Cafe Hayek - Latest Comments in Relative Price Adjustments and Aggregate Demand

Re: Relative Price Adjustments and Aggregate Demand

Guest — Sun, 30 Nov 2008 05:56:54 -0000

"The whole idea of a market with supplies and demands presumes property a priori, and property presumes a rule of law presuming law makers (a.k.a. policy makers) and thus a state, in the minarchist way of thinking."

That the market presumes property has little/no effect on the price of an item. You haven't refuted my point at all, Martin.

"This price is not an attribute only of our isolated transaction. It also reflects our other options. It reflects opportunity costs. It reflects supply and demand as you say. Your single copy of a novel is not the "supply". If someone offers me the same novel for four dollars, I don't pay you five, so this agreement is not simply between the two of us."

Now you seem to agree with me that prices are determined by supply and demand. Why did you bother responding to my post in the first place? I have no desire to split split-hairs with you.

"We are not the market."

No, we're a market. Markets do not exist only in the aggregate.

"You're only ignoring their influence to enjoy a sense of freedom, but you're only free within the bounds of their influence. They certainly do affect the price you pay for novels on ebay."

I'm not ignoring anything, Martin. As you said, the market presumes property (to some degree). I had no desire to make this a discussion of prperty rights, precisely because what we are talking about is not property, but prices.

That a legal framework exists to protect property rights has no bearing on the price of an item. That price is still arrived at by the supplier and the seller.

You're written much, Martin, but you haven't written anything that is particularly relevant to pricing and you've done nothing to refute my earily point. In fact, while attempting to disagree with me, you've agreed with me.

Re: Relative Price Adjustments and Aggregate Demand

cpurick — Sun, 30 Nov 2008 05:46:18 -0000

It's nothing short of amazing to see the rationalization at work in the minds of our resident useful idiots.

Re: Relative Price Adjustments and Aggregate Demand

Martin Brock — Sun, 30 Nov 2008 05:14:09 -0000

Some people understand ... but for others ...

Can you distinguish the former from the latter in the context you cite?

Re: Relative Price Adjustments and Aggregate Demand

Unbathed — Sun, 30 Nov 2008 04:20:00 -0000

The real world and home ownership rights:

A US businessman vowed last week to fight an Israeli eviction order against a group of Jews living in a house in the West Bank city of Hebron he says he bought. The Palestinian owner of the house, however, said the sale was never completed, and an Israeli court ruled that documents provided by the settlers were forged. Jerusalem Post

Some people understand that price-based markets perform better under the rule of law; but for others, the policies and regulations which enable their markets to deliver prosperity are as invisible as water is to fish.

Re: Relative Price Adjustments and Aggregate Demand

Martin Brock — Sun, 30 Nov 2008 04:10:28 -0000

Of course, there is no such thing as "unjustified" taking - every thief has a reason.

This idea of "unjustified taking" is meaningful only insofar as "just" is synonymous with "lawful" and "law" describes standard rules agreeable to authorities imposing force. "Justice" obviously does not describe any rule any individual prefers, even if it's a rule that Jesus or Murray Rothbard preferred.

Re: Relative Price Adjustments and Aggregate Demand

Martin Brock — Sun, 30 Nov 2008 03:57:17 -0000

... there may be a gray area in which disagreement could arise.

That's the understatement of the age. Disagreements over property arise routinely. We're constantly disputing property rights here, the rights of beneficiaries of Obama's spreading around of the wealth for example. Much more mundane disputes are also routine, like the precise boundary of a parcel of land, rights to water flowing across a parcel, rights to sunshine falling on a parcel, rights to emit noise from a parcel, rights to deter or remove trespassers from a parcel, rights to construct an attractive hazard on a parcel, the precise meaning of "attractive hazard". The list is endless, and the law fills libraries.

Even Republicans and Democrats can co-exist peacefully, and you and I can still talk.

So if we aren't literally in armed rebellion, all is well? All is voluntary? All is the market? Further spreading around of wealth in the U.S. is fine as long as Republicans and Democrats co-exist peacefully? While the truce is sufficiently respected, we have nothing more to discuss?

We don't have a state of revolution or civil war here. I concede this fact. We have a state. I won't deny that one, and I don't understand why anyone wants to deny it.

But there is a limit. Whenever it appears to either party to an exchange that the other is working against rather than for it, it must end.

And this limit is the peaceful co-existence of Republicans and Democrats? We've no reason to question any forcible propriety until one of these parties starts shooting at the other? You believe yourself so plainspoken, but you raise all of these questions.

If you blow it, I'm through with you forever.

That's always up to you.

With all of the words spent on your last post, you couldn't simply define "initiate", so I have no better idea of any force you advocate than when you started. You should run for office.

Property holders unite to force others to bend to their iron will. I'm a party to this alliance of forces myself, but I'm always very skeptical of what we're doing.

Re: Relative Price Adjustments and Aggregate Demand

Unbathed — Sun, 30 Nov 2008 02:59:02 -0000

Ray G wrote:

He is a member of the Left wing elite in good standing.

That a proposition is popular with a particular group, or is advocated by a particular person, has no bearing on the truth value of that proposition; so why bring it up?

Re: Relative Price Adjustments and Aggregate Demand

Unbathed — Sun, 30 Nov 2008 02:50:09 -0000

dg lesvic,

Two questions:

When you buy, at a price agreeable to you and the seller, goods which the seller obtained by violence from the unwilling, does that voluntary purchase transaction make the goods your resources and end all prior claims?

Do you claim that Holder in Due Course protocols are not the work of policy-makers?

Re: Relative Price Adjustments and Aggregate Demand

dg lesvic — Sun, 30 Nov 2008 01:03:00 -0000

Martin Brock,

You wrote,

"You can duck the question, the answer to which certainly has endless practical consequences."

I know just what you're getting at. Beyond the definition of "resources" that would be obvious, there may be a gray area in which disagreement could arise.

But that is true throughout life. And yet people manage to work around such disagreements, coexist and cooperate, because they value what they agree upon more than what they disagree upon. My wife and I have had disagreements, but have still managed to live together for almost 50 years and raise a family, because we valued what brought us together more than what would tear us apart. Even Republicans and Democrats can co-exist peacefully, and you and I can still talk.

But there is a limit. Whenever it appears to either party to an exchange that the other is working against rather than for it, it must end.

You and I are very close to that point. As far as I'm concerned, this is your last chance to make sense. If you blow it, I'm through with you forever.

Re: Relative Price Adjustments and Aggregate Demand

Gil — Sun, 30 Nov 2008 00:46:03 -0000

And every murderer has a reason too. Boom Boom!

Re: Relative Price Adjustments and Aggregate Demand

Randy — Sun, 30 Nov 2008 00:32:22 -0000

Gil,

"...and theft is unjustified taking..."

That's an interesting way to put it. Of course, there is no such thing as "unjustified" taking - every thief has a reason.

Re: Relative Price Adjustments and Aggregate Demand

Martin Brock — Sat, 29 Nov 2008 23:05:20 -0000

It is the use of force or fraud in the initiation of interaction.

Define "initiate".

I can either follow you and that question into one of those endless sectarian disputes, with no practical purpose, that I had complained about, or ...

You can duck the question, the answer to which certainly has endless practical consequences. You can follow Don into battle, and you and Don can establish any state you successfully force unwilling participants to accept. "Property" describes rules you hope to enforce. Good luck with that.

Re: Relative Price Adjustments and Aggregate Demand

Martin Brock — Sat, 29 Nov 2008 22:55:04 -0000

Given that the question is leading, I'm guessing you would like a discussing of property rights.

We can discuss property if you want, but my point follows an earlier point. You wrote, "Prices, free from the regulation of policy-makers, are set by the interaction of supply and demand." I responded, "Which prices are free from the regulation of policy makers?"

The whole idea of a market with supplies and demands presumes property a priori, and property presumes a rule of law presuming law makers (a.k.a. policy makers) and thus a state, in the minarchist way of thinking.

However minimal the state is, however limited the powers of rulers, however democratic their succession, however clear and concise the rules they make, markets don't exist without things to exchange, and property is precisely what we're entitled to exchange in a market, and property requires policy making fundamentally, whether it's John Locke's policy or someone else's policy.

"Price free from the regulation of policy makers" is meaningless. It's a contradiction in terms. Property is not natural as opposed to artificial. It is precisely what human beings compel one another to accept in the truce of civil society.

You, first, asked me what prices were untouched by policy makers.

You, first, presumed prices untouched by policy makers.

I provided two examples: eBay, and transactions amoung friends. If I were to trade, for example, a novel, with a friend for $5.00 that price is untouched by regulators.

No. This price is not an attribute only of our isolated transaction. It also reflects our other options. It reflects opportunity costs. It reflects supply and demand as you say. Your single copy of a novel is not the "supply". If someone offers me the same novel for four dollars, I don't pay you five, so this agreement is not simply between the two of us. We are not the market. Without copyrights, a supply of novels might not exist at all, and the particulars of copyright protection affect the supply and thus the price of novels.

Our bargain is not independent of the particulars of property and are not untouched by policy makers. Without the evolving concepts of property, markets and money, the whole idea of "price" is meaningless.

The price is arrived at by the interaction of the supplier of the book (myself) and the person demanding the book (my friend). Third parties have not inserted themselves in any way.

Certainly, they have. You're only ignoring their influence to enjoy a sense of freedom, but you're only free within the bounds of their influence. They certainly do affect the price you pay for novels on ebay.

Re: Relative Price Adjustments and Aggregate Demand

Greg Ransom — Sat, 29 Nov 2008 19:07:32 -0000

"Some persons understand the role of relative prices -- understand that prices work only if they are permitted to adjust in order to reflect relative scarcities"

If you were doing a full disclosure Don, you'd add that group includes only about 6 or 7 macroeconomists in all of the United States.

Re: Relative Price Adjustments and Aggregate Demand

Greg Ransom — Sat, 29 Nov 2008 19:04:40 -0000

Don, you're acting as the Toto of the economics profession here, pulling back the curtains on the fraud which is academic macroeconomics.

By all rights you should have your tenure removed, your Ph.D. should be stripped from you and you should be once and for all expelled from the Holy church of economics.

Sacrilege I say!

Re: Relative Price Adjustments and Aggregate Demand

Guest — Sat, 29 Nov 2008 17:56:41 -0000

Upon reflection, neither word contains a "u". Time for a new spell-checker I suppose.

Re: Relative Price Adjustments and Aggregate Demand

Guest — Sat, 29 Nov 2008 17:49:18 -0000

Whoops. I just noticed a spelling error. I don't recall if I was going to use the word "among" or "amoungst". Either way, my apologies for the mistake.

Re: Relative Price Adjustments and Aggregate Demand

dg lesvic — Sat, 29 Nov 2008 17:47:48 -0000

Martin Brock,

You asked me to define aggression.

It is the use of force or fraud in the initiation of interaction.

You asked, what are "your own resources?"

I can either follow you and that question into one of those endless sectarian disputes, with no practical purpose, that I had complained about, or follow Boudreaux into the real challenges before us.

I'm with Boudreaux.

Re: Relative Price Adjustments and Aggregate Demand

Guest — Sat, 29 Nov 2008 17:23:52 -0000

Your first question:

I don't, unless I happen to know you personally.

Your second question:

Given that the question is leading, I'm guessing you would like a discussing of property rights.

You, first, asked me what prices were untouched by policy makers. I provided two examples: eBay, and transactions amoung friends. If I were to trade, for example, a novel, with a friend for $5.00 that price is untouched by regulators. The price is arrived at by the interaction of the supplier of the book (myself) and the person demanding the book (my friend). Third parties have not inserted themselves in any way.

I fail to see how your questions are leading to a refutation of my assertion.

Re: Relative Price Adjustments and Aggregate Demand

Martin Brock — Sat, 29 Nov 2008 17:13:14 -0000

Entitlement? The transaction is an agreement. You continue to miss the point that I made.

I'll rephrase the question. When I transfer a particular good to you on ebay, friend, how do you know that I own it? For that matter, how do I know that I own it? If you want to reiterate some point I'm not addressing, you can do that.

Re: Relative Price Adjustments and Aggregate Demand

Guest — Sat, 29 Nov 2008 16:25:40 -0000

"When I transact with you on ebay, friend, how do you know that I'm entitled to transfer a particular good to you?"

Posted by: Martin Brock | Nov 29, 2008 9:12:32 PM

Entitlement? The transaction is an agreement. You continue to miss the point that I made.

Re: Relative Price Adjustments and Aggregate Demand

Martin Brock — Sat, 29 Nov 2008 16:12:32 -0000

eBay, transactions between friends, etc.

When I transact with you on ebay, friend, how do you know that I'm entitled to transfer a particular good to you?

Re: Relative Price Adjustments and Aggregate Demand

Martin Brock — Sat, 29 Nov 2008 16:00:38 -0000

Also, comparing Peter Singer to David Duke is woefully inaccurate, and even dishonest depending on how well read the person is making such a statement.

Since I never compared Peter Singer to David Duke, I'm happy to agree, but this agreement does not imply the validity of any specific conclusion that Singer, who is an iconoclast, reaches on nominally "utilitarian" grounds.

Reason on Singer:

"Singer has made similarly controversial plunges into social policy. In a recent New York Times Magazine essay, he argued that the affluent in developed countries are killing people by not giving away to the poor all of their wealth in excess of their needs. How did he come to this conclusion? 'If…allowing someone to die is not intrinsically different from killing someone, it would seem that we are all murderers,' he explains in Practical Ethics."

Of course, Reason doesn't quote Singer here, and I have no idea what's missing in the ellipsis. Regardless ...

Paul Roach on Bentham:

"The Poor Law Amendment Act of 1834 resulted from the middle class' use of utilitarian principles as well. The belief that the old poor laws were demoralizing to those who received relief was a primary cause for reform. Equally important was the economic burden produced by the administration of the poor laws. The administration of the old poor laws had risen in cost from 619,000 pounds in 1750 to almost 8,000,000 pounds in 1818. The means of supporting these costs fell on the landowners who now had sufficient reason to hope for poor law reform. The Poor Law Amendment Act of 1834 was passed and Edwin Chadwick, once Bentham's personal aide, was made secretary of the Poor Law Commission."

Sounds like Bentham himself would have hotly contested Singer, yet you seem convinced that Singer epitomizes "Benthamites", while Bentham himself would more have inspired Ronald Reagan in this regard. Maybe the problem is that you don't have a clue what Bentham thought about anything, aside from popular summaries like "greatest happiness for the greatest number" and fashionable interpretation of this maxim today.

Or, in other words, he is not shunned for his ideas as David Duke is shunned. He is a member of the Left wing elite in good standing.

Right. You don't shun the "Left wing elite in good standing" here. You think they're just peachy.

Define "Left".

Re: Relative Price Adjustments and Aggregate Demand

Martin Brock — Sat, 29 Nov 2008 15:36:50 -0000

The utilitarian slant is just Martin & Co. hijacking the blog as usual. I threw the Peter Singer interview in their for fun.

Of course. You couldn't be hijacking the blog, because this use of "hijack" just wouldn't be proper.

Bentham and his subscribers say "no" ...

This statement could hardly be further from the truth. The whole idea of utilitarianism is to provide an objective basis for morality. Bentham never uses the term "objective" himself as far as I know, but Dr. William Sweet of St. Francis Xavier University in the Internet Encyclopedia of Philosophy does.

"For Bentham, morals and legislation can be described scientifically, but such a description requires an account of human nature. Just as nature is explained through reference to the laws of physics, so human behavior can be explained by reference to the two primary motives of pleasure and pain; this is the theory of psychological hedonism.

...

"On this view, pleasure and pain are objective states and can be measured in terms of their intensity, duration, certainty, proximity, fecundity and purity. This allows then both for an objective determination of an activity or state and for a comparison with others."

... as Singer illustrates in the interview.

Never mind that he never says anything about "an objective morality" in the interview.

Most rational people believe that murder or theft are universally known as wrong, ...

"Murder" and "theft" are both legal terms, the definition which can and certainly does vary from state to state.

.. but the traditional Benthamite answer is that murder is not beneficial to society and thus we've ingrained the idea of it's objective immorality into our society.

O.K. Where does Bentham say anything like this? This is not at all how Bentham uses "morality" in Principles of Morals and Legislation. Bentham would say that murder is immoral because the crime objectively diminishes happiness and inflicts suffering. His claim is that reasonable men can agree objectively on when happiness is diminished and suffering is inflicted, thus this standard is not subjective.

It also makes a convenient stepping stone to collective economic plans.

So you say. I suppose I won't be supporting you for Utilitarian Philosopher King anytime soon. The problem with your analysis of "Benthamites" is that Bentham himself did not say so.

Re: Relative Price Adjustments and Aggregate Demand

Guest — Sat, 29 Nov 2008 15:31:56 -0000

"You didn't answer my question either."

I'm sorry, I thought the question was both rhetorical and irrelevant, as it missed my point entirely.

Your answer:

eBay, transactions between friends, etc.