Cafe Hayek - Latest Comments in Caplan on Economic Ignorance and Public Choice

Re: Caplan on Economic Ignorance and Public Choice

Sam Grove — Wed, 16 May 2007 08:09:20 -0000

And to answer the question about which group I would put in position of government: I trust no one that wants power over me.

I wouldn't put 'known to be bad' people in such a position and I wouldn't wish it on decent people.

Political power is a peculiar kind of honey. What kind of flies do you suppose are attracted to it?

Re: Caplan on Economic Ignorance and Public Choice

Sam Grove — Wed, 16 May 2007 07:02:30 -0000

markets owe their very existence to government

Can you prove this theory?

Lets see the market run with out soldiers and policemen and civil engineers. Lets see the market run with out corporate law, with out patent law and without a judicial system to uphold its contracts.

Well, libertarians, the minarchist one anyhow, concede a role for government in national defense, police, and courts. OTOH, you may have heard of arbitration as a private alternative to courts. Militia as an alternative to government controlled armies. Even private roads, which was the norm once upon a time.

And for the last, you may suppose that the current administration has no ideological basis for its war mongering. And even if we grant that the oil corporations are benefitting, it is the government that forces citizen to pay for it. The oil companies certainly don't want to pay for it. If government had not the power to tax us, would we have troops in a hundred and twenty some countries around the world?

IAC, it is a well known behavior of governments, institutionalixed tribal hierarchies, that its members can be gathered in support of the leadership with the presentation of an external threat. See "The Prince", by Machiavelli for an elucidation of this. Politicians know this and successful politician are people with an instinct for this.

It is interesting how corporations, creatures of government, get sole blame for activities that are enabled only by political government. Notice my use of the word "sole", don't gloss over it.

I'll restate, war is made possible by political systems of governance with its ability to extort from its citizens sufficient resources to carry out the logistics.

Everyone knows that the only way to govern society is with a political hierarchy.

I say: It ain't necessarily so.

Re: Caplan on Economic Ignorance and Public Choice

muirgeo — Tue, 15 May 2007 23:26:57 -0000

Sam,

The markets could not exist without government! You act as if the government only impedes markets when the markets owe their very existence to government.

Lets see the market run with out soldiers and policemen and civil engineers. Lets see the market run with out corporate law, with out patent law and without a judicial system to uphold its contracts.

You said, "What I do think is that in the market, we do not grant anyone the right, authority, or power to make us pay for anything we do not wish to buy."

That's false for the same reason I stated above. Does the patent office not cost anyone a penny. How about the treasury.

And here worse still you state, "The market does not tax us to send soldiers to other countries to kill whoever "the government" has decided must be killed."

Holy cow....this is nothing but a war to protect the oil market and it's costing us hundreds of billions and the military-indutrial "market" is scoring big time on our tax dime. But oh yes it's all about terrorism....and the media industry makes a pretty penny off the terrorism and great "war stories" to come out of it. The markets ARE indeed taxing us heavily and they are taking life and limb from our soldiers by the tens of thousands while the wealthiest get tax breaks and the oil companies break record profits off of them. Certainly the politicians on top have a lot to gain from endless war with consolidation of power and rule through fear. Works great but still these guys are controlled by the markets.

Re: Caplan on Economic Ignorance and Public Choice

Sam Grove — Tue, 15 May 2007 21:21:48 -0000

George Washington:

"Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master."

Re: Caplan on Economic Ignorance and Public Choice

Sam Grove — Tue, 15 May 2007 20:57:45 -0000

I never understand the position of hating and distrusting government, especialy one that we choose, because you believe all people in government are corrupt. Then you trust the free market because it is flawless and all people who work in it are apparently perfect and principaled people.

I'm certain you think that is what I said and meant, but it is not.

I have no thought that the market is perfect, wouldn't even know what that means.

What I do think is that in the market, we do not grant anyone the right, authority, or power to make us pay for anything we do not wish to buy.

The market does not tax us to send soldiers to other countries to kill whoever "the government" has decided must be killed.

You do not comprehend what the market is. It is a venue for people to trade values, for associations, make friends, recreate, create, start a business, get a job, make money, etc. No one is in charge of it. It's similar to an ecological system. It arises from the interactions of people. Everyone particiaptes in some fashion.

As for government, it is commonly thought that government was created (by whom, we might ask) to correct for the flaws of humans. I think that government is more a product of the flaws of humans. We know its origins in conquest, and the transition to what is called "the modern state", but its basic nature remains the same.

It is a tool of coercion.

Think of the incentives.

Re: Caplan on Economic Ignorance and Public Choice

muirgeo — Tue, 15 May 2007 16:09:23 -0000

Sam,

Think of it this way Sam. Say you had two groups of people. One group was represented by the typical person (some good, some bad and some in between). And one group was representated by the best people you've ever known. Honest, hard working, loyal and trustworthy.

Now you have to choose. One group to be in charge of all of government and one group to be in charge of all business and private enterprise. Where would you place each group?

Re: Caplan on Economic Ignorance and Public Choice

Sam Grove — Tue, 15 May 2007 13:01:33 -0000

2) "..what is the purpose and function of business?"

To improve society.

To make money by providing goods and services to people

3) "Why do people go into politics"

To improve society.

Well, I'm sure this varies, but there are people who go into politics for the ego trip and/or to do "battle' for their tribe.

What seperates those that want to improve society from those that enter for, um, other reasons, is the ability to win the support from various interests in society. IOW, at manipulating perceptions. When I ran for congress in San Francisco, I followed Nancy Pelosi around, and while I could never say that she was "lying", I did notice that what and who she stood for shifted depending on who she was speaking to. I recall that she is from a political dynasty. IAC, the purpose of a politician is to get elected, once elected, the purpose is to get re-elected.

How do people think they will improve society by going into politics?

By creating/supporting legislation that attempts to control/manipulate peoples behaviors.

4)"what is the purpose and function of government?"

To protect its citizens.

That's what citizens are supposed to think about their government. The actual purpose of government is to maintain order...the existing order, by attempting to control/manipulate people's behavior by threat of legal action...sanctioned extortion, and not always such legal action if one thinks the government should be bound by the constitution.

Instead of thinking about society and government in terms of what you think it should be, but by the incentives and disincentives that have been established, always remembering the reality of human nature.

Individuals ALWAYS act in what they perceive to be their own interest, whether they be in government, or business, or in any situation. It's hardwired.

Re: Caplan on Economic Ignorance and Public Choice

muirgeo — Tue, 15 May 2007 11:26:48 -0000

Sam,

Good questions. There are actually 4 seperate questions. I'll start simple.

1) "Why do people create businesses.."

To make lots of money.

2) "..what is the purpose and function of business?"

To improve society.

3) "Why do people go into politics"

To improve society.

4)"what is the purpose and function of government?"

To protect its citizens.

Re: Caplan on Economic Ignorance and Public Choice

Sam Grove — Tue, 15 May 2007 10:10:12 -0000

Muirgeo,

Let me ask you some questions:

1 Why do people create businesses, or what is the purpose and function of business?

2 Why do people go into politics, or, what is the purpose and function of government?

Re: Caplan on Economic Ignorance and Public Choice

Sam Grove — Tue, 15 May 2007 10:04:57 -0000

You think that's impossible...I don't.

It's impossible as long as government has the power, authority, and sanction to control resources...superficially, money.

In practice you are right. In theory the founding fathers would be saddened by your pessimism.

Oh, they were pessimistic about democracy, that's why they attempted to establish a constitutuional republic rather than a democracy. That's why the D of I mentions that the people have the right to change their government when it no longer serves them.

Governments always are instituted to serve the elite, and when the elite lose control, government serves itsself. The "people" are sheep to be shorn.

Re: Caplan on Economic Ignorance and Public Choice

muirgeo — Tue, 15 May 2007 06:06:10 -0000

Muirgeo, you have to give up the notion that democracy gives the people control over government.

Posted by: Sam Grove

In practice you are right. In theory the founding fathers would be saddened by your pessimism. With your attitude we might have well given the country back to the Queen when she visited last week.

My point remains that the reason "The People" don't control the government is because monied interest have corrupted democracy. And in fact they have corrupted the markets as well. The current fight is no different then the one the British East India Company set us to in 1773.

My opinion is that you will never get your free markets and I will never get my government "By the People" until we separate money from politics. You think that's impossible...I don't.

Re: Caplan on Economic Ignorance and Public Choice

Sam Grove — Mon, 14 May 2007 21:16:56 -0000

My favorite quote from Will and Ariel Durant

"It may be true that you can't fool all the people all the time, but apparently you can fool enough of them to runn a large

country."

Muirgeo, you have to give up the notion that democracy gives the people control over government.

Another quote, from Sy Leon:

"Voting is like going through one of two doors, no matter which one you go through, you end up in the same room."

Of course there's: Democracy is two wolves and a lamb voting on what to have for lunch.

Re: Caplan on Economic Ignorance and Public Choice

tarran — Mon, 14 May 2007 09:00:18 -0000

Anybody who claims that Mexico has a weak government needs to re-do their research.

Yes, the "official" taxes are low, but the actual taxes levied by the government officials are quite high.

I also find it laughable that weak governments empower "big" business. Large corporations tend to maintain their size and dominance primarily through government assistance: the courts grant them special privileges and kneecap any newcomers who try to compete with them.

Re: Caplan on Economic Ignorance and Public Choice

Russell Hanneken — Mon, 14 May 2007 08:39:49 -0000

muirgeo, as long as politicians have some power, they will have something to offer in exchange for a bribe. But it makes a difference how much power a politician has. When government has vast powers to push people around and take their money, people will spend vast amounts of money to capture that power--to wield it against others, or to protect themselves against others who would wield it.

You do raise a good point, however. I've been saying that if government is effectively limited, public officials will have less power to sell, and others will have less incentive to pay for it. But can government remain effectively limited if politicians decide how much power they have, and others are willing to pay to expand its power? I'm skeptical.

The problem is not, as you seem to think, that politicians want to stop bribery but lack the power to do it. Politicians are individuals who will follow their own interests--not the interests of "the people." In other words, they are human beings--just like the people in business. If government corruption is in the interests of the businesses who benefit from it, it is equally in the interest of the politicians who benefit from it.

Even when they pass laws ostensibly to stem corruption, they rig the rules to their own benefit. As you may have noticed, campaign finance laws have been used to silence criticism of the government--e.g., Michael Moore's film _Fahrenheit 9/11_ couldn't be advertised shortly before the 2004 election.

Whatever rules exist, it is always the rich, not the poor, who have the resources to game the system. And they will do it, as long as the payoff is large enough to make it worth their while.

You might suppose that, in a democracy, voters would keep government officials in line, but it's obvious that they don't. As Caplan points out, special interest legislation is actually very popular. If you want to know why, I recommend reading Caplan's book.

Re: Caplan on Economic Ignorance and Public Choice

muirgeo — Mon, 14 May 2007 07:30:03 -0000

..."the only power businesses and corporations have is the power to create goods and services and offer them to people--"

Posted by: Russell Hanneken

Not to belabor my point but don't forget they have the power to buy politicians and favorable legislation. And i can't think of a senario where legislators could be so "weakened " as to have nothing to offer.

Re: Caplan on Economic Ignorance and Public Choice

Russell Hanneken — Mon, 14 May 2007 07:04:11 -0000

muirgeo, my point is not that bribery is nothing to worry about. My point is that "weaken[ing] the officials who are sent to Washington to represent the people" is an effective way to decrease the incidence of bribery.

Weakening the power of public officials is easy to do Constitutionally, since most of what government does today is not actually authorized by the Constitution. As a libertarian, I of course think that scaling back the size and scope of government is a good thing to do in any case--the fact that it would reduce bribery is a bonus. You of course may disagree.

In the absence of special favors from government--the only institution recognized as having a legitimate power to coerce and expropriate--the only power businesses and corporations have is the power to create goods and services and offer them to people--or withhold them if terms of exchange cannot be agreed on.

Re: Caplan on Economic Ignorance and Public Choice

muirgeo — Sun, 13 May 2007 22:27:00 -0000

Muirgeo--you might like reading Alvaro Varga Llosa's "Guide to the Perfect Latin American Idiot."

Posted by: Flash Gordon

Flash,

That's typically my reply to Libertarians. Mexico has fewer regulations and lower taxes. Is that the way we want to go?

Re: Caplan on Economic Ignorance and Public Choice

muirgeo — Sun, 13 May 2007 22:23:43 -0000

muirgeo, your view of politics as the result of sinister self-interested folks is simply wrong.

Posted by: TGGP

Really? Ken Lay, Michael Millken, Arthur Andersen, Jack Abramoff, Duke Cunningham, Michael Scanlon, Bob Ney...that's off the top of my head. The last six years have been nothing but scandal.

Ask yourself "Has there ever been a time when there wasn't money in politics"?

Posted by: TGGP

No there hasn't. So why not try something new?

Re: Caplan on Economic Ignorance and Public Choice

muirgeo — Sun, 13 May 2007 22:00:02 -0000

muirgeo, when people offer politicians a bribe, they expect something in return. This is true whether the bribe is offered before or after the politician is elected. Elected officials have only one thing to offer in return: the exercise of power.

Posted by: Russell Hanneken

So don't worry about bribery? But instead weaken the officials who are sent to Washington to represent the people. First, how do you plan on doing that constitutionally? Second, thats my point of Libertarianism. Take power away from the electorate in favor of Corporations and businesses. Placing Capitalism above Democracy.

And if you are going to OK the indirect bribery of lobbyist and campaign donations why not make it legal for people and corporations to pay politicians directly to pass bills and legislation they want?

Re: Caplan on Economic Ignorance and Public Choice

Sam Grove — Sun, 13 May 2007 21:09:55 -0000

To illustrate the difference between economic power (the marxist bogeyman)and political power, remember that the USSR basically abolished private ownership of, well, everything, but in particular, business...and profits. Nonetheless, people were even more oppressed than when there was privete ownership.

The reason political power trumps economic power it the same reason a wealthy man hands over his wallet to an armed mugger.

When you get that, you'll have got it.

Re: Caplan on Economic Ignorance and Public Choice

Mr. Econotarian — Sun, 13 May 2007 20:14:04 -0000

I am concerned that Libertarianism itsself is often sold as a a "feel good" philosophy rather than a means to maximize economic growth.

Infact some elements of Libertarianism may be at odds with actual results from economics (gold bugism and lack of strong institutions are my main concerns).

Re: Caplan on Economic Ignorance and Public Choice

vidyohs — Sun, 13 May 2007 16:23:15 -0000

Alvaro Varga Llosa's "Guide to the Perfect Latin American Idiot."

Flash Gordon, great book.

To this suggestion, and for day to day reading, I would suggest to all out socialist idiot friends two magazines:

Reason Magazine

and

Liberty Magazine.

Both have on-line wensites and can be found simply by typing "Reason Magazine" or

"liberty Magazine" in the GOOGLE seach.

I wouldn't trade my wife for those two magazines, but I'd have to think about the kids.

Re: Caplan on Economic Ignorance and Public Choice

John — Sun, 13 May 2007 15:50:03 -0000

Muirgeo,

This what is meant by irrational ignorance. The cheap, "feel good" answer is that it's the fault of markets and money. But, aside from charity, money, if you notice, and capital is never willingly invested in something without financial incentive. There has to be the promise of a bigger gain over the investment.

What's government worth? Well, look at how much deep pocketed sources spend. They aren't doing it for nothing.

If the lottery suddenly started paying 1 to 1, how many people would have the INCENTIVE to play??

Re: Caplan on Economic Ignorance and Public Choice

Flash Gordon — Sun, 13 May 2007 15:27:34 -0000

Muirgeo--you might like reading Alvaro Varga Llosa's "Guide to the Perfect Latin American Idiot." I'm not implying that you are an idiot, the idiots in the book are mostly politicians, but Latin America is pretty much a mess because of the politicians who have won elections from voters who think a lot like you do.

Re: Caplan on Economic Ignorance and Public Choice

Flash Gordon — Sun, 13 May 2007 15:20:32 -0000

David Graf--I'd say that's as good a start as you'll find. Note the original copyright on Hayak is 1944 and for Hazlitt it's 1946. They're both classics that have stood the test of time. I don't think either of them has ever been out of print.