On Sat, 14 Jun 2008 04:42:46 -0400, Les Cargill wrote:
> The Trucker wrote:
>> On Fri, 13 Jun 2008 22:50:53 +0000, anonymous wrote:
>>
>>> On Thu, 12 Jun 2008 14:15:16 -0700, The Trucker wrote:
>>>
>>>> There is a crying need for honest economic study in this and other
>>>> nations. The Hayekians have been shown to be wrong. The Marshallians
>>>> have also taken the gas with the Cambridge Capital deal yet the
>>>> universities are still selling snake oil. It has been a total corruption
>>>> of economics that has misled the American people. They have not been
>>>> given information necessary to properly vote their own best interest.
>>> Was Hayek wrong? On what issues?
>>>
>>> I ask because I tend to agree with you on many things, Trucker, and yet
>>> I think The Austrian School has merit (which you dont?).
>>
>> All schools of economics have some merit in that they challenge and
>> criticize other schools and they reexamine some "accepted" theories that
>> might be in error. The problem for Hayek and Austrians in general is the
>> failure to recognize the fact that the pursuit of power is not actually
>> the pursuit of wealth
>
> No, I'm pretty sure that Hayek understood that. The pursuit of power
> generally drives out wealth. That's kind of the spine of his works...
>
> Might just be me, but I think that almost all political evils are
> based in people trying to make some sort an activity "more important
> than" just plain old economic activity. It's an old habit, borne of
> the old proscriptions against usury*. Bluntly, if somebody
> can not negotiate a price for something, they've stopped being
> reason-able. All political statements of the form "but is so
> evil it cannot be tolerated" are where *real* evil comes from.
> Evil is bootstrapped.
>
> Clearly, some things are beyond price. But those are personal
> things, not universal.
Clean water and air are not "personal". But the Hayek worshipers are
trying.
> *which is fascinating, when you think about it in light of "render
> unto Ceaser..." It's Aristotle, who though interest "sinful" because
> it reified the symbol of money as a good itself.
>
>> and that even the pursuit of wealth does not
>> necessarily produce wealth for the society.
>
> That's pretty much incredibly empirically indefensible, Truck.
No. It is not. see later...
> A rich person who hasn't just played the system for the wealth,
> who has actually managed to produce something enriches everybody
> in two ways - one, as seller of goods, and two, as buyer of goods.
>
> Money velocity is (understandably) much greater when there's
> more wealth. *Some* people :) just don't like the way in which it
> is distributed.
>
> As to "people playing the system", well... rent-seeking is an artifact
> of the sorts of things that Hayekians foam at the mouth about. Again,
> a Rockefeller made do without lobbyists. It is the reaction *to*
> a Rockefeller that creates a target-rich environment for lobbyists.
>
> Don't get me wrong - I do not think Hayek's is a complete economic
> theory. It assumes a tendency towards social-democracy style Euro
> Socialism (or more ominous replacements) as a thing to push against.
>
> And incredibly, as Fundamentalist religionism has replaced
> Libertarianism as the touchstone of Conservatism, not even
> the supply-siders really believe much in Hayek anymore. After
> all, his was a secondary theory to support the overthrow
> of the Evil (as in godless) Empire. So expect the Liberals to
> embrace him...
I am as Liberal as it gets. But we just have a misunderstanding around
the word "wealth". The economics "profession" is two faced about it. The
term "wealthy" is normally measured in ones capacity to forgo labor or to
command the labor of others. Yet the economists also refer to commodities
as wealth; never letting it be understood that labor (hence
commodities) can be commanded at the point of a gun or coerced by the
withholding of natural resource. Hayek's insinuation that accumulation of
wealth only occurs when the accumulating entity is _producing_ something
of value is incorrect. And the notion that the environment is protected
from those who seek to accumulate wealth is also not properly appreciated.
>> That erroneous proposition
>> was and still is the cornerstone of Hayek and the Austrians. This belief
>> that the pursuit of wealth always produces great wealth for all. It is
>> primarily a refusal to recognize the coercive and corrosive effects of
>> economic rent.
>
> Fair enough - although it really speaks to the sorts of rents
> we might find in a Five-Year Plan sort of economy - where power
> is based solely on personal relationships with The Great Center.
> That *is* rent-seeking, and the sort Hayek was rather explicit
> about, if not rather oblique about. That's the Big Thing behind all
> of Hayek - that explicit human control cannot replace market
> forces.
>
> I intend to find this book, but the synopsis is pretty good
> itself:
>
>
http://economics.gmu.edu/pboettke/pubs/calculation.html
>
> Search within the text for "Boettke's
> controversial interpretation is of a Soviet dictator"
>
> Indeed, when I first read George, this is what I noticed
> about George - that he was 100%% congruent with Hayek.
> I'd read "Machineries of Freedom", and didn't understand
> land rents at the time. If David Friedman can notice that....
>
>
>> The greatest wealth imaginable is the control of natural
>> resources.
>
> Nah. The productive value of land goes up because production
> increases dramatically, not because of the land itself.
Land values and land trade prices are influenced by factors other than
aggregate production. But you are correct in saying that the land itself
did not jump up and make itself more useful. I can't imagine that anyone
would ever claim such a thing. However, the proximate population
necessary to the division and specialization of labor and the value
created by that organization has an actual price. And that price is the
land rents. In order to participate in this bountiful harvest arising
from the division and specialization of labor it is necessary that people
get _CLOSE_ to one another. And this proximate population increases the
cost/value of land in the proximity.
> And
> this is only "unfair" if you do considerable wrestling with
> assumptions. It does not matter what you do, there will
> be contradictions in any system, so a few more to preserve
> absolute right to property are masked.
Blah, blah, blah....
There aren't a lot of assumptions being made here. If I control
(power) access to the land then I can derive personal wealth by charging
others for access to that which, without my control, they have would have
had free access. That seems rather a straight forward proposition. I can
become very wealthy indeed from this use of this power, and I will not
have increased the amount of good/goods in the least.
> In a way, control of natural resources is about *power*, not
> wealth.
Yet private wealth is easily attained by this exercise of power/control.
> Real wealth is transactional in nature - it is
> inherently social.
You are doing the economic two step using two different definitions of
wealth. One is goods and the other is the command/control/power.
> Drawing from science fiction :),
> Paul Atreides says "if you can destroy a thing, you
> can control a thing." That's power, not wealth. When
> OPEC expressed political rage by chinking the
> supply of oil, they paid for it in the long run.
They did???
> This is literally hubris. LBJ tried to eradicate poverty,
> "paid for it" by escalating in 'Nam, and lost on both fronts
> (by his lights, anyway).
Your treatment of the actions of LBJ are very confused. A "war on
poverty" and a "war on terror" are equally hubris. Wars are things
where you have a known enemy that can be defeated through military action.
> Section 8 housing does bear the mark
> of LBJ, and it's a more-Hayekian thing, and ... it works
> better. LBJ thought poverty a greater evil than its economic
> effect, and by an adjustment, a Great Society program became much
> more effective.
Yada yada yada....
> That's the *profound* thing at the core of Hayek - it is a
> plea for humility.
I do not get that impression. Totally free markets produce
private ownership of natural resources and the ability to coerce all of
mankind. As I have said we have a problem with wealth/power. Wealth is
fine so long as it does not prevent others from the accumulation of
wealth. Power produces all the private wealth that is needed by any
individual and it impoverishes the rest. The concept of wealth through
power is really what the words "trickle down" are all about.
>> Yet such control does not create wealth for anyone other than
>> the rentier. In the lust for more private wealth and power the rentier
>> will destroy that which he cannot own or create scarcity where none exists.
>>
>
> It is nothing more than an artifact of the legal system we presently
> have. But any person who does not participate in the eradication of
> scarcity is a big ole boogerhead. If there is a Utopia, it
> should be based on the idea of the eradication of scarcity, or
> at least moving scarcities up the Maslow hierarchy.
Scarcity cannot be eradicated unless you eradicate the population. All
scarcity is the result of competition for limited resources. The
resources are fixed and will not expand. The cost (seen as rent or a
consumption fee) of a natural resource use is contingent upon the
existence of a market (population) and the ability to contribute (pay).
Whosoever will offer the most contribution for the use of the resource
will be awarded the use of the resource in a reasonably free market. I
think you refer to the eradication of the adverse effects of scarcity as
opposed to scarcity itself.
> We have a beginning of that, and even *that* has psychological
> side effects which are unsettling...
This controlled scarcity is being practiced in the oil patch and in the
political arena as we speak. The people behind this rip off were the cheer
leaders for gas guzzling cars and the cheerleaders for a fake war and for
"borrowing". And now they all want the US government to _GIVE_ 1.4
trillion dollars worth of __**OUR**__ oil to the oil companies for a
pittance of $138B. And this continued controlled scarcity will be the
gift that keeps on giving for the fascists.
--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org/extend
