If there were justice in our industry ...

Wed Jul 16 16:33:14 PDT 2003

> 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.

Agreed.  The classic ones that don't behave as free
markets are electricity and gas.  Once they have established
footholds and business has built around them they cease to
obey the rules of a free market.  The organization that controls
them can demand outrageous prices since they are necessities
of doing business.  The regulations governing those services (and
which are being dismantled) were a fairly direct result experiences
with unregulated utilities in the late 1800s and early 1900s.

I'm of the opinion that niether purely market driven unregulated
economies nor at centrally controlled economies work well in
the long term.   I'm fairly certain the workable reality
which benefits the most people lays somewhere between.

-jeff

> 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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