[Unthinking Majority]

A removal of privileges allows you more control over your life, liberty and property. It doesn't move control to someone else.

The important distinction is that the private sector equivalents do not rely on the use (and mis-use) of privileges and power over others.

You're ignoring the history of capitalism. Laissez-faire was tried, it was brutal and business exploitation was horrific, the market and consumer choice didn't correct it properly at all. Here's what occured in 19th century Britain:

Working conditions in factories

-Long working hours: normal shifts were usually 12-14 hours a day, with extra time required during busy periods. Workers were often required to clean their machines during their mealtimes.

-Low wages: a typical wage for male workers was about 15 shillings (75p) a week, but women and children were paid much less, with women earning seven shillings (35p) and children three shillings (15p). For this reason, employers preferred to employ women and children. Many men were sacked when they reached adulthood; then they had to be supported by their wives and children.

-Cruel discipline: there was frequent ""strapping"" (hitting with a leather strap). Other punishments included hanging iron weights around children's necks, hanging them from the roof in baskets, nailing children's ears to the table, and dowsing them in water butts to keep them awake.

-Fierce systems of fines: these were imposed for talking or whistling, leaving the room without permission, or having a little dirt on a machine. It was claimed that employers altered the time on the clocks to make their workers late so that they could fine them. Some employers demanded that their overseers raise a minimum amount each week from fines.

-Accidents: forcing children to crawl into dangerous, unguarded machinery led to many accidents. Up to 40 per cent of accident cases at Manchester Infirmary in 1833 were factory accidents.

-Health: cotton thread had to be spun in damp, warm conditions. Going straight out into the cold night air led to many cases of pneumonia. The air was full of dust, which led to chest and lung diseases and loud noise made by machines damaged workers' hearing.

-Wages were so low that there were stories of pregnant women giving birth down the pit one day and being back at work the next.

-There were stories of brutal discipline measures. Miners were paid by the tub and if their tub was underweight, they were not paid. There were fierce fines, and some miners ended a week's work owing the money to the mine owner.

-Accidents such as roof falls, explosions, shaft accidents and drowning were frequent.

-If a man joined a trade union, he was not only sacked but also blacklisted by all the mine owners in the area so he became unemployable. Many employees were required to sign ""the Document"" promising they would not join a union.

-In some mines, especially in Scotland, a miner had to sign ""the Bond"" before he was given a job, in which he promised not to leave for another job.

Why didn't the market correct these abuses? Why did the British government have to pass legislation throughout the 19th and 20th centuries to stop this abuse? They wouldn't need to pass such legislation if the market and consumer choice had corrected itself. Read the history for yourself: http://www.bbc.co.uk/schools/gcsebitesize/history/shp/britishsociety/livingworkingconditionsrev1.shtml

Similar things happened throughout western capitalist societies and continue to occur in developing countries. Libertarians give far too much credit to people as consumers, nobody on earth has enough time in the their day to become fully informed about every consumer choice they make (let alone the masses), nor is all information about all transactions available to the masses. Libertarians also don't give enough credit to businesses in their ability to fool consumers, hide things from them, and exploit their workers. Libertarians also don't comprehend that markets aren't perfectly efficient and new businesses often don't spring up quickly to act become competitors and act on the demands that consumers want. Starting a business takes time, money, labour, and other resources that aren't always available quickly or even at all given certain market situations where the barriers of entry for new businesses into a sector are too high.

Economic Libertarians and free-market advocates live in a fantasy land of flawed theory that's been disproven time and again in the real course of history. You and Eran and everyone please stop talking theoreticals and give real historical examples if you want to convince me or anyone.

[Eran]

Can you be more specific?

How can economic deregulation not give more power to capitalists over workers and consumers etc? Yes there are some areas where government regulation props up certain corporations etc. aka "privileges", but many areas where regulation protects consumers and workers.

Regulations don't "protect" consumers and workers, but rather limit their options. Since no worker and no consumer can be forced to interact with an employer or a producer, they only interact with those out of choice. Thus all regulations do is prohibit some interactions that workers or consumers would voluntarily choose to engager in, if it weren't for the regulation.

Regulations, further, are routinely captured by industry participants. They are designed to make it difficult for competitors, whether current or potential, from entering the industry, thus reducing choice and increasing cost to consumers (or lowering wages to workers).

The libertarian alternative to government regulations is the free choice of workers and consumers. In many cases, workers and consumers already possess all the knowledge they need to decide whether to accept offers of employment/consumption. For example, there is no need to guarantee vacations, maximum working hours or minimum wage to workers - any worker can choose not to accept offers not meeting whatever minimum demands the worker has. Alternatively, a worker can make choices, e.g. accept a low-wage job that gives her experience and skills. Or accept a job offer that offers fewer vacation days but higher pay. Regulations rob workers of those choices.

Similarly for products - consumers can choose not to buy products they don't feel comfortable with in terms of safety, quality, efficacy or any other dimension. If consumers lack the knowledge, they can insist on only purchasing those products for which the knowledge is made available by the producer/retailer.

The reason fast-food restaurant chains are so popular is that they give consumers important knowledge regarding the quality to be expected in the establishment. This is what brand-building is all about. It can and does extend to safety as well as quality.

Eran has put forth the hypothesis that regulation specifically for the purposes of protecting consumers and workers can be done by private sector equivalents, but Eran has not shown that such regulation already is being done by private sector equivalents.

Correct. With some exceptions, government regulatory activity displaced private alternatives. However, it is easy to show how one can smoothly and safely transition from the former to the latter. For example, consider the following phased approach:
1. Allow sale of unapproved products, conditioned on their stating, in very clear way, the fact that they aren't approved.
2. Allow only approved products to carry a clear logo indicating the fact they are approved
3. Have producers and/or retailers of approved products pay the regulatory agency for the privilege of showing the logo, replacing that payment as the funding source of the agency
4. Privatise the agency, while allowing competitive agencies to sell their own certifications
5. Eliminate rule 1, after engaging in an educational campaign to warn consumers against the risks associated with purchasing an uncertified product.

Underwriter's Laboratory is involved in safety regulations, but they are non-profit, and they don't actually set regulations by themselves. They are often invited to help form regulations by different regulatory bodies due to their long experience testing products for safety. That is what they mostly do: test products to see if they meet the regulations.

Private sector doesn't necessarily mean for-profit.

No. That is only one of the things you need to have a market. You also need customers who can pay, and you need a gov't stable enough to enforce property law. Starving people in developing nations have a desire they cannot meet themselves: food. However, because they are too poor and there is a civil war going on, the other two conditions are not met.

You do need property rights protected, though whether that is done by government or not is a separate question.

Obviously, not all consumer desires can be met, whether it is starving people desiring food, or myself desiring a private jet.

However, Voluntarism's point shouldn't be dismissed. It is a very important one.

Every so-called "market-failure" is also a profit opportunity which entrepreneurs, in a free market, are likely to jump on. An excellent example are used-car-testing services helping to cover the asymmetric information problem between used car buyers and sellers. The safety certification agencies we have been discussing would constitute another example.

You're ignoring the history of capitalism. Laissez-faire was tried, it was brutal and business exploitation was horrific, the market and consumer choice didn't correct it properly at all.

I don't think we are ignoring the history, though we may have a different perspective on it.

19th century working conditions in factories would be considered inferior from a 21st century perspective, or from that of the British upper classes who may have been unfamiliar with the lives of the lower classes. But they weren't actually worse (all things considered) than those of the lower classes before the industrial revolution. In fact, the industrial revolution quickly and dramatically improved the standard of living of British and then American workers.

To the extent that 19th century Britain was truly Laissez-faire, the readiness of workers to accept factory jobs (comparable to the readiness and even eagerness of today's Chinese or Vietnamese peasants to accept such jobs) is a clear indication that those jobs, from the perspective of those workers themselves, are superior to any alternative available to them.

If you believe that field closures were an important factor in driving peasants to the factories, than such actions were unlibertarian, and thus made the move irrelevant as a model for libertarian policies. If you don't believe such coercive actions were a dominant factor, you must explain why workers chose to work under those conditions.

Why didn't the market correct these abuses? Why did the British government have to pass legislation throughout the 19th and 20th centuries to stop this abuse? They wouldn't need to pass such legislation if the market and consumer choice had corrected itself.

The market did correct these abuses (or, more accurately, improved workers' conditions to the point that such abuses wouldn't be tolerated). The difficult conditions you describe are inseparable from the poverty (by today's standards) of the workers of the time.

Libertarians give far too much credit to people as consumers, nobody on earth has enough time in the their day to become fully informed about every consumer choice they make (let alone the masses), nor is all information about all transactions available to the masses.

And non-libertarian give far too much credit to people as voters, nobody on earth has enough time in their day to become fully informed about every voting choice they make. In fact, people are much better informed, for obvious reasons, about their own consumption choices than about the political choices they make, or which are made on their behalf.

Moreover, there is little need for individual consumers to become very knowledgable. Producers and retailers offer standardised products designed to appeal to as many consumers as possible. As such, they relieve most consumers from the need to become fully informed. For example, I have no idea how much a gallon of milk costs in my local supermarket. I would probably buy exactly as much milk as I do now if the price was 10% higher. Why doesn't the supermarket raise its price by 10% then? Because while I am indifferent to price, many other consumers aren't. And the supermarket, in its attempt to appeal to them, benefits me as well.

The very same holds with respect to less visible features such as quality and safety. When making a major purchase (say a car), I will look at safety ratings of different models before making my choice. When it comes to minor purchases, I am happy to rely on brand names, either at the retail or producer level, as reasonable proxies for quality.

Libertarians also don't comprehend that markets aren't perfectly efficient and new businesses often don't spring up quickly to act become competitors and act on the demands that consumers want. Starting a business takes time, money, labour, and other resources that aren't always available quickly or even at all given certain market situations where the barriers of entry for new businesses into a sector are too high.

You are, of course, correct that markets aren't perfectly efficient, though why you think libertarians believe that is beyond me. Markets aren't perfectly efficient, but then neither is government. Perfect efficiency isn't an available option to us mortals.

New businesses don't spring up instantaneously, and neither do new political parties or even credible politicians in response to changing voter preferences. By removing unnecessary impediments from new businesses, however, we can allow the market to be as efficient as possible. Such impediments include growing mountains of regulations, taxes and labour regulations.

You and Eran and everyone please stop talking theoreticals and give real historical examples if you want to convince me or anyone.

As a rule of thumb, you will observe:
1. There is a high correlation between the degree of economic freedom and economic prosperity. That can be observed in similar nations at the same time (South vs. North Korea, West vs. East Germany, Chile vs. Venezuela) and the same nation changing attitude (China in the early '80s, India in the early '90s).
2. There is a high correlation between government involvement and stagnation or instability, and negative correlation between government involvement and innovation and growth.
High government involvement industries include banking, education, health-care and transportation
Low government involvement industries include technology, popular art/entertainment, religion (in the US).

[Pants-of-dog]

Correct. With some exceptions, government regulatory activity displaced private alternatives. However, it is easy to show how one can smoothly and safely transition from the former to the latter. For example, consider the following phased approach:
1. Allow sale of unapproved products, conditioned on their stating, in very clear way, the fact that they aren't approved.
2. Allow only approved products to carry a clear logo indicating the fact they are approved
3. Have producers and/or retailers of approved products pay the regulatory agency for the privilege of showing the logo, replacing that payment as the funding source of the agency
4. Privatise the agency, while allowing competitive agencies to sell their own certifications
5. Eliminate rule 1, after engaging in an educational campaign to warn consumers against the risks associated with purchasing an uncertified product.

I think that your claim that government regulatory activity displaced private alternatives is not historically accurate.

Secondly, while it is possible that the above scenario could happen, it is also just as possible that the proletariat awakens to class consciousness, seizes the means of production, yadda yadda yadda. You have not shown that such regulation already is being done by private sector equivalents.

Private sector doesn't necessarily mean for-profit.

That's true, but it is important to note that creating regulations is not a business that actually makes any money. Thus, expecting the market to do it is illogical.

You do need property rights protected, though whether that is done by government or not is a separate question.

Obviously, not all consumer desires can be met, whether it is starving people desiring food, or myself desiring a private jet.

However, Voluntarism's point shouldn't be dismissed. It is a very important one.

Every so-called "market-failure" is also a profit opportunity which entrepreneurs, in a free market, are likely to jump on. An excellent example are used-car-testing services helping to cover the asymmetric information problem between used car buyers and sellers. The safety certification agencies we have been discussing would constitute another example.

Every so-called "market-failure" is not a profit opportunity if there isn't any profit in it. The libertarian argument rests on the assumption that creating and enforcing regulations is inherently profitable. It does not seem that way in real life, though.

[Voluntarism]

That's true, but it is important to note that creating regulations is not a business that actually makes any money. Thus, expecting the market to do it is illogical.

Neither do meals-on-wheels, soup kitchens or Saturday morning kids sports activities. Just like the Friendly Societies created not for profit welfare and insurance agencies, the demand for these other activities are met by people willing to participate with their time and labour as well as the unavoidable small amounts of money required.

Expecting people to have substantial desire to obtain something and to sit on their hands when it is in their power to obtain it is also illogical.

[Pants-of-dog]

Neither do meals-on-wheels, soup kitchens or Saturday morning kids sports activities. Just like the Friendly Societies created not for profit welfare and insurance agencies, the demand for these other activities are met by people willing to participate with their time and labour as well as the unavoidable small amounts of money required.

Sure. Please note that none of these groups are market based groups. They are charities. These exist in every culture and society and ideology.

You said the following:

Where there is a desire that you cannot meet yourself there can be a market.

Now you seem to be saying that where there is a desire that you cannot meet yourself there can be a market, but if there is not one, then there is a charity.

This seems a little closer to the truth, don't you agree?

We could take it a step further and create a sort of list:

Where there is a desire that you cannot meet yourself there can be a:

-market, or
-charity, or
-a social safety net or
-a desire or need not being met.

Expecting people to have substantial desire to obtain something and to sit on their hands when it is in their power to obtain it is also illogical.

Can you explain how this truism relates to the topic, please?

[Voluntarism]

As Eran said - Private sector doesn't necessarily mean for-profit. You even explicitly agreed with him but now you are making the illogical jump to charities does not equal private sector. Charities and other not-for-profits meet desires just like "for-profit" businesses meet desires. There is a market for the outputs of not-for-profits as well as for the scarce resources that go into them. I would not have been willing to supply my time-scarce labour to meal-on-wheels in the past if I did not see my desires being met. Indeed I joined them from a less efficient, badly run alternative which did not provide as much value.

The "truism" was in response to your assertion that people would not be willing to create a not-for-profit for regulatory/information reasons despite there being a real and present demand for one. People do this already on lots of issues. Where there's a demand there is an innovative business model waiting to be applied to meet that demand, whether it's for profit or not for profit, with large $$$-based purchases or large time-based costs. As Eran has already pointed out, there are plenty of actors that naturally have incentives to obtain the certification services - both as buyers and as sellers - or to simply do it in-house as a cost of transacting - both as buyers and as sellers.

[Pants-of-dog]

As Eran said - Private sector doesn't necessarily mean for-profit. You even explicitly agreed with him but now you are making the illogical jump to charities does not equal private sector. Charities and other not-for-profits meet desires just like "for-profit" businesses meet desires. There is a market for the outputs of not-for-profits as well as for the scarce resources that go into them. I would not have been willing to supply my time-scarce labour to meal-on-wheels in the past if I did not see my desires being met. Indeed I joined them from a less efficient, badly run alternative which did not provide as much value.

Since you were discussing profit as a motive for the market to address unmet desires, I thought it was important to point out that these people who address these unmet desires are not profiting, and thus the profit motive is not the important factor.

The "truism" was in response to your assertion that people would not be willing to create a not-for-profit for regulatory/information reasons despite there being a real and present demand for one. People do this already on lots of issues. Where there's a demand there is an innovative business model waiting to be applied to meet that demand, whether it's for profit or not for profit, with large $$$-based purchases or large time-based costs. As Eran has already pointed out, there are plenty of actors that naturally have incentives to obtain the certification services - both as buyers and as sellers - or to simply do it in-house as a cost of transacting - both as buyers and as sellers.

Okay.

If that is the case, then why did the free market not develop regulatory systems comparable to the ones we now have that gov't has instituted?

It cannot be because gov't has created a monopoly, since private sector regulation makers and enforcers exist, in the form of Factory Mutual and Underwriters Laboratory. I am using US companies for ease of argument, but feel free to use examples from other countries.

[Unthinking Majority]

As a rule of thumb, you will observe:
1. There is a high correlation between the degree of economic freedom and economic prosperity. That can be observed in similar nations at the same time (South vs. North Korea, West vs. East Germany, Chile vs. Venezuela) and the same nation changing attitude (China in the early '80s, India in the early '90s).

This is an exaggeration and over-simplification of international economy. If you actually look at statistics like the GDP-per-capita growth rates of countries, you will see that countries like in most of Latin America and Africa which greatly liberalized their economies in the 1980's and 1990's at the behest of the IMF and World Bank took a nosedive in GDP growth, and most sub-saharan African countries actually experienced negative GDP growth per capita in the 80's and 90's because their economies were dangerously exposed to international markets and corporations which used their power to exploit these developing countries to their advantage and to the detriment of the African economies. Only since the 2000's have sub-Saharan African countries seen positive growth again for the first time since 1970's with a reverse of neoliberal free-market policies and a more balance approach of market integration alongside government regulation to protect certain sectors and aspects of the economy from foreign exploitation.

Very similar has happened in Latin America, where they experienced negative growth in the 80's compared to strong growth in the 70's and are only now starting to see growth rates return to that point. Cuba has actually been one of the very highest growing economies in Latin America since the 80's despite a trade embargo from the world's biggest economy and still has higher GDP-per-capita rates than the vast majority of L.A. countries. From 2001-2010, Cuba had a higher GDP-per-capita growth rate than every single Latin American/Caribbean country (in most instances in wasn't even close) with the exception of Trinidad and Tobago (which narrowly edged it out). Cuba's economy far out-performed countries like Mexico, Brazil, and Chile.

Ronald Reagan and Marget Thatcher's push for neoliberalism in the developing world during the 80's was absolutely devastating for developing countries forced to follow as a condition for debt relief, while Asian countries such as South Korea and China, who liberalized their markets slowly and with government controls over key aspects, experienced the highest growth in the developing world by far, as they were not bound by western-led liberalization.

I'm not arguing for communism, since many communist countries have also crippled their economies (ie: N.Korea), but i'm saying that severe market liberalization for poor countries without proper government regulation to protect their economies can and usually has crippled their economies because foreign interests enter these economies and exploit them. Nothing I've wrote here is controversial, it has been written about by PhD's in thousands of scholarly peer-reviewed journals and books on economic development. If you don't believe me, research neoliberation over the past 35 ywars, and look at the stats yourself:
http://www.ers.usda.gov/datafiles/International_Macroeconomic_Data/Historical_Data_Files/historicalRealPerCapitaGDPValues.xls

and http://www.ers.usda.gov/data-products/international-macroeconomic-data-set.aspx#.UyCsL4UcXfU

[Voluntarism]

RE Cuba. Let's ignore any issue regarding the reliability on the national accounts of a country like Cuba (just ask Paul Samuelson and how he got caught out by believing the USSR data) and take the United Nations data at face value. http://unstats.un.org/unsd/snaama/introduction.asp

We'll also ignore the fact that most South American countries are hardly bastions of economic freedom, with only 3 (of the 29 South American countries ranked) achieving a score in 2014 of "Mostly Free" http://www.heritage.org/index/ranking. Although many have had falling scores since this particular index started in 2010, Cuba has actually had a rising score. As theory would suggest, a growth in freedoms from any level would be expected to lead to a boost in growth (although typically with a lag but it depends on the nature of the change in freedoms).

In 1970 Cuba had the 18th highest GDP/capita of South and Central American countries out of 38.
In 2012 Cuba had slipped to 26th place out of 38.
The average annual growth of Cuba's GDP/capita over this time frame was 31st out of 38.



As a simplistic measure, we can graph the most recent GDP/capita against the economic freedom index for South American countries and we obtain the following:


So even without drilling down into the specific circumstances of each country and finding out what sorts of freedoms and controls they have and the history of those same freedoms/controls along with their comparative advantages, there is a trend. This can be repeated at the international level as well with places like North/South Korea, Hong Kong/Taiwan/China etc providing excellent case studies.

[KPres]

nm

[Rich]

Between 1780 and 1830 the agricultural population of Britain increased by a million. While posters will know I'm the sworn enemy of Libertarianism, I'm also opposed to parasitic trade unions. Until modern times life was pretty much a zero sum game. Population increased to soak up any productivity increases, forcing the surplice population on to marginal land and reducing the average acreage per peasant.

The United States didn't suffer the same conditions under industrialisation. The united States had a winning but unrepeatable formula. Find the best piece of real estate on Earth exterminate the inhabitants and then settle it allowing oodles of land for every settler. In America peasants weren't forced off the land into factories by land shortages, they had to be enticed off the land with high wages. its good to have regulations and wealth redistribution in prosperous societies, but it is productivity that allows that. The average person in Britain in 1840 was bound to be poor because average productivity was low, no amount of unions or socialist government could change. The average White person in America in 1840 was significantly richer because of extensive agriculture and extensive exploitation of other natural resources as well as the use of slave labour. It wasn't rich because of any sort of liberal non aggression principle. White Americans got rich on aggression. It wasn't rich because of the Constitution crafted by the Southern Slave Lords like Thomas Jefferson.

Both Progressives and Libertarians are fundamentally wrong.

[Eran]

Both the US and Latin American countries had a similar start whereby white Europeans, often importing black slaves, colonised a continent while completely ignoring the rights of the natives.

Yet the US is much richer than its Latin American neighbours. That proves that American prosperity is not based on aggression.

Nor was did it get rich due to natural resources (Russia and many African countries are much poorer than Japan or Switzerland, despite having much more valuable resources under their soil).

In fact, economic freedom is the only consistent explanatory factor behind national prosperity. It works in different ways, and isn't always easy to measure. But if you look at the "big picture" of global development, it is unmistakeable.