Tuesday, September 04, 2012

Free To Choose Rebuttal

"I read the following review of Free To Choose by Vasper85 and wrote down the things I disagreed with."

I would like to thank Keith for taking the time to read and respond, as twitter debates are exceedingly restrictive.

"I wrote this as I read your review. I didn’t even actually read it all through first..."

Your sentiment reflects mine exactly as I was reading through Milton's work. I did persevere and finish it. And I salute you that you did also.

"I tell you to read Free To Choose because the ideas are so complicated it takes a book..."

I agree that some ideas are too complicated for twitter and no one is faulting you for telling me to read a book. For most that would be the end of the argument, for us it establishes a common ground to continue the conversation.

I'm sure objectivists would disagree with that assessment as Ayn Rand's distaste for libertarians was well known. But to an outside observer the similarities are striking which bother me to some degree.

"You make a mistake in calling Milton Friedman an “opponent.” He is one of the greatest men of the 20th century..."

I'm not keen on putting people on pedestals. Last I checked, MF was a man and therefore fallible like the rest of us. And some history, I discovered libertarianism through Ron Paul, like I suspect many of us did. I liked what he had to say, so I didn't arrive at my current view lightly. It took much reading and thinking.

I'm also wary of flag waving words like "liberty" and "freedom". Hayek himself writes about the subtle twists of semantics that socialists apply to such words to make them mean not what one would think. This is a common trap so I generally ignore arguments that involve me being for or against such nebulous and ill-defined concepts. If you'd like to define what you mean by liberty and then perhaps we could compare it to Milton's definition.

"You say that greed is not a good way to run affairs. You are incorrect for two reasons:
1. The free market can’t judge greed, nor any other motivation. Who even knows what are all the motivations someone has to buy or sell a pencil or make the chainsaw? The government surely can’t measure emotions, only dollars. If you care about greed, become a priest, not a politician."

1a. I agree, the market can't judge motivation especially when it is so large and far flung. The players do not know each other. So one couldn't really know if the market (or the goods derived) are "free" either (by free I mean voluntary). So the question becomes, how can I truly enter into any transaction voluntarily if I do not possess the information necessary to make a decision? To put it another way, if there was some aspect of production that I, if I knew about it, would affect my buying decision? If this information was suppressed by price, how is it still voluntary?

"2. The point is to have government let people keep the fruits of their labor. Self-interest unleashes maximum potential in people."

2a. To the first point, I can agree with that in so much as long as government treats all classes proportionately. To the second point typically the term "self-interest" is used synonymously with "greed" and "selfishness", perhaps a more enlightened view would be mastery, autonomy, purpose. Is it necessary to defend greed as a virtue to be a libertarian/objectivist?

"Page 2. I am sure Adam Smith knew of corporations, cartels and monopolies. His focus was on monopolies in government, but it is the same phenomenon as with corporations."

2a. Corporate structure (corporations as people) didn't exist in his time, but I'll concede the others. Interesting that you acknowledge that monopolies of government are essentially the same problem as monopolies of commerce.

"I am finding disagreements with nearly every sentence. I’m not going to respond to every one."

Nor would I expect you to. It took much work and time for me to put this together. There are specific things I want out of the ideology of libertarianism and it doesn't need or warrant a point by point redressing of my critique of Milton's work. Predominately what I want is a recognition that TNC's are just as dangerous to liberty (ones ability to conduct ones activities in a way that is not in conflict with his community values, freely) as governments are. And that we have a responsibility, both individual and communally. Whether you want to express that responsibility as directly helping your fellow man out when they fall on bad times or through taxes and a third party is mostly irrelevant, but to know that such a responsibility is not optional. That morality is not egoistic, but rather altruistic. Lastly I want an acknowledgement that there is a limit to economic growth.

"TNC are not equally as tyrannical as governments. Corporations get their money from people voluntarily..."

That goes back to how you can transact voluntarily with an entity you do not know and whose supply chain you cannot discern. There is a fundamental information asymmetry that exists that is not overcome through price alone. And as for choice, as I said in the previous post, if the industry standard is larceny and fraud, no choice exists. To put it another way, realistically we have little option but to transact with the current system and the choices they offer us.

And it leads to another question about force. If you force the government to relinquish the monopoly it has over force what is to prevent TNC's from picking up that monopoly directly? Libertarians, I get the sense, mostly feel that everyone will abide by the NAP. How do you enforce NAP? I feel that NAP is fully for the benefit of those that hold the power. I've also heard about hiring private security to enforce property rights, but it seems to me that it circles back to those with the money make the rules. Does NAP reconcile with hiring private security?

"Hayek would not have you go backwards. It was the free market that made America the world’s only superpower. With more freedom, harnessing everyone’s potential, comes faster progress."

The "American System" included quite heavy use of tariffs to protect infant industries. In fact it was Germany's adoption of the American System that lead to the upset of the Balance of Powers strategy employed by Britain and France that lead to WWI. And after both WWI and WW2 America was the only major intact economy, so held a de facto monopoly on manufactured goods.

Let's pretend that doesn't matter.

I would ask for what end? Faster progress meaning more profits? At what point do you as a society deem it acceptable to address the fundamental inequalities that exist with this progress? Both Hayek and Milton recognize that these inequalities are inevitable in a free market but neither have a solution other than a vague assertion that we'll all tend to get richer over time. And we can all see who gets richer and who gets ground under the jackboot.

Is it in fact impossible to harness everyone's potential and reduce inequality?

Also does the libertarian ideology have any room to acknowledge a limit to economic growth?

"Page 10. Friedman’s analogy about the Soviet appliance you didn’t understand...."

Perhaps I don't understand what happened in the USSR, that is certainly possible. I think that it is succinct to say that the Soviets lacked a good feedback mechanism (demand), they employed people to observe what people were buying/wearing and tried to gauge demand from that. And with the production quota, they were progressively using more material to construct products which in essence was attempting to emulate the economic growth represented by profit in a capitalistic system. This is my view was a mistake, as state capitalism without a price system will eventually fail quite spectacularly, this fact is well documented (re: economic calculation). What the soviet model was attempting to do was out-produce and out-grow the capitalist model (out-capitalize the capitalists) and it was doomed to fail because of allocation problems.

"Page 11. No one can make a pencil. The person who makes the chainsaw doesn’t also know how to harvest the rubber..."

MF's analogy presupposes we need an industrial supply chain, which presupposes we need industrial civilization. These are unexamined givens in his analogy that we are to accept if we are to accept his premise. By adding and emphasizing the word "industrially" I was pointing out MF's premise and I do not accept that we require an industrial supply chain nor industrial civilization.

"Page 14. The consumer knows more than price. The competitors can buy each others products and learn from each..."

Pg 14a That consumers (i.e. people) can know more than price if one possesses the materials, time and inclination to do so I am in complete agreement with. Being that consumers are price takers and live in an economic system where taking the best price confers a clear short term advantage, it is difficult, in the aggregate, to act in a manner that is advantageous to the environment and at the same time fulfill ones rational self-interest.

For example, given that for a stretch of forest, to clear-cut it would give a total ROI of 15% for 10 years and to selectively harvest and replant would give an ROI of 10% over the same period and there is no repercussions (legally speaking) between either scenario in the treatment of the privately owned land, it behooves the CEO to choose the plan with the highest ROI given the time horizon and his fiduciary duty to his shareholders. After which his options are vested and he can cash out.

From the production point of view, the cost to produce products from the timber when one does not have to internalize environmental costs is advantageous for the company and for the consumer in the short term. By the time it becomes apparent that this externalization of costs is leading to price distortion it is too late for that stretch of forest.

"Skipping a number of things I disagree with about advertising, Opec, military, whether he’s..."

I think that the military question should not be avoided. In other libertarian literature I have read they make the argument that any military should consist of free men, to be gathered for defense only, yet throughout the book I never saw Milton make that argument once. I wonder why he would spend so much time attacking the apparent life support of the poor and so little time attacking the overwhelming waste of the military?

"Okay I’ve now gone through and read the rest. I can say that you have a mix of missing the point, or sometimes arguing against a point he wasn’t making..."

If I was in fact arguing against straw men, I do apologize, I do make the effort to try not to fall into that trap. I did realize upon looking back I made an egregious accusation that MF regarded poverty as a moral failing and that coloured my arguments. This is not a libertarian position, but rather an objectivist position. I've retracted that in my original post.

MF primarily rails against government and unions and is pro-business in all of its forms. To be clear he makes no distinction between a market environment in which it is possible to know the actors and a global environment where business entities are artificial legal constructs with the same rights as people and it is nigh impossible to know actions behind their activities. This is problematic for me that MF does not apply his arguments equally between these entities and essentially gives these power-concentrating entities a pass. Again in other libertarian literature, they do address corporations, saying at the very least to remove the limited liability shielding protecting the shareholders.

"For example, having read through his book, can you not see how Social Security is a bad idea? Can you not see how vouchers for education for every child would be better? Can’t you see how big government leads to takeover by industry and corruption..."

Social security: I don't see it as an either/or proposition. Since community ties have essentially been eroded, some means must be available to look after our most vulnerable members of society. Is Social Security the most ideal? That is beside the point. They need to be taken care of and I feel that ripping away the safety net is not conducive to helping the poor and vulnerable escape destitution.

Vouchers for education would drive up the cost for the desirable schools putting them out of reach of the middle class and poor. The rich would no longer subsidize any education of the lower classes. So call a spade, a spade. If the rich don't want to pay for other peoples children, be honest about it, but let's not pretend that it is because this will better the education system. I don't deny there is a failing in free government schools but I am realistic enough to attribute some of the failing to deliberate cuts in education folksy fund increases in military spending and cuts in income taxes for the richest individuals and corporations. Does it not becomes a self-fulfilling prophecy when you announce that education is failing the children, then cut the funding, then announce that education is failing the children more, then cut the funding some more...so on and so forth. Why are private schools looking so good in comparison? Because they have money and those that can afford to pay expect no less.

Government is as good as the people who govern. Incentive for corruption stems from the private sector, transnational corporations. TNC's use govt as a tool to protect their business interests often by writing the legislation that gets passed. There is no accountability, politicians get in, serve a few terms, preside over favorable legislation, then exit to some cushy board of directors job. Which illustrates that you cannot be anti-govt without also being anti-corp. They are two-sides of the same coin. An interesting exercise would be to comb the media and see on which side the government acts against when it comes to protests and strikes. Invariably it is on the side of business.

Another glaring example of the power that corporations hold over individuals is best illustrated by journalists Jan Wong's battle against Globe and Mail and Manulife. She was suffering from depression (clinically diagnosed) and both entities basically called her a liar and cut off her sick pay on a number of occasions. When she wrote a book about workplace depression years later Globe & Mail killed the deal with the publisher Double Day with a phone call to DD's lawyers (which also happened to be Jan Wong's lawyers as she paid for half of the costs). This was after the book was done and ready to go to copy writing. This is a chilling display of effects of corporations on free speech and the "free" market.

First 30 minutes, click on the "listen" button. This is but one of numerous examples of abuses of corporate power and the scary thing is no one would of heard of any of this had Jan Wong not stuck to her guns and refused to sign "confidentiality" agreements. Most people would have, with the money that was on the line (DD tried to tie in her compensation with the agreement). Most people do not have the luxury to fight.

Orphans: Perhaps that was unfair of me, but in the context of MF's examples he states that morality stops at the individual and that family should be cared for by those with familial bonds. The obvious blind-spot is those without family. That private religious charities should step into the gap puts one at the mercy of a religious institution and whomever funds the private charity. Say what you will about government charity it at least has the veneer of impartiality.

Crime: It is primarily because of inequality, so in defending a system that admits that they would rather have "freedom and inequality" than "equality and slavery" (as quoted from MF's work and another false dichotomy) it illustrates a conflict of interest.

"You ask many good questions, but I assure you they have answers. You seem to have read a lot. I can only suggest that you keep reading and thinking."

It is my intention to continue to do so.

"Your major focus is on income inequality, and we can argue more about that, but let’s look at the existing welfare state as a total disaster and repeal 90% of it. If a country goes bankrupt “helping the poor”, then it can no longer help the poor nor do anything else."

If by repealing 90% of it includes repealing military spending perhaps that is a compromise I'd be willing to entertain and I believe that there are libertarian writings that support this view. But let it not be said that social programs are what is bankrupting the US. It is military spending (non-productive in the truest sense) and disproportional tax cuts for those that need it least.

1 comment:

KeithCu said...

I posted a response here: