Politics Discussion Thread (Heated Arguing Warning)

[TheHumanHydra]

If allowing businesses to lie, cheat, poison, and just generally screw over their customers is the "free market" then is it really any wonder so many are rejecting it?

That, together with THH's comment suggesting that I somehow want to take his benefit away strongly indicates that I need to outline some of the first principles I'm coming from.

So, Canada's system is (broadly) private, non-profit hospitals and private, for-profit small practices, funded by public insurance, with exceptions (strangely, dental and opthalmological care are not covered). To clarify, does this model fall within your definition of free market healthcare (it seems that it may)? If so, we are agreed (I happily believe in a -- sternly regulated -- free market economy otherwise).

[Mr. Cairo]

If allowing businesses to lie, cheat, poison, and just generally screw over their customers is the "free market" then is it really any wonder so many are rejecting it?

That, together with THH's comment suggesting that I somehow want to take his benefit away strongly indicates that I need to outline some of the first principles I'm coming from.  I really liked your comment, btw, Mr Cairo, and I don't think we disagree on that much at the end of the day, but term clarification is certainly in order. Not least because I was a little imprecise with the language -- you are quite right that that blanket statement was just plain wrong as worded and if talking with people that don't share your definitions of the market. So, here we go.

Free enterprise is the ability for any individual or group to engage in exploration of people's needs, to mobilize resources and build operations to serve those needs. An effective legal system which implements and protects the right of free enterprise among its citizenry at large is what I call a free market or, sometimes, for short-hand, just 'market'. The opposite of free enterprise is coercion, which is the ability for an individual not to serve needs, but to exploit them via various forms of extortion. An effective legal system which implements and protects the right of coercion is thus the opposite of the market, I would call it a system of 'rents', 'rent-seeking' or 'privilege'.

Note that the motive, profit or otherwise, does not feature in my definition at all -- coercion can be just as profit-seeking as enterprise, and they could both be done for 'non-profit' reasons, if profit is to be understood narrowly as monetary profit.

Also note that my definition does not oppose the market to the state, on the contrary, it defines a free market as a product of an effective legal system, which in our reality mostly means a state-enforced system. Whilst I concede the logical possibility of their being a market in anarchy, I don't think there is any significant empirical possibility of such a thing, anarchy tends to breed coercion, not enterprise.

Let's quickly cover why free enterprise is good: it creates a self-motivating system of serving people's needs; it ensures that for as long as any need is underserved and could be practicably served better, there would be a motivation for serving it better; and it provides a self-correcting method for allocation of resources precisely where they are needed. These effects are very powerful and they are very difficult to replicate through other methods, which is why in general an expansion of free enterprise was routinely followed by expansion of prosperity. There are, however, conditions underlying that goodness, the most obvious are: needs can't be served through criminal means; people have to have an effective ability to choose among products and services; potential providers have to have an effective ability to make their product or service available for choice; providers have to have an ability to secure returns.

Where these conditions are unfulfilled, free enterprise loses its value: there is nothing valuable about companies competing in who can offload a larger proportion of its costs on unwilling citizens (say through adopting cheaper, polluting technologies), there is nothing valuable in a privatized monopoly, there is nothing valuable in privatizing a service which still has to be funded by taxpayers because it can't in practice secure returns from its customers. If above I had to draw a distinction with left-wingers, who define 'market' as 'profit-oriented', here I have to draw a distinction with right-wingers, who define market as 'privately-owned'. This is a real problem in the US, most chronically manifested by the veritable Frankenstein's monster of the insurance system. The sector was given over to private enterprise, but not free enterprise, as if putting something in private ownership by magic makes it better.

So, to come back to specific policy points: free enterprise is good, but the state has a role in ensuring that what goes on is actually free enterprise, that is a competitive serving of people's needs through non-criminal means through a provision of effective choice in a system that by its nature rewards the successful provider precisely for his success. Privatizing everything and cutting regulation as much as possible does NOT produce free enterprise in the general case. However, enterprise also does NOT "trend to monopoly", i.e. to being unfree in the general case -- that's a Marxian article of faith that's just false, this trend exists in specific types of industries, especially high-fixed-cost industries, but on generally. Rent-controls are also not a good way to help people with housing. So much has been written about that. (Note that I specifically avoided linking to authors like Walter Block, or the Cato Institute)

I generally have no issues with anything you said here, so I'll use a line from it to try and highlight what I think is the main flaw with current/proposed welfare systems like UBI.

"There are, however, conditions underlying that goodness, the most obvious are: [...] people have to have an effective ability to choose among products and services"

This aspect of free enterprise is denied to the poorest of our citizens, to the detriment of us all. The choices available to the poorest are really not choices at all.
I can choose between healthy and unhealthy food because I can afford healthy food. But if your choices are between KFC and McDonalds, or frozen chicken nuggets and frozen fish fingers, then really, there's no difference. This is why the poorest are often the most unhealthy, and the costs borne by society as a result of this are immense.
Then, quite often, financial limits restrict the choices available to someone. Let's say you can afford to shop at Walmart or Costco (these can be any stores really), but the Costco is a 30 minute drive away while the Walmart is only 10 minutes away, and you can't afford the gas required to make your regular shop at Costco. And so you have no choice but to shop at Walmart, even if the stuff is better at Costco.
When you have to choose between being homeless or suffering the depredations of a criminal landlord, well then you have no choice.

People often say, "vote with your wallet" in response to poor products or poor treatment. But when your wallet is empty because you've had to spend everything on what you need to survive, you have no vote.

The system I was proposing may well also provide no "choice" to the very poorest, but by providing for the most basic necessities, everyone now has the ability to engage in free enterprise, not just those who have some money left over after providing for the basics.

[Bacchus]

I'm not that knowledgeable about Canadian healthcare, but from my limited knowledge it seems like a soundish system, but very odd in disallowing non-state methods of payment, if I understand it correctly. As a world we have very far to go in figuring out healthcare, not least because this industry changed a lot. One of the biggest problems in it is the persistence of an effective 'guild', and that's what calls most for reform. We need a bunch of modestly educated doctors to treat a bunch of standard conditions as a mass service -- the bulk of the issue will just disappear.

[Nicolae Carpathia]

The guild problem is far worse in America. At least where you have the government as a single payer, it forms a monopsony that can drive down the prices.

[MJW (ya that one)]

I don't like T-Hawk's CA thing but I think the baby formula thing is okay. For political purposes; anything other than 0% is good enough. And he cannot cite numbers because UBI hasn't happened yet.

[Gavagai]

People often say, "vote with your wallet" in response to poor products or poor treatment. But when your wallet is empty because you've had to spend everything on what you need to survive, you have no vote.

But this is an entire point of free market, the reason why this system is so beautiful and works so amazingly well. Empty wallet means that you are not contributing anything into the system and, as a consequence, you do not get anything from the system. In that way, everyone is forced to contribute something. Remove this, give non-contributors free access to goods - and the entire system will collapse.
Your argument is built around a premise that free market is uncomfortable for those unadapted to it. But this is a feature, not a bug: it gives them a strong enough incentive to adapt and become productive contributors to the system of division of labor. Also, you seem to confuse freedom with comfort but "free choice" does not mean "pleasant choice".

[ipecac]

T-Hawk did the thing he's done a bunch in this thread which is launch a Fox News talking point bomb with 0 evidence and then run

Can't be worse than many of the posts here, which read like they were copied verbatim from a DNC handout.

[ipecac]

Also note that my definition does not oppose the market to the state, on the contrary, it defines a free market as a product of an effective legal system, which in our reality mostly means a state-enforced system.

Before you said this probably everyone thought you were advocating the stereotypical crazy American right-winger position.

[TheHumanHydra]

I'm not that knowledgeable about Canadian healthcare, but from my limited knowledge it seems like a soundish system, but very odd in disallowing non-state methods of payment, if I understand it correctly. As a world we have very far to go in figuring out healthcare, not least because this industry changed a lot. One of the biggest problems in it is the persistence of an effective 'guild', and that's what calls most for reform. We need a bunch of modestly educated doctors to treat a bunch of standard conditions as a mass service -- the bulk of the issue will just disappear.

Like any system, it has its weaknesses, but it does work pretty well. I think it's a useful one to be aware of because it demonstrates that there can be a functioning middle ground in these 'state or market' debates (which I think you already believe, based on your post).

Your last sentence is interesting, that could be an idea to pursue.

[ipecac]

there can be a functioning middle ground in these 'state or market' debates

'State or market' is a false binary, that (in the US) produces neocons and Hillary/Obama, virtually indistinguishable in terms of crony capitalism and crony government. 'Business or government' gives you inseparably enmeshed crony business and government. It's an old 'divide and conquer' tactic.

A standard critique of the capitalist system going all the way back to Chesterton and Belloc is the accusation that in our current system we have neither a domination by Big Government as the conservatives are constantly drumming nor an enslavement by Big Business as the liberals fear, but rather a collusion between Big Government and big Business, a collusion that allows each to benefit the other and work for the aims of the other, something in such a direct way that the folks running government and running business are the same people. ...While most in the west take [one side or the other, they are] two sides of the same coin...

As time goes by, this collusion between the state and big business, united by the bonds of big finance, is becoming more and more explicit.