Comment by CPLX 2 days ago
> There are reams of economic literature trying to estimate whether government intervention in the market was a good idea. Most of the time it doesn't turn out great.
These sentences are just propaganda. There’s no factual basis for them.
There are no markets without government intervention. Statements like this are more like religious incantations than appeals to “research” of some kind.
Yes they do. Consider weed. It was well established before being legalized. Legalization brought higher taxes and interference. The black market continues as an alternative to the free one.
> There are no markets without government intervention.
David Friedmann (and others) would like to object, I am sure. See eg http://daviddfriedman.com/Legal%20Systems/LegalSystemsConten... for how many legal systems work without (or despite!) government intervention.
Functional markets require a strong mechanism for protection of property rights. The fact that we have some historical systems where that has taken a different form than a conventional government doesn't negate that the only practical mechanism that we have to protect property rights and support markets is a government.
Ancap fantasies aside, of course.
And then, there's lots of situations where externalities exist. If I poop in the river and you're downstream, it costs me nothing; I have no reason to stop.
> Functional markets require a strong mechanism for protection of property rights. The fact that we have some historical systems where that has taken a different form than a conventional government doesn't negate that the only practical mechanism that we have to protect property rights and support markets is a government.
Even if we grant that argument, that's at most an argument in favour of a minimalist nightwatchmen state. Not the full blown Leviathan.
> And then, there's lots of situations where externalities exist. If I poop in the river and you're downstream, it costs me nothing; I have no reason to stop.
> There are no markets without government intervention
What does this mean?
It means that markets rely on the rule of law. From monopoly regulation to the prohibition on outright theft, markets literally cannot exist without governance.
I think law and order needs to exist, or enforced rules, but that's not "government intervention".
It’s rather vague as to where the line is, but as you say, ‘government intervention’ is a term with political baggage in financial theory.
> but that's not "government intervention"
I would argue it 100% is. You can make MUCH more money if you steal or perhaps keep slaves. We're just so used to these preventative measures that we don't really consider them, but this is, in essence, a huge "tax" on the private sector.
Playing by the rules is very expensive as compared to not.
If you're skeptical about whether governance is required for markets to function, launch your next startup on the darkweb or in a failed state. I fail to see how one could imagine any kind of healthy market operating without basic governance, reliable infrastructure etc. It's a religious idea (anarchocaptialism or something similar) at that point.
Past that, actually engaging with business (as a customer or employee) should be a rapid reminder of how much we have regulation to thank for. From not being poisoned (immediately or over the course of a lifetime) by our food, burned alive by non-fire retardant furniture (and the absence of a fire service), to having weekends off, our wages reliably paid, to being free from physical and the more obvious forms of psychological abuse. It's right there - you engage with the rights and privileges afforded by legislation daily.
Just astonishing to me that this kind of market fundamentalism is still actively engaged in. People can disagree on the extent and fundamental structure of government, but to deny it's role in the basic functioning of business in a society as complex as ours seems outright absurd.
As people get richer they demand better quality stuff and can afford it.
That includes taking weekends off.
It's perfectly legal where I live to work on the weekend. There's also no minimum wage here. Yet, most people get weekends off and get paid more than zero.
It's also entirely legal here to offer jobs without reliable pay (as long as the contract doesn't promise reliable pay).
There's plenty of long term poisonous food available in all countries: you can mainline eg pure sugar to your heart's content. Most people in most countries opt for tastier and healthier fare, because they can afford it. There's also plenty of immediately poisonous substances available, like strong alcohol.
People also regularly opt for more than the legal minimum in terms of furniture safety. Eg Ikea sells you kits to bolt your cabinet to the wall, so it doesn't fall on your child trying to climb up on it. So the legal minimum's don't seem particularly binding: people voluntarily exceed them.
> Just astonishing to me that this kind of market fundamentalism is still actively engaged in. People can disagree on the extent and fundamental structure of government, but to deny it's role in the basic functioning of business in a society as complex as ours seems outright absurd.
Governments do stick their hands into many pies, but that doesn't mean that them doing that is required by some physical or natural law.
> If you're skeptical about whether governance is required for markets to function, launch your next startup on the darkweb or in a failed state.
Yes, governments control some of the best real estate on earth. That doesn't mean they necessarily contributed much to that happy state of affairs; often just the opposite.
Btw, many companies are trying to escape even basic functions provided by government, and are going for private arbitration instead, because it's more efficient.
Clearly not true as markets exist outside the government (black markets).
But that’s beside the point. Even if most markets rely on government intervention, it tells you nothing about how much intervention is optimal.
It’s like saying “no human survives without food”, which is true but tells you nothing as to how much food is good.
Someone must police the rules of the market I suppose? Also, a truly free market benefits those who own the market, no?
> There are no markets without government intervention.
Of course there are. Black markets pop up everywhere to route around government intervention