company/patron. Therefore, government agencies are more commonly created than abolished, and laws are more easily passed than revoked, and government spending most easily trends upward.

There are ultimate limits, in that a government that is too blatantly inefficient and corrupt can eventually cause a societal collapse, and a new government will form, but this is an extreme case. Many first world countries have sufficient wealth to allow for significant overhead spending without risking collapse, and doing this can be quite inefficient.

Largely, it's about controlling overhead costs in relation to productivity, though that probably wouldn't sound very sexy on television.

Gold-buggery is, unfortunately, mostly kind of dumb. It's a fringe thing that gets associated with libertarianism to some degree for historical reasons. Ideologically, gold isn't particularly critical.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 3:32 pm UTC

ucim wrote:Doesn't it depend on what your basis of morality is?


I accept moral realism, but even from a utilitarian standpoint inequality is inherently harmful. To justify it, you need to show that inequality leads to more growth that makes up for the short-term pain, which is a value judgment that says that future people are more important than current people (and so far we are accepting millennia of short term pain for the promise of long term gains, which we don't actually have reason to believe will happen). Besides all of that, there's just not much to be gained in happiness beyond stability, security, and human relationships. Those are all the things we sacrifice for the sake of inequality.

ucim wrote:And that basis can have a long-term or short-term focus, a group focus or an individual focus


Why should it have any of those? You have to consider how your actions affect people in the short run and long run, both groups and individuals. What you are asking is what our priorities should be as a group. From a libertarian standpoint, we shouldn't be deciding those priorities through the economic structure; the economic structure should allow us to choose our own priorities.

ucim wrote:Why should anybody actually create such a company? What's in it for them?

Because people need jobs. Why should people be paid for doing nothing? There's this odd assumption with libertarians that without the ability to make money off of money alone people would sit around scratching their butts. It just doesn't work like that.

ucim wrote:No, that's simply the thing that gives money its value. If there's no scarcity, then it has no value as a medium of exchange. It's like air. And if there's no viable medium of exchange, there's no economy to speak of.


Scarcity is something that exists naturally. Artificial scarcity is unnecessary. We deliberately limit the supply of money in our economy, for the sake of increasing interest rates, which increases barriers to entry and results in lower production, so that we can reward rich people for having money.

Supply and demand: at x price y units will be demanded, at w price z units will be demanded, and if z>y, w<x. By raising the price, you reduce the quantity produced, and also reduce the demand for labor. The actual act that leads to profits is the action that reduces production.


ucim wrote:Why not? Risks are, well, risky.


Risks are only risky if you don't have positive returns and can't diversify. With positive expected returns for risk, it's just a matter of placing enough bets and the risk becomes miniscule. Given two investments that have an expected return of 5%, with one investment having a 50% chance of failure, and the other having a 1% chance of failure, the lower risk investment is the better investment. If you pay people for risk, then you encourage people with enough money to take the more risky investments, with no real gains to society in the long run, probably losses when you consider the externalities.
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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 3:55 pm UTC

Thesh wrote:
ucim wrote:Doesn't it depend on what your basis of morality is?


I accept moral realism, but even from a utilitarian standpoint inequality is inherently harmful. To justify it, you need to show that inequality leads to more growth that makes up for the short-term pain, which is a value judgment that says that future people are more important than current people (and so far we are accepting millennia of short term pain for the promise of long term gains, which we don't actually have reason to believe will happen). Besides all of that, there's just not much to be gained in happiness beyond stability, security, and human relationships. Those are all the things we sacrifice for the sake of inequality.


All investment sacrifices spending right now for long term gains. Over the long term, a society that invests in the future does well, though. Some of the Roman roads are still around. Sure, bread and circuses are popular in the short term, but we should always be spending some significant amount of wealth on investment for the future. A policy of doing so now, as compared to a consumption focused one, will always have a short term period of less available wealth, followed by a longer trend of better performance(provided you have invested profitably).

I'd rather be poor in the US or other wealthy countries than middle class in the developing world. This is even more true if the US continued to invest in itself, keeping a healthy economy going, rather than allowing infrastructure and what not to slip into disrepair. There's a few cities in a bit of a rough state, and it's definitely preferable to be poor in a nice area, even if the rich are richer, than to be poor in an area with lower average wealth. The latter might put you closer to equal, but it's not a desirable equal.

Why should it have any of those? You have to consider how your actions affect people in the short run and long run, both groups and individuals. What you are asking is what our priorities should be as a group. From a libertarian standpoint, we shouldn't be deciding those priorities through the economic structure; the economic structure should allow us to choose our own priorities.


It does. You can choose to prioritize anything you want. But we have significant experience with market economies, and understand what works. You can definitely form a co-op if you wish. The big megacorps will not be displaced with co-ops, though. You're free to do what you wish, but success is not guaranteed.

Scarcity is something that exists naturally. Artificial scarcity is unnecessary. We deliberately limit the supply of money in our economy, for the sake of increasing interest rates, which increases barriers to entry and results in lower production, so that we can reward rich people for having money.


Money is artificial, but it also needs to be scarce. It's literally in the definition. If anyone can have as much as they want, it won't function as money.

This is actually fairly easy to test experimentally at the moment, thanks to cryptocurrency. You can watch values crater if, as TRX did, the creators decide to release a bunch more into the market. I'm not sold on cryptocurrency replacing other forms just yet, but it is fascinating to watch and gather information from, and monetary supply definitely affects the value.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 4:05 pm UTC

No scarcity of money means that your ability to borrow is dependent on your ability to pay that money back. That is, money can be printed at will to meet the demand for money. Think of a bank that has no money in it that is allowed to issue bank notes up to their assets. A bank with zero assets prints money, and lends it with the promise they will pay back with inflation, with the requirement that they back that loan 100% with insurance. Now, anyone who wants money can borrow at inflation, provided they have the ability to pay it back, and because it's insured by the borrower there is no real risk for the bank.
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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 4:13 pm UTC

If one can create a bank with zero assets and print money, then that seems like an abnormally profitable venture. Also, I cannot think why any insurance agency would wish to back this enterprise's loans. The bank gets the benefit of having printed money, and the risk is offloaded? That seems like a bankers dream.

You are only transferring the risk from bank to insurance company, it is not mitigated in any way. Giving banks the ability to actually mint currency without any asset limitation is problematic. At that point, currency creation is entirely uncapped, and money ceases to be scarce.

If money isn't scarce, it doesn't have value. We could use grains of sand from a beach, or any other scrap of paper instead of our current dollar, but we don't. We use this dollar specifically to avoid counterfeiting and having everyone make money. You can start your own currency if you wish. If it is infinitely printable by anyone, it will fail.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 4:15 pm UTC

There are no profits. The money printed is equal to the principal value of the loan. Once the loan is paid back, the bank is back to zero assets, and the bank notes are destroyed.
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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 4:19 pm UTC

Thesh wrote:There are no profits. The money printed is equal to the principal value of the loan. Once the loan is paid back, the bank is back to zero assets, and the bank notes are destroyed.


And if it's not paid back? What, one goes to the insurance company and insists upon destroying their bank notes?

In any case, your chain of custody for currency just got extremely complicated compared to our current setup. Instead of having to steal money that is bound for destruction the current, extremely challenging way, one merely has to get a job at any bank.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 4:22 pm UTC

Again, the point was to demonstrate money without artificial scarcity. This is the problem with libertarians, you are so concerned with trying to come up with excuses for why profits are necessary, that you always end up missing the point.
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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 4:33 pm UTC

You cannot have money without scarcity. If it isn't scarce, why would I trade my goods or time for it, when they are?

This is irrelevant to profits...though it does seem you are very fixated on removing them. In any case, running an unprofitable business is also possible under libertarianism if that's your desire. Hell, plenty of people seem to manage it by accident, so it ought not be difficult to do on purpose.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 4:38 pm UTC

And, back to square one, where you ignore the whole argument about what it means to limit the supply of money. Literally, artificial scarcity means you have to pay more money for money than what that money is worth. That's what interest is. I'm not insistent on removing profits; I'm just explaining that there is no utilitarian economic justification for profits.
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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 4:43 pm UTC

The value of everything is what the market assigns it.

Nobody is paying more money for money than it is worth. They're paying an agreed upon value that both parties believe is worthwhile to them. If you believe that this is too much, and you could successfully run a bank that lends money at some lesser value, you are welcome to open a bank and attempt to do so.

It's just really odd to insist on the ability to mint currency for banks.

I suppose one could justify it if it's a bank currency, and not all the same. You could have a bank-owned cryptocurrency, and whichever cryptocurrency ended up working out the best for everyone would be favored thanks to competition. That's probably an achievable thing. Minting dollars, though...literally every bank would have an incentive to cheat, and the means sitting right there. It poses huge practical problems.

In any case, libertarianism has no difficulty with the concept of profit. Profits are not immoral unless one has used improper means in accruing them. Profits are also not very different from wages. The gross profit made on a loan pays the salaries of those who work in a bank, and given that they're providing a service, it seems reasonable that they make money. Likewise, the risk taken by the lender justifies his earnings. The fact that someone has made money off of a transaction is not bad, and labeling it profit rather than salary or whatever else makes no ultimate difference.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 4:46 pm UTC

Tyndmyr wrote:It's just really odd to insist on the ability to mint currency for banks.


Jesus Fucking Christ.
s/banks print money and lend at inflation/government prints money and lends at inflation

There you go, now government is in charge of determining how much people deserve to be paid for money. All of your problems can be solved by government. Nothing changes, banks just borrow and lend. Happy?
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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 4:51 pm UTC

Thesh wrote:
Tyndmyr wrote:It's just really odd to insist on the ability to mint currency for banks.


Jesus Fucking Christ.
s/banks print money and lend at inflation/government prints money and lends at inflation

There you go, now government is in charge of determining how much people deserve to be paid for money. All of your problems can be solved by government. Nothing changes, banks just borrow and lend. Happy?


I cannot imagine why libertarians(or anyone else) would desire this system. If a bank has to lend at the inflation rate, then you do not have a real market for loans. Why would banks risk their money on anyone who is less than a perfectly safe bet(IE, those already rich enough to not need it)? Why would anyone want to make a bank if no profit is possible?

Basically, this strangles the ability of anyone to loan or get a loan, and would be pretty awful for the economy. It's antithetical to libertarian ideology, and does not hold up well under any economic school of thought.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 4:56 pm UTC

No, of course a libertarian doesn't desire that system. They love bitcoin specifically because it results in deflation - because literally, they believe people should earn money off of money buried in the backyard (SAVINGS!!!!!!!!). They place a high value on leaders, and a low value on workers. They view the entire economy from the perspective of the people with the most power, and assume that the only way productive activity can occur is if it starts with wealthy leaders acting in their own self-interest. Their entire economic theory is based off of making excuses for why rich people deserve to make money for doing nothing, and why poor people don't deserve anything.

But that's not the point I'm making. The point is that an economy that pays more than inflation for money is always a collective decision, or just inefficient markets.
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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 5:05 pm UTC

You're going off on barely-connected rants. Deflation is not necessary to have a good economy(and in fact, a lot of deflation can be really bad). Cryptocurrency merely applies to this conversation as a venue to test ideas, if you wish. If you want to make a currency with unusual rules, you can, and see what happens. Doing this used to be fairly challenging, but cryptocurrency has lowered the bar for testing theories in this area.

Look, nothing in a libertarian system prevents you from entering any arrangement you believe to be fair. If you, personally, wish to lend money without taking a profit, you may do so.

The fact that people generally do not choose to do so is important information. The market's conveying information to you about how everyone else values access to money. Your values are not everyone else's. Your response to this is "well, government should MAKE them value it the same". This doesn't go well. It destroys markets, and limits growth.

If the market is valuing something very differently than you do, a couple of possibilities exist. The first is that you are correct, and everyone else is wrong. If this is the case, you can probably find a way to make staggering amounts of money off of this. This is rare, and the efficient market hypothesis is a warning against hubris here. There's a lot of other people out there. Yeah, maybe they're all wrong, and you are genuinely the first person to see this, but that is inherently a rare event. Chances are fairly good that someone else would spot something before you.

The second, and far more likely result is that everyone else is correct, and you've missed something. This isn't weird, and it's not a moral judgement. The economy is innately complex, and nobody actually knows everything about it. If you find yourself frustrated because the entire world is working off of differing assumptions, it may be worth exploring those assumptions.

After all, either you'll learn something by understanding why things work that way, or (rarely) you can find something before anyone else, and make a lot of money by fixing it.

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Re: Libertarianism

Postby ucim » Thu Jul 19, 2018 5:21 pm UTC

Tyndmyr wrote:Anyways, in your example, nothing injust has happened. Nobody has been forced into doing anything they didn't want to do. Some people are just dissatisfied with the result of their choices. From a Libertarian standpoint, everything is fine, and no change is necessary.
Is libertarianism also fine with the DeBeers diamond cartel? Because that is (absurdly simplified) the important part of what happened there. It created a huge inequality. Is this an inequality that (by libertarianism) is harmful and would need to be addressed?

While nobody was forced into doing anything they didn't need to do, unequal wealth has been created out of thin air, simply by convincing people that red stones were valuable.

Same questions to Thesh, from a socialism POV. No significant work was done to create this significant red-stone wealth, now held by one person.

Thesh wrote:I accept moral realism...
...and I don't.

From Wikipedia, the free encyclopedia

Moral realism (also ethical realism or moral Platonism) is the position that ethical sentences express propositions that refer to objective features of the world (that is, features independent of subjective opinion), some of which may be true to the extent that they report those features accurately.


I don't think that morality is woven into the fabric of the universe; certainly not in the same sense that the equations of motion and charge are. Therefore, I do not accept anything that relies on this hypothesis.

Thesh wrote:...but even from a utilitarian standpoint inequality is inherently harmful. To justify it, you need to show that inequality leads to more growth that makes up for the short-term pain...
I don't think the iphone would exist without wealth inequality; neither would SpaceX. To get these things, you need concentrated wealth under the control of somebody with vision. It's not impossible in a socialist system, it's just harder to do. The more wealth-equalizing it is, the harder it is to do.

Thesh wrote:
ucim wrote:Why should anybody actually create such a company? What's in it for them?
Because people need jobs
No, people need paying jobs. Where will the money come from in this insurance company, especially after a few of their risks go the wrong way?

Thesh wrote:Scarcity is something that exists naturally. Artificial scarcity is unnecessary. We deliberately limit the supply of money in our economy...
Money is a thing of value with certain properties - i.e. salt or gold. Currency is a proxy for this thing of value. Once accepted, the thing of value that underlies it can be removed without affecting the economy (unless things go bad). In effect, the "thing of value" that the currency represents is "a piece of the functioning economy", and the amount of value that piece has depends on how well the economy is working, rather than how much people want shiny yellow metal or food preservative.

Printing money doesn't increase the amount of value. It merely spreads it thinner so that the economy (the underlying thing-of-value) can grow.

So, we don't limit the supply of currency in order to increase interest rates, we do it to allow the economy to grow. Interest rates are an indicator that this is (or isn't) happening.

Thesh wrote:Risks are only risky if you don't have positive returns and can't diversify.
You don't have any returns when you take a risk. You are merely hoping for returns. I lend you $500; I'm hoping that you will actually pay me back. When you break your arm and can no longer pay me back, it is me that's out the money.

Risk is risky. That's why it's a risk.

Thesh wrote:Given two investments that have an expected return of 5%, with one investment having a 50% chance of failure, and the other having a 1% chance of failure...
...you'll have a hard time selling anybody on the former. It's riskier, because of the risk. If you want somebody to take the riskier one, you'll have to pay them more.

But that's the wrong way to look at why risk is valuable.

Fred wants to run a hardware store, so he applies for a $100,000 loan to get started. There's some risk that he'll fail, but if he succeeds, he'll have a million dollar a year business.

Albert wants to run a hardware store empire. He envisions stores the size of football fields in every city! For this preposterous scheme, he needs $100,000,000 just to get started, but he's promising a return of... get this.... 500 stores, each doing $50,000,000 of business, and getting a huge bulk discount on everything they sell. Albert might fail too, and if he does, he'll fail bigger. He's more likely to fail, because after all, his idea is preposterous.

Susan has $10,000 to invest. She has to decide where to put her money. There's no reason to put her money in Albert's scheme, except for the awesome return on investment if he succeeds. She has to decide if it's awesome enough to take the risk.

She could lose it all. That's what risk is. It's risky.

There's a third choice. She could just invest in Lowes. It's already huge and successful. It has positive returns. It's much less risky. But, everyone knows this, so everyone wants to invest in it, so the returns are going to be spread out over many more investors. So, the (small) risk may not be worth the (small) net return.

That's why risk comes with a higher "expected" return. It's to get Susan to take the risk in the first place.

Thesh wrote:
ucim wrote:And that basis can have a long-term or short-term focus, a group focus or an individual focus

Why should it have any of those? You have to consider how your actions affect people in the short run and long run, both groups and individuals.
You just said it. You need to consider all these thnigs, but you also have to balance them in some way. You may have a different balance than somebody else would. And we don't "sacrifice stuff for the sake of inequality. Inequality is a natural consequence of life. Continually cleaning up inequality introduces other injustices. These all need to be balanced, and that balance is something that ultimately depends on your basis of morality.

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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 5:32 pm UTC

ucim wrote:
Tyndmyr wrote:Anyways, in your example, nothing injust has happened. Nobody has been forced into doing anything they didn't want to do. Some people are just dissatisfied with the result of their choices. From a Libertarian standpoint, everything is fine, and no change is necessary.
Is libertarianism also fine with the DeBeers diamond cartel? Because that is (absurdly simplified) the important part of what happened there. It created a huge inequality. Is this an inequality that (by libertarianism) is harmful and would need to be addressed?

While nobody was forced into doing anything they didn't need to do, unequal wealth has been created out of thin air, simply by convincing people that red stones were valuable.

Same questions to Thesh, from a socialism POV. No significant work was done to create this significant red-stone wealth, now held by one person.


The diamond cartel was created by, in part, killing a fuckton of people, and a lot of government intervention. They're pretty much the living definition of cronyism.

The advertising portion of it alone would not bother libertarians. Creating demand by advertising your product isn't morally bankrupt, and neither is making a profit by running a mining industry. However, using your government power to do a bit of genocide on your behalf qualifies as heinously evil.

Incidentally, capitalism/competition will be the ruin of this cartel. Lab grown diamonds are getting harder and harder to tell from the real thing, and despite all the attempts to stop it, it looks as if the "legitimate" diamond market is in for some trouble.

Susan has $10,000 to invest. She has to decide where to put her money. There's no reason to put her money in Albert's scheme, except for the awesome return on investment if he succeeds. She has to decide if it's awesome enough to take the risk.

She could lose it all. That's what risk is. It's risky.


As a practical way you could do this right now, the parent company of MoviePass is trading at 10 cents a share right now. Last October, it was $38 bucks and change.

If someone felt strongly about loaning money without making profit, they could buy shares at ten cents, and if it recovers, insist on selling them to the company for ten cents a share(plus inflation).

If one genuinely feels that the ridiculous risk of losing it all is not of importance, one could do that right now.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 5:48 pm UTC

I don't think the iphone would exist without wealth inequality; neither would SpaceX. To get these things, you need concentrated wealth under the control of somebody with vision.


And that's why you are an authoritarian.
Summum ius, summa iniuria.

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Re: Libertarianism

Postby ucim » Thu Jul 19, 2018 6:00 pm UTC

Thesh wrote:And that's why you are an authoritarian.
That word... I don't think it means what you think it means. Sometimes you need a boss with vision and backing. Movies are not directed by committee. When that starts to happen, the movie will probably end up crap. But sometimes you very much want "the little people" involved in the decisions. Governance comes to mind, although our last election makes me question this.

Life is complex.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 6:06 pm UTC

You need a strong leader with vision, who knows what's best for the people, because the people are incapable of acting in their own best interest without them.
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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 6:08 pm UTC

Thesh wrote:
I don't think the iphone would exist without wealth inequality; neither would SpaceX. To get these things, you need concentrated wealth under the control of somebody with vision.


And that's why you are an authoritarian.


That doesn't make Jose an authoritarian.

North Korea is authoritarian as hell, and has neither spaceflight nor a great deal of cell phone innovation. Authoritarianism alone does not get you a good economy(probably the opposite, honestly).

Advocating for innovation, startups, and industry is not the same as arguing for authoritarianism. It's a simple fact that if you have wealth equality, nobody has control of enough wealth to handle spaceflight. One would need to get a great many people all agreeing to work together on it, and I am unaware of any co-ops that have managed successful spaceflight. In this area, concentrated wealth enables the creation of specialized industry. The same same is true in many other industries. Anything that's specialized and capital intensive is going to be easier to start if one has investment to ease the starting process.

It's not that people in general are stupid, it's that not everyone in a society like ours can really understand everything. We need to specialize. It's okay for only a handful of people to understand space flight, instead of having to explain it to many people sufficiently for them to make an informed decision. The specialized person is not making the decision for the masses. He's making it for himself, but the existence of a widely varied, healthy spread of industries does benefit the masses.

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Re: Libertarianism

Postby Thesh » Thu Jul 19, 2018 6:10 pm UTC

Authoritarianism isn't a binary thing.
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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 6:16 pm UTC

Thesh wrote:Authoritarianism isn't a binary thing.


You're the one who wants the government to use it's authority to forbid loans unless they meet the specific, highly unusual requirements you set forth.

We're the ones saying "let them do whatever they want".

So, in this particular example, you are advocating for the authoritarian solution.

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Re: Libertarianism

Postby Pfhorrest » Thu Jul 19, 2018 6:18 pm UTC

Tyndmyr wrote:Ultimately, the world has a lot of Charlies at present, so if you're looking to sort out past wrongs, you end up committing a lot of injustice right now. You may legitimately punish a few Bobs, and help a few Alice's, but those are merely incidental, and the primary effect of the action is to commit injustice. You become a Bob.

The world also has a lot of Alice's. I was about to write "probably more Alice's than Charlie's", since the kind of injustices we're talking about usually benefit the few at the expense of the many. But really probably almost nobody is entirely "an Alice" or "a Charlie", rather we're each in some ways both, because this is an enormous mess, but the gist of the point remains that historical injustices have harmed many to the benefit of few, so helping the many at the cost of the few today is more likely (because we're just dealing with general odds, spread over this intractable mess of particulars) to end up redressing more injustices than creating new ones. You do end up creating new ones, sure, I'm not denying that. But in any case, you're either letting current injustices stand or making new ones, deontologically we're fucked no matter what we do, so it becomes a pure question of utility. Are you probably doing more to make more things better for more people, or not? Letting the current injustices stand and then just moving forward from there is a definite "not", because the vast majority of people are on the receiving end of those injustices to the benefit of a tiny few. Doing something, however imperfect, to try to redress things as we move forward is far more likely to end up doing more good than harm, even if it's still not able to do no harm at all.
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Re: Libertarianism

Postby Tyndmyr » Thu Jul 19, 2018 6:23 pm UTC

Pfhorrest wrote:
Tyndmyr wrote:Ultimately, the world has a lot of Charlies at present, so if you're looking to sort out past wrongs, you end up committing a lot of injustice right now. You may legitimately punish a few Bobs, and help a few Alice's, but those are merely incidental, and the primary effect of the action is to commit injustice. You become a Bob.

The world also has a lot of Alice's. I was about to write "probably more Alice's than Charlie's", since the kind of injustices we're talking about usually benefit the few at the expense of the many. But really probably almost nobody is entirely "an Alice" or "a Charlie", rather we're each in some ways both, because this is an enormous mess, but the gist of the point remains that historical injustices have harmed many to the benefit of few, so helping the many at the cost of the few today is more likely (because we're just dealing with general odds, spread over this intractable mess of particulars) to end up redressing more injustices than creating new ones. You do end up creating new ones, sure, I'm not denying that. But in any case, you're either letting current injustices stand or making new ones, deontologically we're fucked no matter what we do, so it becomes a pure question of utility. Are you probably doing more to make more things better for more people, or not? Letting the current injustices stand and then just moving forward from there is a definite "not", because the vast majority of people are on the receiving end of those injustices to the benefit of a tiny few. Doing something, however imperfect, to try to redress things as we move forward is far more likely to end up doing more good than harm, even if it's still not able to do no harm at all.


I agree with the assessment that, in some respect, we're probably all some combination of both, with regards to different bits.

I do not agree that you are innately helping more people today than harming them. If that were the case, would this logic not also apply to previous Bob's? Is the US government's actions toward native inhabitants justified based on the fact that those natives probably stole from one another? This isn't even hypothetical, this is a real excuse people have used.

See, there's no actual injustice being fixed, save potentially accidentally. Relying on prior wrongs to justify another one isn't deontologically correct. You are still committing a new wrong. You're not responsible for the ones that came before, but you're responsible for what you do now. Sure, fixing existing wrongs, where you can, would be virtuous...but a redistribution agenda is explicitly not doing that. It's making an entirely new order that has no relationship to fixing prior wrongs. Therefore, it is not justified in any way by those wrongs, and is no different from any other exploitative taking.


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