The Nevada Sagebrush

A fair summary of libertarian ideology, without all the pithy remarks of the article in which this was a response to: http://nevadasagebrush.com/blog/2009/03/30/libertarianism-rearing-its-ugly-head-with-faith-in-‘free-market’/

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Every time I hear the word “Free market” I think of Neo-liberalism and Milton Friedman. That isn’t a good thing because what Milton created was a plague on humanity.

Capitalism is sadly an inherently bad system. Unregulated capitalism is even worse. Without the government keeping things in check, who is going to stop a company from practicing questionable policies or ignoring their employees for profit?

One of the many reasons why we are in the current economic quagmire is because the government did not want to regulate the market and check for bad procedures. Now imagine the current system that led us into this mess with a “winner takes all” environment. If you thought the current disparity between the wealthy and the working class was bad now, wait until you live in that system. (Just read up on Chile under the Neo-liberal system, utterly disastrous. The wealthy were swimming in money while the workers were basically eating their own dirt.)

I consider myself a Libertarian socialist, and I think it is a gross corruption of Anarchist beliefs to mix it in with capitalism. Indeed, Anarchism calls for the removal of useless government bureaucracies, but it doesn’t tell us to replace that with another useless system, the corporate state.

The UNR Students for Liberty have the right idea, but they are very mistaken to believe that a unregulated system would better for this country.

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First, I would like to start off by congratulating you on writing a fabulous article. What caught my attention was the quick, yet legitimate enlightenment of how libertarianism can be summed up as “you can do whatever you want, just keep your mitts to yourself.”

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While I agree with you that it is good to let people buy what they need and want and to not buy what they don’t need or want, I don’t think you can realistically draw a direct parallel between a Paint a Pet store going out of business and the government getting paid the same no matter how they perform their jobs. There’s just no way that we will ever not need a government of elected officials to handle the administrative work that the rest of us don’t want to have to deal with. By the way, an Apple Store employee is also paid the same, whether he fixes 1 computer during his shift or 10 computers.

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I never thought this would happen, but I agree with Eric. O_o

You wrote a fine article, Barry, but you failed to elaborate on the negative side of libertarianism. You said, “Sure, there might be an Enron or an AIG fiasco on the free and open market, but these singular bad instances are overwhelmed by billions of everyday cooperative interactions.” That’s exactly the problem! The AIG (Bear Sterns, Lehman Brothers, etc.) fiasco was so huge that it came close to destroying the market and all of its billions of transactions.

How did those companies get so huge? Why, because the neo-cons in the Bush administration (though Clinton is far from perfect, too) and Alan Greenspan, the chief of the so-called federal reserve, deregulated the market, allowing it to become more “free.” Funny story, actually – Greenspan is just about the most Libertarian head of the reserve we’ve ever had (a big fan of Ayn Rand, too) – and even he admitted that he made mistakes and that he probably should have done things differently: http://www.contrarianprofits.com/articles/greenspan-mistake/7025

I see how one can become a believer in free markets. It’s a pretty idea – bright, shiny and idealistic. The problem with bright, shiny and idealistic ideas, though, is that they never work with humans. We are not perfect. We are flawed, prone to corruption and greed, and there are always those who seek to abuse the system. Hell, communism is a great idea too – at least in theory. Let’s all live peacefully, share our stuff and sing Kumbaya. But every communistic regime that has existed failed miserably because – you guessed it – it was run by people.

Now, I’m not saying all Libertarians should go to hide under a rock and hold their breath for 10 minutes – the free market system *might* work on a small scale, in a village or with people paying whatever they feel like paying for a new album. But applying these concepts to large-scale problems simply doesn’t work. Case in point: our current unemployment is 8.5% (10.1% in Nevada) and our deficit and national debt is growing like there’s no tomorrow. But hey – at least Mr.Greenspan had fun reliving his Ayn Rand-inspired Libertarian fantasies, and that’s all that matters, right?..

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Grigory Lukin you could not be wronger if your name was Wrongy McWrongenstein.

Just how in the hell is Barry supposed to go into intricacies of libertarian theories with a 500 word limit? How are you supposed to expect him to address every single in and out of every single possible question you could hope to ask? Its simply untenable. But since you have brought up a few (and a terrible selection at that) points of interest, let me express to you how utterly and horribly wrong you are about just nearly everything you have a just said.

1. AIG and pretty much every banking failure of the recent times have been traceable not to failures of free markets but to the unrelenting regulation of banks and monetary policy. To think that banks have some how been “free” and “unregulated” is not only to be wrong but to be fingers-in-the-ears-singing-la-la-la-I’m-not-listening wrong. Point to these “unregulating” pieces of legislation. Show me how since the creation of the Federal Reserve in 1913 that banks have been free at all. Just where does one get off saying that a fiat currency system based on faith and debt (rather than commodities…thanks Nixon and your 1971 off-the-gold-standard decision) is free markets at work? Tell me, how can one fail to see that the collapse of these markets are due not to some “free market failure” but rather are perfect examples of why government intervention cannot work?

2. The fact that Greenspan was the head of the Fed should point to how little of an actual libertarian he is. Sure he was part of Ayn Rand Collective and at one point supported a gold standard, but the simple fact that he held the Federal Funds rate below that of inflation shows how not only completely backwardass he was but also how not-libertarian he really is. Greenspan was about as laissez-faire as I am a pizza.

3. You–you smug asshole–think that you know better than everyone about everything. Well you don’t. You can’t. You claim that “well, people are greedy and mean and can’t do anything without smart people like me running the show.” Hell, I bet you think people couldn’t wipe their ass if cotton wasn’t subsidized. You’re an idiot and you’re ignorant. The free market consists of people trying to do what they can to get what they can. This means that people cooperate when it pays to cooperate and conflict when it pays to conflict. Since it pays more often to cooperate (consider the amount of times you have bought groceries versus the number of times you have socked someone in the gut), people, in general, cooperate. Most people most of the time in most situations do not hurt others and this has nothing whatsoever to do with the almighty government so full people who know what’s best for others. It is the intelligences of every single person participating that makes the free market with work and it is the brains of the bureaucrats that keep the government going. But if we’re tallying up IQs, it’ll always be the market (so full of free and cooperating individuals) that has the most and not some group of people saying “we know better than you.”

…and hey that was only 548 words

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To Mike:
I was about to post an intelligent response to your message, right until I saw your third point. What gives you the right – or the cause – to call a person you’ve never met an idiot ignorant smug asshole? Your choice of words, sir, says a lot more about you than you would think – and doesn’t make libertarianism look good, either.

To moderators:
What’s the purpose of moderating messages if trash like that gets through your filters?

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Ah, Mike, the personification of the pompous pontification that characterizes so many libertarian idealists. Barry’s article was well written and reasoned, but your prattle is annoying, pretentious, and full of logical fallacies. Let’s take a look at the three myopic and hyper idealistic points you laid out:
1) You’re absolutely right, few significant bills of deregulation have been passed since the establishment of the Federal Reserve. Using that as your argument for proving that an unregulated market had nothing to do with our current financial woes, though, displays a characteristically libertarian lack of rigor. As CMOs, CDOs, and other similar derivative instruments were developed into more and more inscrutable tranches, the fact that no regulatory legislation was being passed means that a policy of either deregulation or utter ignorance was being pursued. An almost identical argument could be made for the risky lending policies that corrupted these instruments. You can’t be neutral on a moving train – when finance is growing and miring itself in increasingly absurd risks, not doing anything is doing something indeed: allowing finance to deregulate itself. The second part of your argument, implying that in a truly free market the faith/debt/credit based fiat currency system would never occur, is an area where I find libertarian philosophy to be particularly contradictory and convoluted. To say that the market would not be tempted to pursue the tantalizing risks of finance that have characterized the late 20th and early 21st centuries in a free market is silly. If what you’re really arguing for is the elimination of central banking and fractional reserve banking, then you have a bit of a stronger point, but one that is a) contradictory to the hard-nosed definition of “liberty” that every other libertarian argument rests upon, b) completely implausible in a global economy that is coordinated through fractional reserve banking, and c) beyond suicidal in the short run (and in the long run, to quote some cat you’re probably not a fan of, we’re all dead). Some libertarians/Austrian School adherents believe that the problem of point a) that I mentioned is a non-issue, because in a truly free market finance would weed out the excessive risk takers, and people would choose only banks that fully back their reserves and don’t pursue exotic policies with their money. That is beyond idealistic – that is living in a vacuum. In an industry as opaque as finance, the average bank goer is not going to have the “market savvy” (which in finance translates to “very privileged inside knowledge”) to choose which bank is truly the most secure and safe until it is far too late. The more successful a bank is, the more tempted it is going to be to expand. In finance, expansion means taking risk with other people’s money.
2) I agree on this point, Greenspan is not a libertarian in any significant sense, and to argue that he is based on his reading of Ayn Rand is silly. There are plenty of posers who read Ayn Rand who don’t have the slightest clue what they’re talking about when they spout the simple tenets of libertarian philosophy. I’d go as far to argue that Ayn Rand herself is a poser, but that’s neither here nor there. I think we can both agree that Greenspan’s artificially low interest rates have a lot to do with our financial crisis. Where we differ, I’m sure, is that I believe he should have pursued a more counter cyclical monetary policy where you believe that the Fed should have just magically disappeared and cured the market of its ills.
3) Screw it, I’m already passed 548 words and my hands kinda hurt. I’m out. This last point was too simplistic to even consider. When people boil things down to scenarios like “cooperation” vs. “people saying ‘I know better than you,’” a suspicious eye should be raised.

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Everyone gather. Come quick! For the all-knowing and ever wise Grigory Lukin has graced us once again with his plethora of knowledge. From knowing the intricacies of the macro and micro social and economical consequences of nearly every piece of human action past and present, to discovering the truth of every single controversy on and off campus – he is the king in chess as he is the champion of wisdom. Let all us laymen bow to his ever flowing internet comment genius. How did you become so wise, Master Lukin? Was it that illustrious political science bachelor’s degree you currently seek? All hail! Here here!

But in all seriousness, I can relate to Mike’s sentiments:

Grigory: You are not only the loudest, but the most ignorant. The more you say, the more your words are diluted in significance. You speak as though you are an expert in any given study, and you carry your words in such a way that anything contraire to your miniscule knowledge of any given subject is automatically wrong and discarded. You act just like some enlightened 16-year-old who automatically knows more than his parents and everyone around him. When will you learn to just shut up and carefully consider an argument and not even give an opinion. It is so obvious that you did not even consider the article (let alone read it), given your response. The moment you learn to simply be quiet and carefully consider an argument and openly welcome facts, the sooner you will realize how ignorant and stupid you truly sound.

In summary: Grow Up.

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John,
Your information is a bit stale – I’ve never been a fan of chess, and I got my degree a year ago. :P What’s wrong with being opinionated? Barry presented his points in the article without mentioning much (or any) downside to the free market argument/Efficient Market Theory. I responded by pointing out the cons and even a couple of pros. See, that’s how debates work – people point out weaknesses in each other’s arguments and make counter-arguments. :) Now, if you’d like to address some of my points and have an intelligent conversation – be my guest.

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So why is this even a debate? Sure therte are problems but our system works better than any sytem currently out there. Another thing too off topic a bit but as soon as the U.S. can give more than 3 years to a trickle down system they will see it works. EVeryone wants things now. well sorry thats not how a good system works if we fix this right it should be another 4-5 years before we see real improvement that is actually sustainable. Trickle down economics works with some basic regualtions. How’s bout a certain percentage tax breaks for so many jobs created say 1% per 100k? so a company creates 500k jobs in todays economy all that means is more money going out to wages. Witha trickle down system he has a real interest in creating 500k more to get a 10% tax break. then we down size government so they can function off this decrease in money and viola no more problems ever. Hell I bet there would be a worker shortage in 10 years.

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