If there were justice in our industry ...

Wed Jul 16 12:16:56 PDT 2003

--- Jeff Younker <jeff at drinktomi.com> wrote:
> > Market forces are whats best for the long term health of the
> economy.
> > Societies have proven that protectionism doesn't work.  The longer
> you
> wait
> > the harder the pain is.  Change is painful, but inevitable.
> 
> Ummm.  I can't let that one go.  That's a logical fallicy.

--- Jeff Younker <jeff at drinktomi.com> wrote:
> > Market forces are whats best for the long term health of the
> economy.
> > Societies have proven that protectionism doesn't work.  The longer
> you
> wait
> > the harder the pain is.  Change is painful, but inevitable.
> 
> Ummm.  I can't let that one go.  That's a logical fallicy.

Me either, so, at the risk of fanning the flames...

We need to be careful not to debate at too high a level of abstraction,
and we need to back our statements up with empirical examples.

I think we can safely say that "Market forces *sometimes* create
evolution".  Distinguishing when they actually help, though, is
difficult.  Market forces don't, empirically, seem to make better
schools, hospitals, or prisons.  They might or might not help for
evolution of computer science or the U.S. economy in this particular
case.  As for the world (Indian, Chinese, Russian) economy, who cares? 
Not me, quite honestly, as long as we are doing well here.

Another example of bad private industry:  toll roads, which actually
constrict trade and growth, even though they are a plausible market
driven decision by someone who controls the land.  Not many private
highways in the U.S., huh?  Ever wonder why?

Market forces are also dependent on strong political protection and
enforcement and never exist in a vacuum.  Widespread bribery, for
example, is just a "market reaction", but it inevitably makes for a
more backward nation.  Without strong regulation and checks and
balances, bribery and corruption thrive in both the public and private
sectors.  Without a police force, people just rob other people.

Left to their own, "market driven", motivations, companies will also 
*always* seek to create a monopoly, thus eliminating market forces.  It
takes political intervention to set things straight (hence anti-trust
laws).

Protectionism, also, sometimes *does* work.  The huge industrial
expansion of the U.S. in the late 19th and early 20th century was
partly driven by high protectionist tariffs.  Then, the Republicans
supported tariffs (they owned local companies) but the Democrats wanted
lower tariffs (their constituency wanted cheaper consumer goods).  Kind
of ironic.  But don't give me that "Protectionism never works" hoo-ha.

Once might also argue that the Northeast U.S. has traditionally been
stronger in industry because of the Utopian inclinations of its
founders, which created things like public schools and relatively
un-corrupt government.  The South has always had cheaper labor, but it
has also lacked the infrastructure, education, and quality government
that were created by public institutions in the North.

Capitalism and free enterprise is a key ingredient in any healthy
nation--but *please* don't be dogmatic about it.

Ducking, ....
W

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