Politics Discussion Thread (Heated Arguing Warning)

[scooter]

 From what I've read, the California exodus is more conservatives fleeing the liberal madness.

http://worldpopulationreview.com/states/...opulation/

Or it's a thing that doesn't exist.

[Mr. Cairo]

This is a fine set of beliefs for someone under 20, it comes from the right place and has the right goals. The means to getting there are very confused, though, and generally people come to realize that once they have had more practical experience with human decision-making, especially in an organisational context. And that's a better way to understand the weakness of the position than any economic theory. I mean, sure, you can talk about bureaucracy being inefficient, and the market being a valuable coordinating mechanism that passes information about needs and abilities, ensuring that labour is allocated exactly where it's demanded, but none of that is nearly as convincing as experience is.

But it could help to just think through the practicalities. What you are imagining as a solution is largely a projection of how things are, under assumption that they could be just like that without the market. Same products, just in the "right" hands. They couldn't be, getting the right products to the right hands is an enormous challenge and the government is not at all well suited to meeting it. Who would decide how many houses to build, and of what type? How many competing designs would they try? How would they know which design actually fulfills the people's needs best? What space would be left for a person that doesn't care much about housing, and is prepared to live almost in a capsule, as long as he can go out and socialize in as expensive places as he can afford? It's even worse with clothing -- what clothes, how many, which colors, who gets to call all these production shots?

The bottomline is that the world as it is broadly works. It works exactly because of, not in spite, the market. We know that because for the longest time in human history there were no markets, and we know exactly the effects of that. People who get badly done in this system exist, but they are relatively few. Undoing the entire system (and that's what you are proposing, at least for a very large section of the economy) wouldn't help them much, but would hurt the majority a lot. The benefit side of your proposition is fine, but you now need to come to grips with its costs.

What I wrote about the market was written in the first place in response to Mr Cairo. He explicitly advocated removing the market entirely, as a 'middleman' that has no value. I don't know what the hell you read into my comments, but clearly not anything to do with the discussion we were having. I said nothing about the market being 'efficient', whatever that means, nothing about to what extent and whether it should be regulated, I made no argument for a radical free-marketeerism. All I said is that the market, as an overall approach, solves a problem that the government, as an overall approach, is ill-suited to solve. Mr Cairo explicitly advocated for a command economy in basic goods, not a controlled market in them.

You misinterpreted what I was suggesting Bacchus. The "middleman" I was referring to are the recipients of welfare, not the free markets. The recipients of welfare, being spread out and poor, lack much purchasing power to avoid getting screwed over by those selling them the necessities they need to survive.
Which is why it is cheaper to eat fast-food than shop for healthy food, why clothes and other products sold to them are designed to fail in a short time, forcing them to buy them again, landlords are able to screw their poorest tenants (sometimes literally) and predatory lenders, legal or otherwise, find a ready supply of desperate people they can ply their trade on.
A government buying the basics on behalf of millions does have purchasing power. That's why the same drugs or medical equipment has a cheaper unit price in the UK than in the US; the NHS is buying for the whole country, and can often set it's own price, while in the USA, companies are selling to competing hospitals, and the position is reversed.

You speak of the practicalities of my suggestion as though nothing approaching this has ever been tried before. Governments build housing for their poorest citizens all the time, in the UK, USA, Canada, Brazil, Japan to name a few. Sure, maybe those who live in them do not necessarily get to live in the house/apartment of their dreams, but at least they have a house/apartment, and they know they're not going to get kicked out if they lose their job, or the landlord increases the rent suddenly. The same would be true of clothes and food. It may not be exactly what the recipients want, but at least its quality can be ensured.
If someone wants a better house or different clothes or different food, they can go out and work for it. The market is a necessary component in such a system, the only difference is there is no longer a desperate underclass to exploit.
Companies that offer shit wages and treat their employees like crap will soon find themselves without employees, since no-one is so desperate to pay their rent or feed their children that they'll put up with it. Those companies will lose out on employees to competitors and will thus be forced (by the market) to change their practices.
That is an example of the market correcting itself that simply does not happen right now. My idea aims to remove that desperate underclass, and give market power back to the poorest members of society, so they have an actual chance to stop being the poorest members of society. In no way am I suggesting removing the market altogether.



As an aside, I'm also curious as to your suggestion the market is a very recent phenomenon. Trade and exchange of goods (and people), sometimes unregulated by any government, sometimes carried out by a government, has been happening for thousands of years.
For example, a quarry site in North Dakota provided high quality flint (known as Knife River flint) for 10,000 years, and tools made from it have been found at archaeological sites throughout North America, for New York to New Mexico and in northern Canada. In the Mediterranean, Obsidian (volcanic glass) from a few small islands was extensively traded throughout the Neolithic and Bronze Ages.
For more direct evidence regarding ancient trade I would suggest you look into the tablets found in the Assyrian trading quarter (karum) of the Hittite city of Kultepe (in modern Turkey). They describe (part of) a pretty well-established trading network, the basis of was a demand for tin in Anatolia (which the Assyrian merchants acquired from somewhere else, since they had no native source either). Assyrian textiles were also highly prized in Anatolia, despite Anatolia having no shortage of wool or other fabrics.
These merchants were independent of any government body, they had no government support, sought to find the best deals they could, and avoid what taxes they could. They even cheated each-other, here's a letter from two creditors back in Assyria to a merchant in Kultepe: "Thirty years ago you left the city of Assur. You have never made a deposit since, and we have not recovered one shekel [unit of weight] of your silver from you, but we have never made you feel bad about this. our tablets have been going to you with caravan after caravan, but no report from you have ever come here." And all this before currency had even been invented.

Really, the idea that the market is a recent invention is simply untrue.

And no, Bacchuss, I'm not under 20, but thanks for patronising me.

[SevenSpirits]

The midnight run isn't the problem, it's the symptom and the observational proof that illustrates how poorly people will plan.  The argument is that people spend their own money on frivolous items, leaving nothing but the state backstop to support the baby.  This is indistinguishable from lacking that money in the first place, unless we gate those benefits on a personal financial probe and audit.  We have the political will to force the state to enact that backstop (the horror of starving babies) but not to grant it the investigative power to stop abuses or the coercive power to nationalize child rearing.

Now that I worded it that way, the same contradiction occurs for health care.  Squandering the money for self-care is indistinguishable from never having it.  We have the horror-led will to force the state to provide a backstop but not to grant it the coercive power to set its price.  The latter is why nationalized health care works in other places.

T-hawk, I'm disappointed in you.

Judge systems based on their adverse effects, sure. But don't judge people whose situations you don't know or understand. You're making a lot of unfounded assumptions about these people. They may or may not be making optimal choices for their situation. You can't tell based on the anecdote provided.

It's also not clear whether you understand baby formula is a completely optional breast milk substitute and in your terms therefore qualifies as a "frivolous item".

[MJW (ya that one)]

https://www.cnbc.com/2018/03/19/californ...state.html

It's actually lower income CA's that are moving. People just don't like moving so the people who do are the ones who cannot take the costs. I think lower income is much better for the GOP then welfare so I think it would be around a 50/50 split. So there is an exodus from CA; not just a conservative one.

[wetbandit]

Lots of people are leaving here, lots of people are coming here. There is a net loss in population according to these figures the Legislative Analyst's Office puts out. The people who are coming here have higher incomes, people who are leaving generally do not and apparently are younger.

http://lao.ca.gov/LAOEconTax/Article/Detail/265

Edit: California has a net loss in population in domestic migration. I have no idea if the population is rising significantly because of legal and illegal immigration.

[Bacchus]

You misinterpreted what I was suggesting Bacchus. The "middleman" I was referring to are the recipients of welfare, not the free markets. The recipients of welfare, being spread out and poor, lack much purchasing power to avoid getting screwed over by those selling them the necessities they need to survive.

Sorry for the misunderstanding, you are quite right that I didn't take your point. This is a fair observation, and the government as a bulk purchaser/distributor of items would hold some water, but at the end of the day, giving purchasing power to the government is not giving purchasing power to the poor. The are at least three broad problems with this approach:
a centralized system leaves the alleged beneficiaries entirely beholden to it, and there are no competitive pressures for the system to improve itself;
the competitive pressure on suppliers would transform from best serving the customers to best serving the government procurement officials, having the right contacts in the right places, if not outright corruption, would become a key part and cost of doing business;
to the extent the government order is large enough to exert market power, it is large enough to move the price arbitrarily and away from efficiency, not to mention collapsing the distribution of prices into a single one, thus screwing people who'd prefer a different price/quality trade-off.

We also have to be careful here -- you make a different proposal as well, which is the government engaging in some ad hoc procurement here and there, which is just pure redistribution, and a different argument than the market power one. Your cited examples of governments building affordable housing fall into this category, where government contracts constitute less than ~20% of the entire construction market, the government isn't really getting a better deal on behalf of the poor, even in the best case.

Also, let's look at reality. Do the clothing and food retailers not already work on very thin margins? What evidence do we have for the poor with being screwed by market power in those sectors? How much of a further discount do you really think there is to be had against the goods in Costco? If these sectors are competitive, giving money to the poor will work just fine, and they would be able to buy the goods they want, in the combinations they want, in the variety they want, and we don't need to pay the overhead for the government procurement and distribution (which, as you can imagine, won't be anywhere near as efficient as Costco's).

Housing is a bit of a special issue, residential land supply is fixed, city centres can only hold that many people, and housing is linked to provision of utilities, which tend to be a natural monopoly. I'd say there is properly a much bigger role for the government in housing than in food, but interestingly enough many existing housing problems are clearly problems of governance failure, not market failure or market power. US is particularly chronic in this. To quote one typical study:

Land use planning and regulation in American municipal governments often appears structured to permit the maximum amount of corruption possible.[1]  Developers[2] and other contractors[3] are typically expected to pay exactions or make political campaign contributions to politicians who possess the apparent power of blocking or facilitating development and public contracts.[4]  In Los Angeles, it appears that there is an understanding among members of the city council that they will typically defer to the council representative from the district where the development is proposed on zoning matters, such as proposals for zoning amendments, variances, subdivisions, or site plans.[5]  This allows legislators to have free reign over whether the project is approved and thus facilitates corrupt exactions as a price of development.  In Philadelphia, at least before that city’s recent overhaul of its zoning code,[6] zoning and other regulatory measures prevented developers from enjoying any development of right, whereby a developer would be informed from codes that a certain type and intensity of development was permitted.  Instead, the codes were so prolix that every development project required the equivalent of a variance,[7] and thus the system encouraged political exploitation of developers.  Typically, and in every jurisdiction, all but the smallest of projects requires some form of discretionary approval in the form of subdivision, site plan, variance, plan or zoning amendment, thus facilitating political exploitation.

Really, the idea that the market is a recent invention is simply untrue.

Voluntary exchange itself is of course as old as speech. The legal framework that systematically protects voluntary exchange as a universal right of individuals, not to be interfered with unless in presence of a special cause -- that's very new. Trade is just too profitable to have been left to its own devices, most trade in history has been highly regulated once statehood emerged. This was really no different from any other activities, most states throughout most history sought to regulate all human behaviour — what to wear, who to pray to, even where to be. So there were markets, but they were rarely free.

These merchants were independent of any government body, they had no government support

This is a very strange characterization of Mesopotamian political economy. The general understanding among historians of the period is that economies of that period and that region are best characterized as 'palace', or 'temple' economies, where a single central institution at least notionally controls the vast bulk of significant economic activity and redistributes goods and engages in long-distance trade through its agents. Proof:

Also: https://dash.harvard.edu/bitstream/handl...sequence=1, which advocates for as "entrepreneurial" an interpretation as I have met anywhere, only manages to come up with this:

On the one hand the state administered trade and rigidly controlled the merchants activity. The state would provide the merchant with goods to be traded for specific commodities in distant communities. Upon the completion of the trading mission the administration would enter the value of goods sent and those obtained in order to maintain a balanced account. If entering and exiting values could not be reconciled, i.e. if their was a deficit, it would be subtracted from the next account. The system allowed for considerable elasticity. The administration would lack precise knowledge as to the rates of conversion used for specific goods in distant lands. There was room for merchant ‘profit’ even in administered trade. The state, on the other hand, was minimally concerned with profit. Its interests lay almost exclusively in assuring a guarantee that its procurements were met. The state gave fixed values to good. Prices were conceptualized as innate and immutable. Only goods subject to a seasonality of demand, i.e. cereals and animals, were prices subject to seasonal fluctuations. The behavior of the merchant, unattached to the central administration, was completely different. Once he departed with a consignment of goods, i.e. textiles, his sole concern was to maximize profit. Administered trade, controlled by the state, and private enterpreneurial ventures easily coexisted in the complexity of Mesopotamia’s commercial complexity.

But ancient history is an odd and uncertain thing. We have a much better direct understanding of how markets came to be free in Europe, and then in the rest of the world, largely over the course of 18-19th centuries. Before then people could mostly trade only in specific places, only on certain days, and only in certain goods. In most cases, not even all people were allowed to do that, in France to work as a trader in Paris you had to be a registered member of an appropriate parisian guild, and even that only gave you the right to trade in a specific range of goods. There were massive political battles over which guild would receive the right to trade which good, when new goods, like umbrellas, appeared. There were also internal customs, in France's case run as a private enterprise. And then of course there was international trade -- that was frequently done through monopolies, of which East India companies are best known. Normally international traders had to obtain two sets of privileges actually -- one from their domestic power, one from whoever they traded with. The case of Japan is the most famous, where only the Dutch were allowed to trade, and only in Nagasaki. That was a particularly restrictive set-up, but not all unusual in its general nature. The Dutch, of course, were at the forefront of breaking this mold, allowing all their citizens to trade freely, and protecting all foreign merchants based in Amsterdam equally, but that was very much an innovative thing to do -- and with fantastic results to show for it in terms of prosperity.

[T-hawk]

Judge systems based on their adverse effects, sure. But don't judge people whose situations you don't know or understand. You're making a lot of unfounded assumptions about these people. They may or may not be making optimal choices for their situation. You can't tell based on the anecdote provided.

I'm making no claims about the proportion or number that make optimal choices.  Maybe many do.  But there will be some amount who don't.  What do we do about those? Specifically when community and voluntary charity efforts don't come to be?

It's also not clear whether you understand baby formula is a completely optional breast milk substitute and in your terms therefore qualifies as a "frivolous item".

It's not always optional; some women are advised of medical reasons not to breast-feed.  Drug addiction is one notable one.

At any rate, the formula itself is metonymic, the point is the general idea of feeding and supporting babies.

[SevenSpirits]

Judge systems based on their adverse effects, sure. But don't judge people whose situations you don't know or understand. You're making a lot of unfounded assumptions about these people. They may or may not be making optimal choices for their situation. You can't tell based on the anecdote provided.

I'm making no claims about the proportion or number that make optimal choices.  Maybe many do.  But there will be some amount who don't.  What do we do about those?  Specifically when community and voluntary charity efforts don't come to be?

Here's my generous response:

I think this is a really bad argument. When you look at any large system, there will be some amount of stuff going wrong. Focusing exclusively on that small proportion of worst cases is not going to inform you well on how to run the system for best performance overall.

It does seem useful to look at widespread patterns of stuff going wrong. That's what it sounded like you were implying was happening in your earlier posts: poor people in general mismanaging their finances to the detriment of their children. But if you aren't even making any claims about how much of a problem this is, why are you bringing it up at all? How can you justify advocating for societal change to fix a problem that you think probably exists to some unknown extent based on an anecdote?

Humans have never had a deficit of ability to notice when others are making bad choices and criticize them for it. The hard part is designing a good system that fixes the problem (as I know you understand, since you are criticizing the current system). What are you offering that's better than the status quo? If the problem is "being a child of some people is less nice than being a child of other people", what's your solution? Parentage isn't very fungible.

And a less naive response:

"I'm not saying that poor people on welfare are morally reprehensible, mismanage their money, and neglect their children. In fact I'm not saying anything. We'll just all have to draw our own conclusions from that made-up anecdote that rings true and my earlier blanket generalizations."

Give me a fucking break.

[Mr. Cairo]

You misinterpreted what I was suggesting Bacchus. The "middleman" I was referring to are the recipients of welfare, not the free markets. The recipients of welfare, being spread out and poor, lack much purchasing power to avoid getting screwed over by those selling them the necessities they need to survive.

Sorry for the misunderstanding, you are quite right that I didn't take your point. This is a fair observation, and the government as a bulk purchaser/distributor of items would hold some water, but at the end of the day, giving purchasing power to the government is not giving purchasing power to the poor. The are at least three broad problems with this approach:
a centralized system leaves the alleged beneficiaries entirely beholden to it, and there are no competitive pressures for the system to improve itself;
the competitive pressure on suppliers would transform from best serving the customers to best serving the government procurement officials, having the right contacts in the right places, if not outright corruption, would become a key part and cost of doing business;
to the extent the government order is large enough to exert market power, it is large enough to move the price arbitrarily and away from efficiency, not to mention collapsing the distribution of prices into a single one, thus screwing people who'd prefer a different price/quality trade-off.

I didn't say centralised, for example, here in Canada such a system would be managed by the provinces. But that is a fair assumption to make considering how centralised many European nations are (UK for example) so I wont hold it against you. The problem is that recipients are already beholden to welfare in it's current form, because it is unstable. When all you have is cash in hand, you're much more vulnerable to exploitation by unscrupulous business practices.
Corruption is of course an endemic problem in the world, and it's not limited to government or corporations. Attempts to limit it need to be ensured, through transparency, reviews, etc. But the existence of government corruption should not be used as an excuse to leave everything out of the hands of the government, since the private world is corrupt as well.
I don't quite understand why exerting market power leads to inefficiency.

We also have to be careful here -- you make a different proposal as well, which is the government engaging in some ad hoc procurement here and there, which is just pure redistribution, and a different argument than the market power one. Your cited examples of governments building affordable housing fall into this category, where government contracts constitute less than ~20% of the entire construction market, the government isn't really getting a better deal on behalf of the poor, even in the best case.

Also, let's look at reality. Do the clothing and food retailers not already work on very thin margins? What evidence do we have for the poor with being screwed by market power in those sectors? How much of a further discount do you really think there is to be had against the goods in Costco? If these sectors are competitive, giving money to the poor will work just fine, and they would be able to buy the goods they want, in the combinations they want, in the variety they want, and we don't need to pay the overhead for the government procurement and distribution (which, as you can imagine, won't be anywhere near as efficient as Costco's).

I fully understand the low margins with which large-scale retailers operate, I work for one. But those products you refer to are unnaturally cheap. They are made cheaply and sold cheaply with very low margins, but in such quantity to make up for it.
With food, often the cheapest food is the lowest quality food, which itself leads to massive health problems that are a huge drain on society and government.
With other products, like clothes, they are often only as cheap as they are thanks to cheap labour in the developing world, that are often inhumanely treated.
These sectors are only competitive by exploitation, both in terms of their sources and their customers.
Welfare recipients are often the most unhealthy and produce the most garbage, thanks to the extremely low quality of the products they consume. This is not something that should continue, but as long as recipients have no ability to change things, it will.

Housing is a bit of a special issue, residential land supply is fixed, city centres can only hold that many people, and housing is linked to provision of utilities, which tend to be a natural monopoly. I'd say there is properly a much bigger role for the government in housing than in food, but interestingly enough many existing housing problems are clearly problems of governance failure, not market failure or market power. US is particularly chronic in this. To quote one typical study:

Land use planning and regulation in American municipal governments often appears structured to permit the maximum amount of corruption possible.[1]  Developers[2] and other contractors[3] are typically expected to pay exactions or make political campaign contributions to politicians who possess the apparent power of blocking or facilitating development and public contracts.[4]  In Los Angeles, it appears that there is an understanding among members of the city council that they will typically defer to the council representative from the district where the development is proposed on zoning matters, such as proposals for zoning amendments, variances, subdivisions, or site plans.[5]  This allows legislators to have free reign over whether the project is approved and thus facilitates corrupt exactions as a price of development.  In Philadelphia, at least before that city’s recent overhaul of its zoning code,[6] zoning and other regulatory measures prevented developers from enjoying any development of right, whereby a developer would be informed from codes that a certain type and intensity of development was permitted.  Instead, the codes were so prolix that every development project required the equivalent of a variance,[7] and thus the system encouraged political exploitation of developers.  Typically, and in every jurisdiction, all but the smallest of projects requires some form of discretionary approval in the form of subdivision, site plan, variance, plan or zoning amendment, thus facilitating political exploitation.

Yes, I've seen how government attempts at housing can fail. I've also seen them succeed at times. The fact that it can go wrong is not proof that it always goes wrong, and should therefore not be attempted. But, to address your point, rent control seems like a pretty good way to prevent the sort of government failure you mentioned, while also ensuring that the poorest citizens aren't the most vulnurable.

Basically, what I'm trying to address here is that we have a situation in which the market has power over people, whereas I think people should have power over the market. When all you have is just enough cash to get by, you're vulnerable to exploitation. You'll suffer from mistreatment by your employer, your landlord, or your government, because to stand up for yourself is to find yourself hungry and homeless. By providing a stable base for all citizens, no-one is driven by their most basic needs for shelter and food. They therefore can exert power on the marketplace, force companies to treat employees better and to offer better quality items. In such a situation you wouldn't even need a minimum wage, as wages at the lowest level would be driven by market forces (as they are at higher levels).

These merchants were independent of any government body, they had no government support

This is a very strange characterization of Mesopotamian political economy. The general understanding among historians of the period is that economies of that period and that region are best characterized as 'palace', or 'temple' economies, where a single central institution at least notionally controls the vast bulk of significant economic activity and redistributes goods and engages in long-distance trade through its agents. Proof:

Also: https://dash.harvard.edu/bitstream/handl...sequence=1, which advocates for as "entrepreneurial" an interpretation as I have met anywhere, only manages to come up with this:

On the one hand the state administered trade and rigidly controlled the merchants activity. The state would provide the merchant with goods to be traded for specific commodities in distant communities. Upon the completion of the trading mission the administration would enter the value of goods sent and those obtained in order to maintain a balanced account. If entering and exiting values could not be reconciled, i.e. if their was a deficit, it would be subtracted from the next account. The system allowed for considerable elasticity. The administration would lack precise knowledge as to the rates of conversion used for specific goods in distant lands. There was room for merchant ‘profit’ even in administered trade. The state, on the other hand, was minimally concerned with profit. Its interests lay almost exclusively in assuring a guarantee that its procurements were met. The state gave fixed values to good. Prices were conceptualized as innate and immutable. Only goods subject to a seasonality of demand, i.e. cereals and animals, were prices subject to seasonal fluctuations. The behavior of the merchant, unattached to the central administration, was completely different. Once he departed with a consignment of goods, i.e. textiles, his sole concern was to maximize profit. Administered trade, controlled by the state, and private enterpreneurial ventures easily coexisted in the complexity of Mesopotamia’s commercial complexity.

I wasn't referring to Mesopotamian palatial economy. The tablets I was referring to paint a pretty explicit picture of largely "free" trade between cities. The temple or palatial redistribution economy within cities that both supplied and fed the labour classes were certainly not free. Also, other contemporary tablets from around the eastern Mediterranean speak of Gift Exchange, in which the rulers of different states "traded" with each-other through the medium of gifts, at fixed rates.
But private trade occurred (to greater or lesser extents in different areas and at different times) alongside this, as most vividly shown by the tablets unearthed at Kultepe (Kanesh) and other trading posts in Anatolia. There were politically neutral Assyrians living and operating within Anatolian cities. They were not representatives of Assyrian political dominance over the area, nor did they operate on behalf of the Assyrian government overseeing a Gift Exchange style of trade. There's evidence of market fluctuation and fluidity, smuggling, which wouldn't exist under a rigidly controlled fixed exchange system between rulers.
Further reading:
http://www.academicroom.com/article/anth...ient-trade
I hope you can access this where you are.


Edit: generally speaking, graft, greed, and corruption can not be used to promote a purely free market system over any amount of government intervention, since they are characteristics of humanity in general, not solely of governments.

[Bacchus]

One more point on pre-modern long distance trade, again it's just worth going through the practicalities:

So you want to be a trader. You know grain is always in short supply im Byblos, so you gather up your life savings, arrange some mules and guards, get some grain on credit and off you go. It's a 1000 km, so takes you about a month at good speed. You get there, go to market and there youbare, a foreigner with a trainful of perishable product, with an entourage on daily rates and nowhere else to go, as the nearest large city is another good week away. Why would anybody buy from you? If you come up to an inn, how much do you reckon they will charge for storage? If the buyers have any ability to cooperate at all -- and this a premodern city where there would only be a handful of families, and the richest ones almost certainly know each other personally -- you should be lucky to come out of this with your life and the mules. Now, if you agreed with the local honcho that you'd share your profits and keep coming back, that's a different story. He will even protect you from the local mob which, unlike the ruler, by prisoner's dilemma has absolutely no interest in respecting your property. The ruler might even build you a compound, where you and your compatriots can stay in safety, pray to your own gods and even live by your own laws, what won't you do for money. Sometimes of course, frictions happen, and one or the other side might have to take to arms.

And that's exactly how long-distance trade was carried out: https://en.m.wikipedia.org/wiki/Steelyard But who even knows that England and the Hansa had a war today.