Fen, it feels like you responded before you really read what I said.
No, my objection remains the same even with "econonies." Yes, the government monitors the economy even in a free market system, keeps the peace and upholds the law (ideally), but it is not in a position to run that economy, as in, make decisions about how it should go or whether the resources are going to the right place. You depart from a free market right away if the government begins making result-based decisions, whether in the form of "too much monies are concentrated there, they should be moved here" or in another vein "We need to make sure X amount of focus is put here in our economy." All of that requires either redistribution (through taxation or otherwise) or else systemic funneling such as by promoting certain areas through government assistance. It's not "free" in the sense you mean it if the government is making value judgements about how the particulars are going.
This is like a sharp jumping moment Where exactly do you think I inserted the government "running" the economy in a free market?
Saying the free market runs the economy is not saying that the government of a country with a free market is running the economy. Nor is setting rules and enforcing them remotely the same thing as influencing the direction of the economy in the way that a central government control function operations.
Everything you seem to be describing is a function of a planned economy. A market economy doesn't move assets to their most efficient use because some government decided what was efficient and moved them there, it does so because the people in the economy are free to trade for the best deal they can get, which innately moves the assets they have to the uses where the counter party best compensates them.
Chaotically =/= irrationally. In fact it can never mean that in the real world. *** Free markets are practically by definition a chaotic system, perhaps doubly so; they operate on fluid principles in some respects, flowing, ebbing, and trickling in ways that are hard to detect and quantify, and all of these fluctuations are themselves based almost exclusively on human psychology, which is a far more chaotic and untraceable system than liquid H2O molecules. Chaotic in this sense was a statement about its structure, not a value judgement.
I understand what is meant by a chaotic system. I also understand what it means for something to move chaotically. Neither situation applies to a free market. Everyone in the market is moving based on largely predictable goals and generally the primary chaos elements are from lack of good information or slight irrationality on the part of one or more players. There is no "chaos" or unpredictibility involved in figuring out who needs a job, or who's hiring, or how much they have to pay to hire people. The medical needs of a population are largely predictable. How much food is going to be grown and how it's going to be distributed isn't chaotic, it's predictable. Walmart's shelves aren't randomly stocked and filled, but rather are deliberately stocked with models of great sophistication. Next years profits are almost always tied to trends present this year.
I assume you're over relying on the description of financial markets (like a stock market) and forgetting everything else that makes up a free market, every personal decision and transaction. But even in the financial markets there's not much chaos. Bad news drops prices - predictably, and good news raises them.
What you see as "chaos" is almost always just imperfect information transmission.
Everything is "run" its just run from the bottom up, with every transaction at the bottom being between interested parties protecting their own interest.
That's like saying you're running your business if the CEO quits and all employees get to determine for themselves what projects they think will personally earn them the best income.
It's really not. Now if you posit there's no company, then it's exactly the same. The self employed do in fact do exactly that. But your "model" implies that you keep getting paid by a company in exchange for doing nothing the company wants. That's not a free market, that's a bizarre version of a planned economy.
Now that said, for extremely creative endeavors that style may actually work. Give your creative geniuses the free reign to produce what they want and monetize it on the back end. But even there there's a time limit on how long you wait.
They might very well find clever ways to earn a living within that company - but that leaves out several parts of corporate operation that we normally take for granted (bottom line, pay equity, sustainability, etc). Even if it worked, it surely could not be called "running a company." That sort of collective activity might better be called by some other term, not sure what it should be.
Again, that's actually not collective activity or even transactional activity. That's welfare. Getting paid for doing whatever you want.
For this to be an example of a free market, there has to be a rational deal between the company and these employees that benefits each. Basically you "left out" that the company has to get something out of the trade worth more than what it pays (ie, the literal free market exchange).
Kind of like how every single student at a college is running their own schedule. Sure there's a central system to determine who gets in demand classes, but each student is making their own determinations of which and what classes fit their needs based on their own goals (and requirements to graduate). It's not true to say "no one at all decides" when it's literally everyone involved deciding.
It's tough to address these analogies, and even my above attempt is imperfect because I'm trying to keep the parallel we're discussing, but it doesn't work so well. But to go with the student analogy, sure they can pick whatever courses they want, and it's collective in that sense.
It's not "collective" its aggregate. There is no group decision. But the aggregation of the individual decisions results in group patterns. If lots of students want to take philosophy maybe they add a section, if no one wants basket weaving maybe they drop it. This is exactly the opposite of the planned economy where the central group decides w need 3 basket weavings and 2 philosphies, even if 10 times more students make the "wrong" choice and want to take philosophy.
And why do they do that? Maybe the central planner was a basket weaver, maybe they really need more baskets and who cars if the students get to study what they want? Maybe they took a bribe from the philosophers guild to limit new competition.
But to make it more apples to apples we must also assert that the students are also the ones creating the syllabus prior to picking their courses, and some of them are even opting into teaching the courses, so that the entire educational model at this hypothetical school is bottom-up: they decide what they want to learn, how to learn it, and they then attend.
No, you don't need any of that to make an apples to apples comparison. It was already apples to apples.
But, let's assume you do add that. If what the students are really interested in is a cooperative education where each teaches the other, that's a model that could work for some things. Effectively peer tutoring. In a free market it will arise, it may supplant traditional schools if they are no longer in demand, it may not. It won't come about in a central planning economy unless someone at the top decides to impose it. But if it does it won't be because it's supplanted the old order because the students found it more useful, just because the central planners decided to change (and that can be arbitrary or non-arbitrary)
There can be no "master" in this situation, because in our analogy that would be government, telling people what they should be learning. But the "free market" as we mean it here means the government (i.e. school admin) stays out of it and lets people pursue their business how they want. It observes, maybe gives advice, but does not mandate or issue instructions. And then this hypothetical school admin is supposed to claim that the students are getting a first-rate education, because that's the draw, right? Except what if they aren't? What if their activities, furious and involved as they may be, are in fact not getting them a good education?
Well you've walked through a large amount of space to get there, but fundamentally you seem to think a "school" has some kind of credentialing role if the students are running a peer to peer network? The point of the example was to show you a process that was understandable, not to defend everything about a university as if it is a free market paradigm (big secret it's not).
In this case, much like the reputation of an online university, the worth of your credentials is tied to the results of others coming from that environment. I mean how does one evaluate whether someone is an elite hacker? Do you look at their graduate school? Do you look at their success? If you're looking to hire a reformed hacker as a security expert, might you consider their prominence in hacker circles or boards as a form of credential?
In your example the "university" could say what ever it wants, but the results are what it's word will be judged on.
And then we need to ask - 'good' based on what standard? Aha. That is where the analogy runs into trouble, because while there is no hard metric in schools that matters (grades are arbitrarily defined) I don't think you'll find anyone that would agree that any old set of learning is just as good as another qualitatively.
Except, you only ran into trouble because you made the trouble for yourself. Because you ran a simple analogy demonstrating how individual choices can still drive aggregate results, into a morass of questioning everything that could conceivably change without really considering what any of those changes really meant. The standard in a free market is always going to be a test of value, is what you learned valuable to me, and is what I'm willing to trade for your services valuable to you.
Whereas in business we have the opposite result, which is that it is very easy to quantitatively measure money in and money out as a metric, but where there is rarely talk of that qualitative metric.
We have the same result. Whether your services are based on your education or something else, it's still a measure of the value you can provide to me, and what value I'm willing to pay you for it.
Lots of money moving = good result? That does not in fact follow. It might be a necessary component of a good economy, but it is not sufficient.
Again, this misses what's going on. The amount or rate of money movements tells you nothing about why the money is moving. A bad centrally planned economy may constantly move money to make hiding bribes easier. A market economy could smoothly run on barter to a great extent. What makes it a market economy, is the individual decision that making a trade is better for you than not making a trade.
But you cannot have a qualitiative metric for success in an economy with a "dean of students" and a "chair of the department" whose jobs it is to determine whether what the students are up to is in fact helping them. This is putting aside that other issue of whether schools in face care about that all the time...
And that's why you fail. If your dean gives you A's because they determine that what you learn is helping you, does that mean your basket weaving degree entitles you to success in a world that doesn't need baskets?
Yes sir, you've got it exactly. In fact I will go further - every single action you ever take in your entire life should be evaluated by reference to a collective goal.
No. You're not entitled to demand I subvert my goals to yours or anyone else's or the "collectives'." We're all entitled to the pursuit of happiness. That means if I want to be a crappy architect instead of the best brain surgeon, I get o make that choice. I'm not your slave.
And we can go even further than that: people who do not believe they need to take into account collective goals when making individual decisions are usually classed under terms like "antisocial", and when this choice is based on a lack of caring about the collective the term can become "sociopathic." That is, on an individual psychological level. On a group level it's tougher to come up with cogent names for these things. Also bear in mind I don't mean to personally attack you or anyone specific, but rather I am suggesting that psychological terms we take for granted in all areas of life other than business seem to somehow get forgotten about when talking about money. Funny, that.
First, this is a gross oversimplification and borderline offensive fantasy. Lot's of people act in what they believe is society's interest, where other's completely disagree. The owner of the lumber mill is bringing jobs to a community and lumber to people who need it, but to the eco-activist they're destroying the environment They can both be right. There are lots of social goods and bads that a single act can serve. That doesn't make the actors anti-social.
Free market's have laws to try and correct to these social problems. Transparency laws exist to make sharing certain information about a deal mandatory. Other laws exist to tie externalities to decision making, so that the person that is polluting bears the costs of pollution in making their decision.
Every single deal is entered into because the two sides think they are getting something more valuable than what they are trading (assuming basic efficiency requirements exist - like enforceability of contracts).
They may think it all they want, but that doesn't make it true. I can go rip off a little kid who "agrees" to trade baseball cards with me (we had a thread about that recently) and is very happy about the trade, except that I know I'm winning out big-time. Most people here were quite clear that this is unethical. But what if, somehow or other, the two of us actually both do win out, but by the result of our trade someone else ends up a big loser? Free market economics suggests that this is literally impossible, whereas I am quite sure that it is in fact inevitable.
I agree, you can't in fact ensure that every trade is good. You can create the rules so that fairness is possible, but you can't eliminate stupidity or every information imbalance. We can and do punish abuses. But it's an odd criticism for an advocate of central planning to make. The reality of central planning is that it causes many more bad deals because the persons making the decisions aren't the ones that have to live with the consequences.
And no, only certain classes of decisions are ever made on the bottom level - buying retail goods or buying/selling services. It is literally not possible when deciding between Apple and Samsung for your phone to make systemic decisions regarding which sectors of the economy are lacking resources, which areas of the country are having problems, whether there are enough jobs of certain kinds at the right time of year, and whether certain areas of the economy are national necessities and must be supported or bolstered at all costs (this can range from anything like foodstuffs to "too big to fail").
You seem to want to hang a lot on your decision about a smart phone.
I think your confusing a whole host of issues. When you choose to buy a phone, you're making a decision about which phones is the better value, and whether you get enough value from the device to make it worthwhile. Given that we all literally use the devices in all phases of business and entertainment it seems pretty clear you do get that value.
Your choice of phone does go to allocation of resources. Specifically, it allocates money to that manufacturer, and they use that money to pay the people that developed the tech and to fund new tech so you'll buy their phones in the future, they build factories and they acquire resources. The places their workers live get a boost in income, houses get built, taxes paid, schools and hospitals expand and their owners get fat checks that they then look to plow into other investments (and this ALWAYS happens, even if all they do is stick in a bank or the markets that moves it into other investments).
Does it decide to send money to poor people in the middle of no where? Sometimes. Those kinds of places generally make good targets for low cos factories. But it's not the job of your purchase of an iphone, to decide that means that farmers in Iowa need help.
There is no sense at all in which these are "decisions that get made" by everyday transactions. All you're voting for when you go to the store is which shampoo company will do better, and in the job market which company will get your work. Those are very minor instances of decision-making, even if you add all those up into a collective.
The global haircare market (had to look this up) was $85.5 billion dollars in 2017. So yes it really does add up in the collective.
When you consider that you buy 1000's of products a year, and that there are 6 billion people on the Earth that need to eat every day, have shelter and have other things, those "small" decisions really do add up to be giant and material trends. And even a slight preference change can make a big swing. For example, the organic shampoo market went over a $1 billion in 2018, and that's a direct reaction to those little choices.
They are very important, but only one particular class of decisions; certainly not the sort of decisions that constitute "running" anything in any intelligible sense. I am pretty sure our mathematics is nowhere near sophisticated to even offer up any kind of proof that it is theoretically possibly for collective buying/selling to cover the bases of "running" like a CEO would do. Boy would you need a lot of information to calculate whether that's even possible, so it strikes me as really wild that you (I suppose) would argue not only that it's possible but that is certainly the best way to do things. I guess it's possible, although I *really* don't think so.
Again you attribute the faults of central planning to the free market. You're correct that for the government or a group of decision makers to do this involves a near impossible data crunch.
Lucky for us a free market doesn't. It doesn't take complex mathematics and a full understanding of global trends to move into a town and see a need for a barber shop, or a grocery store or dry cleaner. It doesn't take genius level IQ to see that Lawyers make more than History Professors and make a choice in which graduate school to goto. Realizing that a store is better run than the local competitors and a great model for franchising does take some knowledge and some math, but hardly the world beater level you're arguing for.
It doesn't take any kind of smarts to realize that when your local plant shuts down and there are job postings in the paper for a town 30 miles away that maybe that's where you should look for a new job.
And the aggregate impact of these decisions ends up being a market economy generating wealth at pretty good clip.
