[Mazen]

Hi All,

As someone who is very much interested in political economy but who lack a basic understanding in "economic 101", I would like to ask the following question...

Just what exactly is "regulated capitalism"?

For example, in Canada, I know that alcohol is exclusively sold in specialized liquor stores. You will not find them at the supermarket or at a convenience store. The reason is because the government prohibits all but liquor stores to sell them. Is that a form of "regulated capitalism"?

If that is not regulated capitalism, then what do we call this form of economic policy?

In the United States and France, I learned that alcohol is not only sold in specialized liquor stores, but they are equally sold in supermarkets and convenience stores as well as in unexpected places. Is that a form of "deregulated capitalism"?

If that is not deregulated capitalism, then what do we call this form of economic policy?

I am giving the example of alcohol here, but this could be the case of any other commodity.

Your help would truly be appreciated.

Mazen

[Dr House]

Regulated capitalism is basically an economic system where the means of production are privately owned and operated, but where the government exercises a level of control over what a person can do with their property, how they can run a business, et al. This is done to accomplish various goals, including improving product quality, improving working conditions and limiting or reducing the harm done by porentially harmful products such as alcohol. Sometimes it is done with the purpose of improving the overall performance to the economy. Whether those goals are accomplished by regulation, worth the side-effects of it, or even desirable is subject to very heated debate.

There is no such thing as unregulated capitalism today, but capitalist nations vary in the size and scope of regulations they use, from very highly regulated economies such as Argentina or France to economies with very low levels of regulation such as Denmark, Hong Kong or the Bahamas. Canada and the US fall somewhere in the middle, and the US is markedly less regulated than Canada.

[Paradigm]

Denmark has low regulation? I thought all those Scandinavian countries were big-government social democracies.

[Dr House]

Denmark has insanely high taxes, but the Index of Economic Freedom has it pegged as more laissez-faire than even Hong Kong in 8 out of 10 indicators, the other 2 being taxes and government size.

[PredatorOC]

The problem with "regulated capitalism" and similar definitions is that they are quite ambiguous. And regulations always have unintended consequences, so while something may not have official regulations, it can still be affected by other regulations. Selling alcohol in any store might be allowed, but regulations on where you can maintain a store will still have an impact on where you can sell alcohol. Hence you can't sell alcohol out of the trunk of your car, for example. Not that I'd advocate buying or selling alcohol from the trunk of a car, but you know. You gotta do what you gotta do. Anyway: there is no such thing as "unregulated capitalism" as long as there is government intervention.

[SaulOhio]

A potential source of confusion here might be the difference between regulation and objective laws to establish and protect property rights, contract law, and to create basic rules of conduct on one hand, and regulations to tell businesses how to manage what they own.

A law banning the sale of liquor in grocery stores is a regulation of capitalism, since it violates the grocery store's right of free commerce, giving the liquor stored a monopoly.

I have three basic criteria for judging wether a market is free or not:

1: Anyone may own any means of production they can acquire honestly, by buying it, making it, or taking previously unowned resources from nature.
2: They may use such means of production to produce any goods or service they choose.
3: They may sell those goods and services to anyone willing to buy on any terms and at any price both the buyer and seller are able to agree on.

The government's role in a free market, and the purpose of any laws, should be to protect such freedoms, as well as the right to life, liberty and the pursuit of happiness. Anything that goes above and beyond that is regulation.

This is all basically a consequence of the basic idea of non-initiation of force and the right to private property.

[Dr House]

But at which point does it stop being "regulated capitalism" and become another system entirely, Saul?

[dwix]

2: They may use such means of production to produce any goods or service they choose.

Anything? Poison gas? Death rays? Mercenaries? Nuclear weapons? Toxic chemicals? Fake medicines? Unsafe vehicles?

Some of that needs to be regulated a little bit.

[SaulOhio]

2: They may use such means of production to produce any goods or service they choose.

Anything? Poison gas? Death rays? Mercenaries? Nuclear weapons? Toxic chemicals? Fake medicines? Unsafe vehicles?

Some of that needs to be regulated a little bit.

But manufacturing weapons to use in the initiation of force would be a violation of someone else's rights. There is the right to bear arms, but nuclear and chemical weapons? There is no legitimate self-defense need for such, and they can only be presumed to be intended to be used against whole populations as an initiation of force. So a ban on those would be an application of the principles I stated, not a violation.

It is not illegal to manufacture toxic chemicals, nor should it be. What you do with them is the problem. Releasing them into the environment where it can harm people and their property is a violation of rights, so banning that would be another application of the criteria I stated, not a violation.

Fake medicines is fraud, which is a violation of property rights, so "regulation" to prevent that would be another application of the criteria I stated, not a violation. (Yes, I sound like a broken record.)

People should be free to choose the level of safety vs. other features and cost of their vehicles. New, stricter safety standards have often caused an increase in the price of vehicles that motivated people to keep driving their old, less safe clunkers instead of buying a new car, thus causing more accidents. Its what we free market advocates call "unintended consequences".

DrHouse: Hard to say exactly. As long as people have some private property in the means of production, and they have at least some say in how to manage it, that is still some element of capitalism. But what you call systems with different levels and kinds of violations of property rights is pretty arbitrary. It may depend on what the rulers in charge are trying to accomplish.

[dwix]

I imagine the production of toxic chemicals would also be overseen, as they could potentially violate property rights? More importantly, how do you find out that things are bogus and unsafe without regulation, or would an overseeing body (think FDA) be admissible in your calculus? Why is there a right to bear arms, if people use weapons to kill others?

[SaulOhio]

If the intent is to protect people's property rights, the right to use your own property as you chose, then it is not regulation.

As for the right to keep and bear arms, the people who would use weapons to kill innocent people aren't going to obey gun control laws. This results in unilateral disarmament.

[pocket knife info]

I want to make my husband a small gift, he likes to go on a ribbon with his friends and I decided that a pocket knife would be a good gift for him.
But I do not understand anything about this, please tell me a good and inexpensive option that could become as a gift?

Thanks!