Claremont McKenna vs Pomona

DSC
Mon, 24 Mar 2008 12:39:59 +0000

Fair enough on the current market as ideal(I was reluctant to use some examples due to that, but I felt that the changes were large enough to be noted even with that).

And I think you completely misunderstood my reasoning(which is likely my fault for not writing clear enough). And yes, rational decisions depend on understanding the forces at work, ‘truth in advertising if you will’. Examples of my ‘tear apart at the seams’ theory are pretty cliche - The meatpackers of ‘The Jungle’, and other such situations. Where, due to malicious intent on behalf of the company a rational choice is not possible(spoiled meat disguised as fresh for example).

I didn’t claim that licensing was perfection, and specifically that if mandated it caused problems. Instead, as builders across the country can tell you, it offers the ability to charge a premium for ensured quality. Licensing increases the information available to the consumer, refining rational choice.

And to take your analogy about the rabbits - sure they run the fastest, but they might not take the best path, or find new paths.

I think that you give too much credit to the free market - it fails quite a bit more often. The government is subject to the same forces, if much more slightly. Emigration from Russia was part of its failure. Immigration to the US has been a huge portion of its success. The difference is the risks possible, if the government fails the entire country fails, so it cannot take the risks of a single company. But any multinational moves exactly like a government, the only difference being who it serves.

Innovation has long depended on the brilliant searching for the money to pursue their ideas. The government offers the only group big enough to fund many of these paths. Is it perfect? No. Even good? Not always. But it has played a very important part in the advance of society.

I seem to have let my points wander a little too far, and I think you take my point wrong. I do not believe the government is great. But I do believe that its gambles have often done us a lot of good, so it shouldn’t be completely neutered in the name of economic freedom. In order to control a country of this size, it will naturally become less efficient - just like a multinational vs. a small business. Just like communism on the other side, size brings things towards the middle, existing on the fringes is more possible if it is a smaller group.

The index of economic freedom shows how far we outshine nations of similar size: http://www.heritage.org/research/features/index/searchresults.cfm

And yet, our government is too big in many ways as (relatively) small as it is. So how do we avoid the stupid parts(like the med example you linked) and keep the good parts(NASA when it had a coherent vision)? That is the question.

And the minimum wage debate is a classic, and your point of view should be true. But Smith’s invisible hand is not always possible. With the costs of moving and sustaining life people can become trapped in economically unfavorable situations. People cannot not work, so they must work below what the minimum would be in a vaccuum. That ignores the collusion of our robber barons, and monopolies which also create the need for such legislation. You have professed doubt in the efficiency of government (and who hasn’t), so the government’s job is to prevent trusts, monopolies, and collusion in order to maintain the many producer market needed for effective capitalism. They cannot and do not react effectively enough, so they create laws like a minimum wage to fill in for their inability to effectively prosecute all such cases.

Burma cannot simply raise the minimum wage due to the fact that their economy itself is the problem, not trusts and collusion. If you raise it too high, you get the situation that you refer to, a price floor that creates a shortage in the supply of jobs.

And I do apologize for the lack of precision in these arguments, I am not extensively schooled in economics, so I am limited by readily available examples, rather than models of economists closer to my viewpoint.