Bubbly Economics

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If you have read my recent post on Ayn Rand, or if you keep tabs on right wing pseudo-intellectualism in general, you might be interested in Paul Krugman’s column in the New York Times today. Writing about the ongoing mortgage debacle, he derides Alan Greenspan and others for their inaction regarding the real estate lending bubble that is now deflating rapidly and with great consequences for the economy as a whole. He regards it as a triumph of extreme ideology, and he specifically singles out for mention Alan Greenspan and his lifelong devotion to the ideas of Ayn Rand. I quote:

In a 1963 essay for Ms. Rand’s newsletter, Mr. Greenspan dismissed as a “collectivist” myth the idea that businessmen, left to their own devices, “would attempt to sell unsafe food and drugs, fraudulent securities, and shoddy buildings.” On the contrary, he declared, “it is in the self-interest of every businessman to have a reputation for honest dealings and a quality product.”

Sound familiar? How can anyone believe such rot? Then or now? Of course, the Nobelist Milton Friedman was similarly hypnotized by the “power of the market.” So interesting, then, to read Adam Smith, the granddad of modern economics and to see his views on the merchant class. I quote once again his remarks on the merchant class, from The Wealth of Nations:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

Of course, I can’t resist putting in another Gillray link, this time on the theme of uncorking…

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8 Responses to Bubbly Economics

  1. db0 says:

    Well, wishful thinking does not reality make.

  2. evanescent says:

    Even if businessman were not interested in being honest and selling quality products, (which of course rational business WOULD BE), so what? I don’t mean “so what” in the sense of “i don’t care”, I mean “so what” in the sense of: what are you doing to do about it? Or is government your answer to everything that you personally don’t like? Consumers vote with their wallets. Nobody as a “right” to own the property of someone else. That is the garbage that you must get out of your mind straight away, as if businessman are withholding some entitlement of yours! If you want something, pay for it. If you can’t afford it, tough. Or, negotiate over price. The beauty of the free market is that supplier and consumer reach a mutually-acceptable price, and there is NO business that cannot be undercut by a better business doing a better job at a better price, which is why monopolies are impossible in the free market.

    The problem with society is the nonsense of collectivism. When you start declaring that EVERYONE has a “right” to unearned, uncredited, provisions, which will necessarily be paid for by stripping other people of their property, you open up a door to a host of social ills and evils. And, it becomes impossible to draw the line over why it’s unacceptable to violate individual rights in one instance, but not the other.

  3. lichanos says:

    Again, you assume that rationality leads to virtue only, and you ignore that people can rationally feed their greed. Adam Smith was wiser.

    Yes, people vote with their wallets. They can decline to purchase from obviously incompetent vendors. Courts can enforce honesty in contracts, true.

    But people can also vote in elections, remember? And perhaps they want to vote to create laws to prevent people from selling poison on the open market. Perhaps they feel that this reduction in freedom is justified by the harm to the unwitting it could cause. It’s a rational calculation, isn’t it? And it’s their right. You recognize only a small category of rights.

    You are also a ranter. If only we were all Leninist collectivists, then your repetitive tirades might have a point.

  4. evanescent says:

    Yes, people vote with their wallets. They can decline to purchase from obviously incompetent vendors. Courts can enforce honesty in contracts, true.

    And assuming a business has decided to be bound by the law of court, which any rational business would, courts SHOULD enforce honesty.

    But people can also vote in elections, remember? And perhaps they want to vote to create laws to prevent people from selling poison on the open market. Perhaps they feel that this reduction in freedom is justified by the harm to the unwitting it could cause. It’s a rational calculation, isn’t it? And it’s their right. You recognize only a small category of rights.

    There is no “right” that mystically emerges from a large group of people. What you’re talking about is still socialist collectivist thinking: there are more of you, so if you all get together and force government at the point of a gun to change the law for YOUR benefit, that makes it ok. In my thinking, individual rights are non-negotiable. Society has no rights, only individuals do. If you disagree, you’re welcome to explain where societal rights come from – good luck with that.

    You are also a ranter. If only we were all Leninist collectivists, then your repetitive tirades might have a point.

    Wow, you call me a ranter and repetitive after ONE comment?

    Unfortunately, this undeserved hostile resentment is a typical attitude I’ve encountered recently when talking about Objectivism; if you can’t understand it that’s ok, but please don’t make out that I am being the ranter.

  5. lichanos says:

    I say you are a ranter because you simply repeat here what you’ve said in the other thread in which I participated, without any further justification.

    Why should anyone accept your claim that individual rights, as you conceive of them, are non-negotiable? It’s just your claim. You still talk as though rights are jewels that can be retrieved from a riverbed, or found under bushes, whole and intact, not concepts that are developed and agreed upon by groups of people.

    The logical end of your thinking seems to be that individuals cannot rightfully form societies to limit behavior of individuals in any way, except for the extreme cases that you recognize as impinging on other individual rights, e.g. murder. This is simply your preference, not a logically necessary proposition as you like to assert.

    And since you mention “this undeserved hostile resentment is a typical attitude I’ve encountered recently when talking about Objectivism,” I would like to list certain characteristics of the Ayn Rand crowd that I have repeatedly encountered:

    1) Extreme anger and exasperation – Your crowd seems bothered by something, what? The dumbness of the mass that disagrees with you?
    2) Arrogance – if only the stupid masses would see that you people know the secret of happiness, all would be well.
    3) Intellectual snobbery in the extreme. Your crowd is addicted to the use of technical terms, rightly and wrongly, that add nothing to your argument. A preference for esoteric and abstract philosophical propositions that are dubious at best, and never defended.
    4) Narrow mindedness – You all insist that those who disagree with you are “socialist collectivists” or that ilk. The idea that there are more than two points of view in the world, yours and the communist dupes, seems beyond you.
    5) “Ham Handed Philosophical Technique” – That’s how another critic put it. Aggressive assertion of pet syllogisms, as if they and they alone define the argument. A discussion style similar to the old prosecutorial saw, “And when, sir, did you stop beating your wife?”

    Enough for now.

  6. evanescent says:

    Lichanos, only one thing needs to be addressed in your last remark:

    Why should anyone accept your claim that individual rights, as you conceive of them, are non-negotiable?

    Because, if individuals rights ARE negotiable, it becomes allowable for humans to violate the rights of each other by force, indiscriminately. But, since it’s impossible for us to act like moral beings when force is present, in other words, impossible to live like rational beings, in other words, to live as the type of beings WE ARE, to negotiate on individual rights is irrational and necessarily immoral, because it makes human interaction and proper society impossible. Individual rights are the only rights that exist, and that is why they are non-negotiable.

    Thought experiment: if rights are negotiable, I can kill you for disagreeing with me, and you have absolutely NO “right” to tell me I can’t or that I’m in the wrong.

    I hope that clears things up. As I’m sure I’ve said before, once we accept individual rights, everything else about politics follows.

  7. lichanos says:

    According to you, societies that violate individual rights as YOU conceive them are, ipso facto, irrational and immoral. Members of those other societies would beg to differ. (I might agree with you in condemning them, but still reject your logic.)

    You have not justified your concept of individual rights except with circular logic, and beyond that, there is the question of the extent of individual rights, or is that too graven in stone somewhere for all to see? It seems to be an elastic concept that stretches at your convenience.

    I wonder what you think of capital punishment?

  8. evanescent says:

    You ask a very interesting question here, Lichanos, and it’s enough for me to ignore the otherwise offensive tone of your comment for now.

    If you want justification for the Objectivist concept of individual rights, you can read my article here: http://ellis14.wordpress.com/2007/12/08/what-is-morality-and-what-are-%e2%80%98rights%e2%80%99/

    However, a more telling project would be for me to ask YOU what YOUR definition of Rights is; what does it mean? Where do they come from?

    As for capital punishment, I believe if someone deliberately violates the Rights of another person to the point of taking their life, they violate their own Rights up to that point. However, taking an innocent life is such a gross moral error that it is always better to err on the side of caution, and since 100% certainty is not always possible in murder trials, it is probably not feasible to implement capital punishment.

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