Gas Caps

And the price controls begin in HI...

Hawaii will begin enforcing a cap on the wholesale price of gasoline next week, hoping to curb the sting of the nation's highest gas costs.

The limit would be the first time a state has capped the price of gasoline — a move critics warn could lead to supply shortages.

But many Hawaii residents are just looking for some relief from soaring costs.

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You see, here is the neat

You see, here is the neat thing about free markets. They make countries rich. Once they start doing this, politicians and those they assist with their power (unions, business cartels, monopolies, special interests, etc) attach themselves to this system that creates such wealth and freedom of choice. They leech it, use it to their own ends, and twist its original form to one that only resembles free markets in form. All the while this process is hidden by spin, doublespeak, and political shadow games. The result of such medicine mixing is a quasi free market state (mercantilist, corporatist, fascist) that protects the rich and political, and only allows a trickle of wealth for most others. The vast number of people are no longer able to easily or at all perform the basic tasks that are necassery for the creation of individual wealth. Their rights of person and property become steadily less secure the more the state involves itself. Its convenient for the socialists and ignorant to attack this so called "evil capitalism" because to most people it looks like a real free market and thats what they think it is. They usually are either too uninformed, uneduacated, ignorant to understand ethe fundamental differences. Thus markets and trade get blamed for the corruption caused by their new master. The above is the case in most of Latin America (Mexico, Brazil, Peru, Bolivia, Argentina, etc) , Russia, India, China, and much of the rest of the developing world. This system bears little resemblence to the sound free market development and minimal government intrusion that existed in much of the West up until its steady erosion during the recent past.

For excellent treatises that go into much further detail I would recomend to anyone interested the following books: "Liberty for latin America" by Alvaro Vargas Llosa (a good primer), "The other path" by Hernando De Soto, "The Mystery of capital" also by Hernando De Soto. These books deal mainly with Latin America, but their examples and arguments could easily be applied to nay other place of similiar traits.

What I’m driving at is

What I’m driving at is that the notion of forcing a market upon people is absurd. If you meant that the majority was prevented from forcibly imposing its will on a minority via regulation, nationalization of industry, and high taxes, then say so. But don’t talk nonsense.

this is simply nitpicking- it's very clear what I was talking about. To thrust your definition of market into the conversation is fruitless. If you think that the washington consensus doesn't impose markets then I suppose you can make that argument, but the sentence you cite was in the context of a long, crystal clear, case I was making about the washington consensus. Nevertheless, to play the game, I doubt you're right that a market-syle exchange is simply equivalent to exchange. For one thing, market-style exchange implies competition (and probably the absence of governmental regulation.) Really we're just talking about the colloquial use of the word, and I think I used it fine.

I think the simple fact of the matter is that it was anything but cheap. Slavery can be (and has been) empirically demostrated to be very expensive.

this sort of expense should be seen in the context of benefits and expected returns. Slavery was not expensive (at least not in the US, which is the only country I've seriously looked at) primarily because it was very economically succesulf. Their labor was cheaply extracted and the proifts wer enormous. "Cross of Gold" (i think that's the title) makes this point extremely thoroughly.

It clearly impoverished the Soviet Union

slavery did? Please explain...

(matt27’s contention to the contrary. I went there in 1990 and then again in 1997. It was a much nicer place in 1997).

surely you're joking trying to provide this as evidence. I don't think you're lying (not that it matter for the point though)- Brazil probably seems alot "nicer" than a more egalitarian 3rd world country because we're visiting the nice areas, thus as Russia tended back toward the 3rd world unequal model, it's certainly plausible that you liked it more when you were hanging out with the 3% of rich people.

Matt

Matt - let's first untangle

Matt - let's first untangle my two statements of fact. First, I do not know what calculus one might use to show that killing millions of people is economic. The laws of economics are clear, and empirically verified, that more people equals more growth and more opportunity. I need not say anything about the morality of it, it is simply impossible for a society to be better off economically by killing a significant portion of it's population.

The second statement - that the Soviet industrialization was a failure, is also backed by empirical data. In the years leading up to the Bolshevik Revolution, Russia was industrializing quite rapidly, more rapidly than later years. Other nations that have since industrialized under semi-free markets have industrialized far more rapidly than the USSR ever did. In addition, the Soviet system consumed more capital than it built. If you can show me data that suggests otherwise I'd love to see it.

Mandos -
And this differs from almost every industrialization…how, exactly?

Well for one thing, every other industrialization has exports to the rest of the world, for another Soviet safety records are worse per capita than even the height of "Robber Baron" U.S., and lastly every other industrialization actually occurred someplace other than the pages of Pravda.

I mean, you guys have an incredibly rosy picture of the history of “capitalist” industrialization

If by "rosy" you mean better than subsistence farming, then I plead guilty. But don't think for a moment that I want to go back to living in a "manufacturing" economy. Nor do I have any intention of going back to operating a punch press.

yeah, but out here in the real world, we know the massive human suffering and displacement it wrought in order to bring about industrialization at a slower pace than the Soviets.

Out where in the real world? The only world I know saw decreases in mortality rates and increases in overall health, increases in leisure time, and greater wealth to enjoy that leisure time - all coinciding with industrialization in all of the semi-free market nations. If you have some methodology for showing that the correlation between health, leisure time and wealth with industrialization in the semi-free market nations is just a fluke, please show me.

"Cheaply extract their

"Cheaply extract their labor" is a far cry from "a big plus for the slavers".

I am arguing against the truth of the former, not the latter. Certain individuals may be better at slaveholding than other activities, so they will be worse off in the absence of slavery. So what?

A society with a slave system must expend a significant amount of energy to maintain it (one aspect of the civil war was that the Northern states were no longer helping the Southern states in that regard, which pissed them off. See, for example, South Carolina's declaration of independence). That is energy that could otherwise be used constructively.

Yes but are you considering

Yes but are you considering the minority doing the cheap labour extraction here? I bet for them it's a great deal in one way or another. I'm not sure how you're evaluating expense here. Expense in terms of total production of the country? Maybe. Expense in terms of the minority benefitting? I think not. It's hard to imagine slavery being anything but a big plus for the slavers. Until the slaves/cheap labour decides to tax the minority in some way.

Mandos, You've hit upon a

Mandos,

You've hit upon a key phrase, here: "cheaply extract their labor".

I think the simple fact of the matter is that it was anything but cheap. Slavery can be (and has been) empirically demostrated to be very expensive. It clearly impoverished the Soviet Union (matt27's contention to the contrary. I went there in 1990 and then again in 1997. It was a much nicer place in 1997). As far as in the antebellum south, there's lots of evidence to suggest that they're still in recovery from it.

Abe

That means nothing. It

That means nothing. It could also be rephrased as the "minority prevented the majority from claiming its right due." The fact is, it took immense brutality against large populations in order to cheaply extract their labour.

What I'm driving at is that

What I'm driving at is that the notion of forcing a market upon people is absurd. If you meant that the majority was prevented from forcibly imposing its will on a minority via regulation, nationalization of industry, and high taxes, then say so. But don't talk nonsense.

People were punished with

People were punished with death or imprisonment for failure to exchange?

I don't know what you're driving at, here. If you're arguing that these so-called communist countries already had markets then I'd be interested to know why you think we invaded. If you'd like to redifine markets so that it just means exchange and defines any social structure which doesn't solely depend on isolated subsistance farmers who produce everything they need, then I'd urge you to simply consider my above posts using the standard understanding of "free markets"- deregulation, reduced public sector spending, privatization, legislated corporate structures, etc.

Matt

Markets have been imposed by

Markets have been imposed by force on many countries...

People were punished with death or imprisonment for failure to exchange?

Abe: That article is a much

Abe: That article is a much better article than the previous mises.org article posted here.

But 40 years is how much total recoverable oil there is at current depletion, assuming no economic growth (and hence consumption growth). It doesn't refer to how FAST you can extract it out of the ground, which is still the province of geologists and petroleum engineers. The entire claim of Peak Oil rests on the fact that the rate of extraction will decline--and probably decline faster than we can retrofit the economy to handle.

So, OK, you make the switch from light sweet crude to heavy sour crude, which yields up gasoline with a lot more difficulty, and yields up diesel more easily (not to mention other varying fractions). This means that you have to retrofit a massive refinery industry---takes time, energy, planning, and is expensive---and you still have to retrofit the American and Chinese automobile industries at the very least. Worse problems for bitumen and so on. Oil shale has a negative Energy Returned On Energy Invested, so it's really only economical if you believe in perpetual motion machines.

Assuming you can swing this IN TIME for the negative effects of peak oil to occur. Remember, that the claim is that the PRODUCTION PEAK will be rapid and risks being unexpected.

"Meanwhile, technology will continue to march forward, and necessity will drive improvements in the refining and collection processes for each of those grades of petroleum reserves."

Faith-based! There's a risk you won't find it in time! There's a risk you won't understand that Mount Vesuvius is about to kill you until it's too late! How much are you willing to risk that Julian Simon will always be right? And who has to pay the price if he's even partially wrong? I suspect you believe you won't.

You'd be right if we could reliably say that the price of gas would rise steadily over time, preferable in step with the project population peak occuring at some point this century. But can you reliably say that?

But it does have much to do

But it does have much to do with the principles behind this site and many others like it. I certainly agree with you that much of what passes for free markets in the western world today is quite harsh and “inequitable” but much of these same traits are not the result of the free market side alone, but of its hellmade wedding to the state and its nature. Underneath such abberations one can in fact see the beneficial workings of the market as espoused by libertarians and even market anarchists.

I'm unconvinced on this point. The "market" is so heavily distorted by massive state intervention, that I have no idea what there is to reccomend it. Here's a good relevant quote from another post I just made:
"The public sector contribution is practically impossible to overestimate, everything the massive military spending which always magically produces “dual use” technologies that are suddenly sold at private profit on the hi-tech market, to the enforcement of international patents (often on drugs and seeds developed by indiginous peoples who simply lacked the proper “capitalist instinct” to internationally patent them) to the massive federal highway project which enables large businesses to catch a break on their transportation cost."

Yes, so what? Whats wrong with price? The one who asks this question needs an incentive to act, and even more so he needs a recompense for his financial and time efforts at making shoes. He’ll get these by making those shoes good enough for people to want to buy them. This is basic stuff here and I can’t at all see whats so wrong with such a relationship.

Well, we're talking about things that are problematic under the system. You obvsiouly think that this is a bullet that this is fair to bite, but is it ideal? I'd certainly say, all else being equal, a structure which provides shoes to a kid who has none and has to walk to school in the Snow in central Montana, rather than one which gives the same pair of shoes to a rich kid who already has 100 and may never wear them is the more just system. A system which doesn't (i.e. capitalism in some cases) has a serious flaw. It may be the case that that's not a flaw we can overcome (as I'm sure some would argue) and that's it's justifiable as such (and on the basis of other factors.) However, we can certainly agree (I'd think) that if a system were able to distribute based on the marginal utility that the goods would provide to the person, rather than just the marginal utility that it would provide given one's disposable income and opportunity costs it would be ideal.

No, the entirely forced system that existed in the soviet state, which was fully directed from above by central planners in the absence of a market, is not the same as the market directed industrialization that existed under the west during the IR. Read some good history books. The differences are quite glaring between the two.

sure there are, and I've read plenty of good history books. As I wrote, Lenin himself said Russia was state capitalist, and I'm not convinced that the differences between the USSR and places we're willing to call capitalist (like Singapore for instance) are all that great. There are also important paralells with the US. I did say "mildly similar" and I stand by it.

We can indeed talk about inefficiency all we want, or we could look at all the indisputable examples of rising standards of living in every place where markets are introduced.

something tells me you don't mean what you're saying here. Honduras had a market structure imposed on it in the 80s (in fact, it was the perfect neoliberal market under IMF austerity) and Infant Mortality shot up. This evidence is hardly indisputible. Perhaps you'd like to discuss a concrete case that you'd consider an "indisputable example" of market success within the last 50 years? Just pick your best case study (one Caveat- it has to be a real country, and not a city-state already heavily inlaid with European infrastructure, like Luxemborg.) I think it'd be illuminating to discuss your best case if you think there are truly so many exmaples.

Again, I implore you to start with a good book on the function of free markets throughout history to see that they do not lead to death squads and mass starvation!

If you think that US is a good example, and you'll concede that the US backed death squads in El Salavdor (and I don't know who doesn't concede this, though few bring it up) then I'm not sure how you could argue this point. Markets have been imposed by force on many countries, most notably in Central America (though it's pretty heavy competition when you look around the world) and they have been sustained by force, often because the people find the institutionalized inequality and horrific social conseuqnces to be intolerable. If they revolt of course (as Nicoragua did) they will be crushed. Market systems are hardly natural in many of these countries, and they require great force to sustain them.

I should mention that I'm kind of disappointed that you didn't respond to my "domino theory" argument, which I'm pretty proud of. When I asked that question to my History teacher last year he got red in the face.

Where were these things in Hong Kong, the U.S.A, Singapore, Western Europe, Canada, etc during their industrialization.

Hong Kong and Singapore were special cases, but it's certainly true that Singapore is a highly repressive state. The US provides a decent example though- our labor history is so brutal that is was drawing harsh criticism in the right wing british press, and their labor problems were nothing to shake a stick at. Labor Unions were very consciously and violently crushed for a long period in our history. You might also consider the absolutely brutal institution of Slavery, which was state sanctioned, and I'd certainly say that that was an abominable correlary to our market industrialization. Murderous Western Expansion, which provided new resources and enabled us to avoid some scarcity problems was also a feature of US growth which we simply cannot overlook.

Do you really think that the U.S is as wealthy as it is today due to its benevolent state?

First, there's no such thing a benevolent state. Second, Is it so wealthy due to state intervention in the economy? Almost without a doubt. Our steel industry grew under heavily protectionist laws which prevented it from being crushed by British Steel (Britain was all about the free trade at that point, because it knew it would win.) To compare- look at the India, which was an amazingly developed country with incredibly efficient industries before the time of British colonization. Their Textile industry was simply forbidden from protecting itself by the British government (by force of course) and their industries were destroyed and the country was driven into dire poverty. At approximately the same time, New England was erecting massive tariffs to protect its textile industry and it flourished. It's as clear as day. The only people who don't recognize the obvious facts are a few economists.

The kind of regulations modern Americans live under would have crushed its fledgling economy in its early days.

this is arguable I suppose... what regulations do you have in mind?

And please don’t trump that silly argument that imperialsim on the Americans, or any other states part is what makes them wealthy. Thats a crock.

That's not a crock at all, though in America's case it wasn't the only thing (but it was major.) You wouldn't call it "colonization" so much as "theft" in the case of the US though.

People often point to third world shit hole Exhibit A, whose markets and law are so besotten by corruption, wealth transfer, state intervention, theft, etc; claim its an example of “free markets in the third world", show its obvious failures, and then state how free markets don’t work. Thats a big straw man to build.

It's hardly a straw man when I'm asking you to pick an example. I try to throw out as many diverse examples as I can so as to make my case broad.

More importantly though, I urge you to consider seriously the arguments marxists gave about countries not being sufficiently "socialized" as an excuse why communism kept failing. Consider them because you keep espousing the capitalist version. The IMF and World Bank (to say nothing of just the US gov't) have been imposing textbook perfect capitalist models on countries for at least 30 years and it never works. Everytime, though, someone's got some great reason why capitalism isn't to blame, and that it was some kind of obvious limitation that the country had (see below for instace, when you talk about Bolivia.) No capitalist seems to see these limitations beforehand though, while even Lenin (and Marx for that matter) had the good sense to speculate that communism would never work in Russia before it was imposed.

Secondly Russia was not remade under capitalist principles! The vast bureacracies remained for the most part, state controls did not entirely disappear, corruption within the legal system and property rights law was and still is rife.

a. Bureacracies are as capitalistic as you get.
b. corruption is not exogenous to capitalism.
c. the Russian miracle was headed by boy-wonder Jeffery Sachs, who was given immense power over the reforms which were to take place.

I think this is straw grasping.

Russia turned from a communist state to something like a mercantilist state.

That's a reasonable comparison, but again noone seemed to see this before hand. If these limitations were so obvious then why was everyone predicting such magic? Clearly, the Russians were better off under communism if this was the only alternative, and that's not a conclusion that I gather you'd accept. The polls in Russia of course, bear this idea out and the massive failure of capitalism has brought on romanticism for the "good old days" of Stalin (who is apparently remembered fondly by the majority of the populatiom at this point- and if anything should shame free market capitalism, that should.)

This is also the same with much of latin America (Bolivia for example). Without the fundamental structures that allow easy trade for poor or rich alike and the ability to keep what they make, standards will not improve all that fast.

Or at all, in Bolivia's case. In fact, Bolivia is losing vital infrastructure! Like the railway from La Paz to Cochamba (the second largest city) which has been allowed to sink it to irrecoverable disrepair because it's currently unprofitable. If you know anything about Bolivia's terrain (and I wouldn't be surprised if you do- you seem like a bright guy) you'd know that such a Railway will never be built again. That's the simply working out of free market principles by the way, which Bolivia reluctantly went along with just because they were told that markets would produce miracles for them if they just closed their eyes and ignored their common sense. Of course, in retrospect, we can see all the reasons why capitalism didn't work there and (big surprise!) every reason is simply fundamental to Bolivia as a country and unrelated to any flaws in freemarket doctrine. Truly astounding.

My apologies for cherry picking on your arguments, but my hands are tired.

cherry picking'll do that.

Matt

I wasn't name calling,

I wasn't name calling, merely speculating on the possiblity that he may be an idiot. There is a significant difference. In any case, my apologies Matt

"In my opinion, I see no

"In my opinion, I see no practical reason to prefer “free market” arguments- only theoritical ones. To me, the history of economic growth has had so little to do with the workings out of any of the principles we espouse on this site that we should only discuss them with heavy qualifications."

But it does have much to do with the principles behind this site and many others like it. I certainly agree with you that much of what passes for free markets in the western world today is quite harsh and "inequitable" but much of these same traits are not the result of the free market side alone, but of its hellmade wedding to the state and its nature. Underneath such abberations one can in fact see the beneficial workings of the market as espoused by libertarians and even market anarchists.

"In a market, there’s no consideration of “people need shoes” but rather “can people pay for shoes?"

Yes, so what? Whats wrong with price? The one who asks this question needs an incentive to act, and even more so he needs a recompense for his financial and time efforts at making shoes. He'll get these by making those shoes good enough for people to want to buy them. This is basic stuff here and I can't at all see whats so wrong with such a relationship.

"I think they ran a state capitalist economy, mildly similar to what the western democracies used to industrialize."

No, the entirely forced system that existed in the soviet state, which was fully directed from above by central planners in the absence of a market, is not the same as the market directed industrialization that existed under the west during the IR. Read some good history books. The differences are quite glaring between the two.

"We can talk about “inefficiency” all we want, but but I think people would rather benefit from goods inefficiently produced than have a neoliberal “efficient” economy in which they recieve no benefit and their children starve (or perhaps worse, are killed by death squads.)"

We can indeed talk about inefficiency all we want, or we could look at all the indisputable examples of rising standards of living in every place where markets are introduced. Again, I implore you to start with a good book on the function of free markets throughout history to see that they do not lead to death squads and mass starvation! Where were these things in Hong Kong, the U.S.A, Singapore, Western Europe, Canada, etc during their industrialization. Do you really think that the U.S is as wealthy as it is today due to its benevolent state? The kind of regulations modern Americans live under would have crushed its fledgling economy in its early days. And please don't trump that silly argument that imperialsim on the Americans, or any other states part is what makes them wealthy. Thats a crock. What exists in much of the third worlds is not at all the free market capitalism bound by a firm rule of law and equal to all citizens protection of private property. People often point to third world shit hole Exhibit A, whose markets and law are so besotten by corruption, wealth transfer, state intervention, theft, etc; claim its an example of "free markets in the third world", show its obvious failures, and then state how free markets don't work. Thats a big straw man to build.

"I mean, Russia was practically a controlled expiriment in 1990 (as close as it gets in the real world) in which western economists were simply able to remake a country using capitalist principles and starting with a fairly decent infrastructure and level of industrialization (as opposed to the expiriment in Bolivia, for example.)"

Firstly, we are talking about a country which was unfamiliar with open markets for at least 70 years, suddenly bieng thrust free of its controls. Secondly Russia was not remade under capitalist principles! The vast bureacracies remained for the most part, state controls did not entirely disappear, corruption within the legal system and property rights law was and still is rife. There was not a clearly recognized frame work for the above things, there still largely isnt. Russia turned from a communist state to something like a mercantilist state. This is also the same with much of latin America (Bolivia for example). Without the fundamental structures that allow easy trade for poor or rich alike and the ability to keep what they make, standards will not improve all that fast. For an excellent explanation of this in Latin America (which is well related to Russia as well), I recommend that you read "Liberty for Latin America" By Alvaro Vargas Llosa.

My apologies for cherry picking on your arguments, but my hands are tired.

Do you know the Nietzsche

Do you know the Nietzsche argument about how confident, intelligent people (basically ancient greeks, according to him) prefer a “worthy adversary” with which to interface, whereas people not sure of themselves tend to demonize those that disagree with them? I’ve always found it pretty persuausive, and one of things I like about Catallarchy is that that are a few people seeking “worthy adversaries” with which to debate- most notably you, Micha, Brandon and a few others.

I do not know the specific argument, as my study of philosophy started quite recently, but I agree with the sentiment. One can only feign interest in intellectual circle jerks for so long. Name-calling has always struck me as a sign of lack of confidence in one's own viewpoints -- I know it is, because when I lack confidence, it is to name-calling I tend to resort.

Stephan while you did

Stephan

while you did "speculate that I might be an idiot", which isn't technically name-calling (though try openly speculating about someone like that and see if they aren't insulted) you did call my post "ignorant vomiting" which seems a bit insulting to say the least.

In the case of the latter comment, whats your point matt? The USSR sustained itself in a terribly ineffient manner, standards of living and consumer choices were always at a level far below what almost any westerner from the “dirty capitalist” countries could procure. Would you have wanted to live there?

no way, for plenty of reasons which are quite unrelated to production and growth. If I lived in a western supported "free market" country living life under an IMF gov't (implicitely) and suffering indescribably brutal torture at the hands of US-supported death squads(El Salvador comes to mind), without industrializing or even experiencing any economic benifits to speak of it might be a more difficult question. In fact this is exactly what the US was concerned about regarding the "communist threat." Did you ever ask "why" when you were told about the "domino theory"? Why in the hell would a country choose to emulate the USSR, as brutal and destructive as they were, and why was the choice considered so threatening and obvious that we had to constantly militarily intervene to prevent this "virus" from spreading? The reason they discuss (in documentary records and public speeches which are easily available) quite openly is that the model of industrialization would provide a very inspiring "propoganda weapon" to other countries we wanted to keep under our control. So the US gov't considered the choice to be a serious one, probably for good reason. What would I have chosen in those scenarios? I don't know, maybe suicide.

Now I don't believe that those are the only choices available (though at the moment they are, and that's being generous by assuming that any country could have a communist revolution without the US destroying them.) Nevertheles, the point should be clear- the "dirty capitalist" countries are not much better with regard to the third world. We can talk about "inefficiency" all we want, but but I think people would rather benefit from goods inefficiently produced than have a neoliberal "efficient" economy in which they recieve no benefit and their children starve (or perhaps worse, are killed by death squads.)

Would you trade your life in the west to live in the U.S.S.R during its last three decades?

no way, but especially not during the capitalist decade, in which deaths reverted to their brutal Stailn levels, up from the more mild Gorbachev years. There's no question I'm better off in this US, but I'm talking about hope for the future in third world countries.

Furthermore, what sustained the Soviets was not their centrally planned communism but their imitations of the market. Prices existed, and wages were paid, and the central planners tried to follow what commodities should cost how much of what products to manufacture by paying attention to their prices and quantities in the U.S.A and other countries.

they may well be true, as I alluded to in my last post. I think they ran a state capitalist economy, mildly similar to what the western democracies used to industrialize. It involved following the "infant industry" lessons that literally all Industrailized Countries used (with the exception of the 3 "city-states", which are highly special cases) to develop and which we (with our military and using the neoliberal institutions) deny to any country which seeks to develop.

True communism would have been an immidiate and unworkable catastrophe.

I fully agree.

I have heard it estimated that this, more then anything else kept that country hobbling along for its 70 years.

It may have been hobbling compared to the US, but the true comparison would have been another repressive 3rd world country circa 1916, and that comparison (again, in purely economic terms)bodes quite well for the USSR.

Soviet production was effective only in the broadest of senses. They knew that people needed shoes, so they produced shoes. but factors such as; how many, where, what sizes were all incalculable and unknown. This was the case across virtually economic sectors.

agreed, there are some serious drawbacks to state planned economies. Of course, there are some serious drawbacks to market economies as well, one of which can be nicely discussed using your shoe example. In a market, there's no consideration of "people need shoes" but rather "can people pay for shoes?" I'd prefer a market economy primarily for reasons of freedom, which are quite apart from economic reasons. In a larger sense of course, I prefer a "bottom up" economic structure which is truly the "3rd way" between both of the aformentioned, heavily bureacratized, courses.

Scott-

Crack-smokin’ or not, he’s quite intelligent and makes interesting arguments.

thanks and same to you, by the way. Do you know the Nietzsche argument about how confident, intelligent people (basically ancient greeks, according to him) prefer a "worthy adversary" with which to interface, whereas people not sure of themselves tend to demonize those that disagree with them? I've always found it pretty persuausive, and one of things I like about Catallarchy is that that are a few people seeking "worthy adversaries" with which to debate- most notably you, Micha, Brandon and a few others.

At the end of the day, I’m not sure how we can use current-day Russia (and much of Latin America and Africa, for that matter) as a quasi-"free market capitalist” example in the same light as the US, Canada, Europe, Australia, and Japan. I think that was the real gist of the ‘capmag’ link up the thread.

I couldn't agree more, and excepting for your use of "quasi" in the above sentence, I'm not sure how well we can use the Western countries as examples either. In my opinion, I see no practical reason to prefer "free market" arguments- only theoritical ones. To me, the history of economic growth has had so little to do with the workings out of any of the principles we espouse on this site that we should only discuss them with heavy qualifications.

I agree that that was the focus of the article as well, but once again it reminds me of a vulgar marxist arguing that Cambodia couldn’t succesfully convert to communism because the people weren’t properly “socialized.” The real gist of the article is to rationalize market failures so that we can "keep the faith" in the same way that Marxists were constantly rationalizing the failures of what was called "communism." I mean, Russia was practically a controlled expiriment in 1990 (as close as it gets in the real world) in which western economists were simply able to remake a country using capitalist principles and starting with a fairly decent infrastructure and level of industrialization (as opposed to the expiriment in Bolivia, for example.) It failed miserably, and as such, you'd expect alot of people to come out of the woodwork to explain the failure in ways that are friendly to our beloved ideology.

Matt

matt27, At the end of the

matt27,

At the end of the day, I'm not sure how we can use current-day Russia (and much of Latin America and Africa, for that matter) as a quasi-"free market capitalist" example in the same light as the US, Canada, Europe, Australia, and Japan. I think that was the real gist of the 'capmag' link up the thread.

Crack-smokin' or not, he's

Crack-smokin' or not, he's quite intelligent and makes interesting arguments.

Re: "an increase in GNP,

Re: "an increase in GNP, especially with regard to Steel and Wheat production. Massive growth, at that.",

"No country could sustain itself producing things like this and the fact is that the USSR sustained itself for 60 years, and it did so by producing serious things that people wanted."

In the case of the latter comment, whats your point matt? The USSR sustained itself in a terribly ineffient manner, standards of living and consumer choices were always at a level far below what almost any westerner from the "dirty capitalist" countries could procure. Would you have wanted to live there? Would you trade your life in the west to live in the U.S.S.R during its last three decades? Furthermore, what sustained the Soviets was not their centrally planned communism but their imitations of the market. Prices existed, and wages were paid, and the central planners tried to follow what commodities should cost how much of what products to manufacture by paying attention to their prices and quantities in the U.S.A and other countries. True communism would have been an immidiate and unworkable catastrophe. Most importantly of all, the USSR had a massive and thriving black market structure. I have heard it estimated that this, more then anything else kept that country hobbling along for its 70 years. As soviet economist Lev Timofeyev stated: "No centralized distribution system can take the place of buying and selling. The entire Soviet economy, from top to bottom, is permeated by black-market relationships, which are in fact the living blood circulating in this dead organism." ( http://www.fff.org/freedom/0493e.asp )
Soviet production was effective only in the broadest of senses. They knew that people needed shoes, so they produced shoes. but factors such as; how many, where, what sizes were all incalculable and unknown. This was the case across virtually economic sectors. Make several billion tons of steel, and of course someone will need some of it, but to know exactly what quantities and specific alloys were needed would require an open market and its associated price mechanism. A centrally planned regime lacks both, and produces far more wastefully then any capitalist country. One more thing; the industrialization of the U.S.S.R in the twenty years after 1918 came at the same time as the largest peacetime drop in standards of living ever to have occured. You can thank collectivization and central planning for that.

As long as we're

As long as we're speculating, my theory is that he's been smoking a bad batch of crack.

Austrian economists in

Austrian economists in particular have serious criticisms of GNP as a real measure of anything, for precisely the reasons you bring up. It makes no sense to count the salary of a person who is paid to dig a ditch and then to fill it again as part of a country’s “production".

you're right that Austrians have made this valid criticism, though I actually don't know if I feel that your example is such a good one. My biggest problem is th externality issue which is absolutely pervasive and usually (even bu the critics) made to look smaller than it is. As far digging a ditch and filling it up goes, this may not be such a bad idea in practice, at least for the time being. Keynes has a good theoretical take on why that could be good (stimulating aggregate demand) but you can see it in practice all the time in the US, which uses what's called military keynsiansim, and has used for the last 50 years at least. Military funding is exactly the sort of negative-sum-game you're discussing, yet for some reason it does tend to make an economy productive. Of course, the military version allows the money to go to the very wealthy rather than the ditch-diggers of the world which is a big problem.

Neither output was of any use to anyone, but it seems it would fit your definition of “economically successful", right? I doubt any of the libertarians on this blog would agree with that as a definition. In addition, you might consider a 1-ton square block of glass as a meaningful part of the USSR’s “capital” accumulation and “GDP", but I wouldn’t.

well, I'm sure there were some goofy inefficiencies like this, but I'm mostly talking about the serious exports like steel and glass. No country could sustain itself producing things like this and the fact is that the USSR sustained itself for 60 years, and it did so by producing serious things that people wanted.

Other real-world examples of items it seems you would count (but I wouldn’t) in measures of Soviet GDP and “growth": Guards at the Gulags… Train conductors transporting people to the Gulags…

of course, just as in the US you count military expenditures and the operations of illegal prisons in Gunatanamo bay, etc. Nothing as bad the Gulags of course, but analogous in the sense we're discussing.

Matt27, Austrian economists

Matt27,

Austrian economists in particular have serious criticisms of GNP as a real measure of anything, for precisely the reasons you bring up. It makes no sense to count the salary of a person who is paid to dig a ditch and then to fill it again as part of a country's "production".

Similarly, for a real-world example, when glass-making plants in the USSR were paid by the ton, their output consisted of huge blocks of glass. To solve the problem, the incentive was changed to be by area, which resulted in paper-thin sheets. Neither output was of any use to anyone, but it seems it would fit your definition of "economically successful", right? I doubt any of the libertarians on this blog would agree with that as a definition. In addition, you might consider a 1-ton square block of glass as a meaningful part of the USSR's "capital" accumulation and "GDP", but I wouldn't.

Other real-world examples of items it seems you would count (but I wouldn't) in measures of Soviet GDP and "growth": Guards at the Gulags... Train conductors transporting people to the Gulags...

ps- this is what I love

ps- this is what I love about catallarchy; an article about gas caps can turn into a spirited debate about Stalin's 5 year plans in the blink of an eye. I realize there've been no accusations of male-whoring as of yet on this thread (though I wouldn't be surprised if Stephan threw that one at me, what with the good time we had last night) but I'm hopeful that with a little patience, we could match the Springer-esque thrills of that thread.

Matt

First, I do not know what

First, I do not know what calculus one might use to show that killing millions of people is economic. The laws of economics are clear, and empirically verified, that more people equals more growth and more opportunity. I need not say anything about the morality of it, it is simply impossible for a society to be better off economically by killing a significant portion of it’s population.

I think you're wrong that the "laws of economics" back you up this. Measures like GNP don't take into account externalities (like environmental devastation or human suffering) and they don't even distinguish between "positive" economic activity and negative. For instance, a man recovering from triple bypass surgery and undergoing a costly divorce does absolute wonders for GNP. Broken Window fallacy anyone? Do I think Russia was "better off"? Of course not. I think that Stalin's 5 year plans rapidly industrialized the nation though, and that was my only point. I think you're again making the mistake of using "econonic" as a synonym for "good" which is not accurate.

It's also worth mentioning (because one of you serious capitalists could take this argument and run with it) that as the USSr was being set up, the primary architect (Lenin) did not think that Russia was or could be communist and seemed to suggest that it would actually follow a "state capitalist" development model, which is probably a more proper label for the centralized, bureacratic export business the Soviets were running.

In the years leading up to the Bolshevik Revolution, Russia was industrializing quite rapidly, more rapidly than later years.

I've never heard anything close to this. The Russian Industrialization and the increase in Wheat and Steel production under Stalin and Kruschev was unprecedented in the world at that point, to say nothing of Russian History.

Other nations that have since industrialized under semi-free markets have industrialized far more rapidly than the USSR ever did.

like?

In addition, the Soviet system consumed more capital than it built. If you can show me data that suggests otherwise I’d love to see it.

I have no idea what this statement means. Economic growth (which noone questions occured in Russia) implies that "the pie is getting bigger" correct? And that more "capital" is being created than destroyed, right?

Well for one thing, every other industrialization has exports to the rest of the world, for another Soviet safety records are worse per capita than even the height of “Robber Baron” U.S., and lastly every other industrialization actually occurred someplace other than the pages of Pravda.

serious estimates allow that the figures were estimated by no more than 1/3, still a remarkable achievment, seen only in raw economic terms.

If by “rosy” you mean better than subsistence farming, then I plead guilty. But don’t think for a moment that I want to go back to living in a “manufacturing” economy. Nor do I have any intention of going back to operating a punch press.

nor do I, though it's worth mentioning that the IMF forced transition from subsistance farming to capitlism is not always beneficial to the population. Honduras in the 1980s is a great example- GNP went up as people got kicked off the land, but Infant Mortality went up as well as people migrated twoard the urban centers to live in squalor.

Out where in the real world? The only world I know saw decreases in mortality rates and increases in overall health, increases in leisure time, and greater wealth to enjoy that leisure time - all coinciding with industrialization in all of the semi-free market nations.

I'm not sure what "world" you mean- though the US has an infant mortality rate thar ranks right along side 3rd world cuba. I doubt anyone's seriusly arguing that industrialization isn't a good thing, but the original point being argued was that "soviet industrialization was economically succesful." That's simply a fact, and I don't see anyone denying the horrible crimes of Stalin here- I don't think Mandos or I would say that the crimes were justified by economic growth. My major point was simply that Russia in 90s had Stalin-level deaths from capitalism while sinking back into the third world, much less rapidly advancing.

If you have some methodology for showing that the correlation between health, leisure time and wealth with industrialization in the semi-free market nations is just a fluke, please show me.

Health standards dropped in the period of early industrialization, and then picked up pretty rapidly. Wages are stagnant and leisure time is miserly in the US (compared to other industrialized countries), so again we're dealing with a situation much more complicated than "capitalism=good."

another ignorant vomiting from matt27…
looking forward to seeing an enlightened vomiting.

One wonders if the 27 stands for his IQ.

the mystery has been solved- very astute Stephan.

Growth of what matt?
an increase in GNP, especially with regard to Steel and Wheat production. Massive growth, at that.

Productive growth that serviced a unmet need within the society?
I suppose by definition yes- if they were xporting 80% f the Steel the US was by 1958 (which greatly troubled the US, of course) and someone was buying, I suppose your pareto logic would convince you that it met someone's needs.

Productive as in it created more then it consumed. Or was it the kind of raw growth that exists when things are made without function, usefulness, or utility and severely lacking in quality as well.

I was expecting a more riveting conclusion after that intro about vomiting. I wish you could provide an example of the utilitiless, non-useful, unfunctional products of low quality that you think Russia survived on for 20 years... perhaps you think they made knock-off collectible Gone With the Wind plates?

Matt

"That Stalin’s 5 year

"That Stalin’s 5 year plans drastically increased growth is simply a fact."

another ignorant vomiting from matt27... One wonders if the 27 stands for his IQ. Growth of what matt? Productive growth that serviced a unmet need within the society? Productive as in it created more then it consumed. Or was it the kind of raw growth that exists when things are made without function, usefulness, or utility and severely lacking in quality as well.

Stephan, there's no need to

Stephan, there's no need to resort to name-calling.

Mandos, According to this

Mandos,

According to this article the first "switchover" isn't going to be from light sweet crude directly to "electric" (one wonders what it is that's going to generate the electricity).

Some 40 or so years from now, the article claims, the switchover is more than likely going to be from light sweet to sour crude (of which there is now "more than anyone can use"), then to bitumen, then to shale. That hardly strikes me as a scenario where we as an industrial and agricultural society are hurtling, accelerator pressed firmly to the floorboards, toward a rapidly approaching sheer cliff.

Meanwhile, technology will continue to march forward, and necessity will drive improvements in the refining and collection processes for each of those grades of petroleum reserves.

40 years is an awful long time, given the current pace of technological progress. In that time someone might come up with some as-yet-unimaginable method of efficiently extracting energy from cow pies. Who knows?

I dunno, to me it seems like the future is very bright.

"What I asked before, and

"What I asked before, and what you have not done is show us why central planning from the government is a better solution than a hands off approach to the very real problems presented by peak oil."

I gave you ample ample arguments as to why. One of my arguments spawned a very large and ongoing discussion as to the efficacy and history of central planning, markets, slavery, and so on. In summary:

1. Lead time required for the retrofit.
2. Uncertainty in the depletion curve.

It's not that government (ie, collective non-market decision-making bodies) can do a *great* job of it. It may, it may not, this is another discussion. It's whether the market can do so in time, without a large number of people being, um, adjusted. Out of life, as it were.

Contrary to your criticism, I do not relish Peak Oil. In fact, I am terrified of it. I like technology. I like technological progress. I have no desire to live in the woods. I have no desire to live under Stalin. Many aspects of social progress that *I* like have been helped by technology (even as some things have been impeded). There *are* people who relish Peak Oil. But people at, say, The Oil Drum do not at all---but they have cogent arguments as to why we are at risk.

Ugh. I told myself I

Ugh. I told myself I wouldn't do this, but here I go. I'm gonna try to keep this brief.

If the industry was sustainable and profitable and competed as a major sector in the US (or world) economy it’s probably fair to say it’s economically succeful.

Again I ask: Why was manumission made illegal? The reason is because otherwise slaves would have started purchasing their freedom in droves. Why is that? Because a person is most valuable to himself, so he will be able to outbid everyone else in his purchase. (Oh, boy, I can hear the lid being pulled off that can of worms...) Think about it.

I think the only reason you might have a problem with this is that you’re convinced that there’s some magic law that makes evertything that’s economically efficient also morally right.

Actually, as an egoist in the tradition of Max Stirner I find moral arguments for libertarianism almost entirely unpersuasive. What I do find persuasive, however, is the notion that voluntary transactions increase the wealth of both parties - and by "wealth", I mean the well-being of each person as subjectively considered by him/herself. Hence, social systems that maximize voluntarism and minimize coercion tend to be and grow wealthier - and "wealthier" meant in the only way that really "means" anything: from the subjective standpoint of the individual members of that society. (ugh. Another can of worms?)

The conditions for markets can be imposed with the aim of producing market structures, which is what I was talking about.

Now you're talking like a Hegelian. I can't make heads or tails of that sentence.

But,sure, can markets- plain ol’ markets- be imposed by force? Sure they can- look at the central american free trade agreement whcih created a “free” market within the americas (excepting south)- that was imposed under the implied use of force (just like taxation is, fellas) so literal market sturctures can be imposed.

Even *you* have to put the word "free" in quotes! Obviously such a scenario would not be something that I would advocate, nor would I call it a "market" (just like taxation, btw).

Can you give a specific example of a "market structure" that has to be "imposed"? I apologize for continuing to fail to understand you.

“keeping slaves illiterate” desn’t require much moeny, as all one has to do is just not teach them.

Tell that one to Fredrick Douglass. Also, ask yourself why it was *illegal* to teach a slave to read.

[the idea that keeping slaves illiterate made them less productive is] debatable, once you consider the type of work they were doing.

Which is precisely my point. Such a situation prevented people who might otherwise have been brilliant doctors, businessmen, teachers, etc., from reaching that potential. Weren't you the one who mentioned the broken window fallacy??? I thought you understood the concept of opportunity costs.

There’s also some theory behind it- do you treat cars better when you own them or when you rent them?

So the slaves were happy being slaves, because they lived better than they otherwise would???

No, it would not. Again, I’d caution you against joining your economic arguments with your ethical ones. For one thing, the slaves were more productive which is good enough to shut that theory down. For another thing, why would profit-oriented business men prefer to hire unprofitable workers?

Ethics has nothing to do with it. What you seem to be arguing here is that a slave society can outcompete a free one. Why, then, was the North becoming wealthier than the South? Why, then, is Cuba not an economic powerhouse and a beacon to all the world, proclaiming the superiority of lack of freedom?

In reading your post, it does indeed seem like you are advancing that position - or one close to that - at least with respect to the Soviet Union. I suppose that's why today we all have USSR-brand cars, TVs, shoes, airplanes, calculators, CD-players, etc., huh?

[Marx's famous dictum is] a reasonable ethical theory that most US citizens think is so obvious and intuitive that over half think it’s in the constitution.

We might as well stop now if you think such an ethical theory is reasonable and doesn't lead *directly* to the wholesale slaughter and impoverishment of the population unfortunate enough to be victimized by it.

I shouldn't have to point out the obvious - that Marx wasn't saying "Golly gee, it sure would be nice if people of ability helped those in need."

People should use their unearned talents to help those less fortunate, sure. That’s not slavery; that’s common decency.

Now who's mixing ethics with their "economics"?

The bus has reached my stop, so I'll be getting off, now.

As opposed to political

As opposed to political structures, will obviously focus on terms longer than their election cycles, right?

You know I'm not a fan of political structures either. The only benefit to them in this case is that they're somewhat accountable to the public (rather than an inaccesible mini-USSR of a corporation.)

But the next generation does have a voice in the political arena? How many fetuses do you know that vote?

no, but that context allows for more concern for the future because at least the particpants aren't bound by law to focus on narrow profit goals. In the right context people will be very concerned about their childrens' future and act accordingly. The market is not such a context.

Ah, turtles. Is there anything they can’t do?

are you claiming that this is a turtles all the way down argument? You guys just love your buzz-words... Catallarchy tired or wired:

Now- Turtles
5 minutes ago- Broken Windows
last year- Reductio Creep

Matt

I don’t think market

I don’t think market structures are able to be sufficiently long-sighted as they tend to focus on short-term bottom-line issues.

As opposed to political structures, will obviously focus on terms longer than their election cycles, right?

Also, assuming that this issue is likely to affect the next generation (which doesn’t have a voice in the market at all) no one will respond to their demands, even under the most generous freemarket theory.

But the next generation does have a voice in the political arena? How many fetuses do you know that vote?

Ah, turtles. Is there anything they can't do?

I think the name comes from

I think the name comes from The Silmarillon.

Indeed it is.

Indeed it is.

Mandos (Hands of Fate?) It's

Mandos (Hands of Fate?)

It's Manos, not Mandos.

nmg What I asked before,

nmg
What I asked before, and what you have not done is show us why central planning from the government is a better solution than a hands off approach to the very real problems presented by peak oil.

Given that this (not always central planning in the strcitist sense, but always state-led) has been the historical case, the onus is on you to demonstrate why you think another, untested, system should be put in place now.

I'm glad you consider "peak oil" a "very real" problem, but even in theory there are plenty of good reasons not to support market approach (if that can even be considered an approach.) For one thing, markets have been remarkably unimpressive at creating highly profitable new technology (most of which has the US gov thumbprint on it.) For another thing markets are notoriously short-sighted (responding primarily to quarterly profit pressures)and these are long-term problems. Finally, marketsalso respond (at east ideally) to the interests of people with money in the market, and since many of these problems affect our children (people without money not in the market) their interests are unlikely to be seriuosly consdered.

Abe-
Matt27, I think you’re going to have to do me a favor and define exactly what you mean by “economically successful", here. Otherwise I’m afraid we’ll just be arguing past each other.

not at all- I think we both know what it means. If the industry was sustainable and profitable and competed as a major sector in the US (or world) economy it's probably fair to say it's economically succeful. If a country experienced thet fastest growth the world had ever seen, it's probably fair to say that their economic policies are succesful. In short: I define it the same way the business press does, when they talk about Honduras being "an economic miracle" or Chile, or Thailans in the 90s or whatever. If you think the way in which I've been using the term is unreasonable, then I'd ask you to spell it out. Slavery was remarkably profitable (if it wasn't I suppose we might ask why business men still preferred it)- in what sense what is economically unsuccesful? I think the only reason you might have a problem with this is that you're convinced that there's some magic law that makes evertything that's economically efficient also morally right. That's a ludicrous belief, but it's quite common to libertarians because they're so used to arguing that the free market maximizes both (the way the marxists used to argue that communism would magically maximize both.)

It would also seem that you have a different idea than Brandon and I do about what exactly constitutes a “market". I can’t imagine how one can be “forced” on a person, since a market, by definition (apparently only mine and Brandon’s?) is a voluntary association and interaction.

private property and privatized industry are neccesary (in most formulations I've heard) for a market to truly function. The conditions for markets can be imposed with the aim of producing market structures, which is what I was talking about. But,sure, can markets- plain ol' markets- be imposed by force? Sure they can- look at the central american free trade agreement whcih created a "free" market within the americas (excepting south)- that was imposed under the implied use of force (just like taxation is, fellas) so literal market sturctures can be imposed.

Slavery of the sort practiced in the antebellum South required keeping the slaves illiterate (to make escape more difficult),

"keeping slaves illiterate" desn't require much moeny, as all one has to do is just not teach them.

which prevented them from being as productive as they would have otherwise been as free persons (why do you suppose, for example, manumission was made illegal?)…

that's debatable, once you consider the type of work they were doing. Nevertheless slaves were incredibly productive (moreso than free laborers as argued persuasively in "time on the cross"), so there's no need for abstract arguments like the type you're making- there's empirical evidence to the contrary. There's also some theory behind it- do you treat cars better when you own them or when you rent them?

That's not an argument for slavery, but rather an argument against wage slavery. It's quite persuasive though.

It necessitated security measures, which diverted resources from otherwise fruitful enterprise… Are these not significant costs?
These things are all required from wage labor as well. It may have been more expensive (because at least slavery ensured that the people would live, whereas wage slavery does not) but the workers were more productive.

Would not the South have been more prosperous in the absence of slavery?

No, it would not. Again, I'd caution you against joining your economic arguments with your ethical ones. For one thing, the slaves were more productive which is good enough to shut that theory down. For another thing, why would profit-oriented business men prefer to hire unprofitable workers?

With regards to “slavery” in the Soviet Union: what do you think the forced labor camps amounted to?

you can argue that this slavery, sure, though because they were prisoners it's different in a sense.

What do you think “From each according to his ability, to each according to his need” amounts to?

a reasonable ethical theory that most US citizens think is so obvious and intuitive that over half think it's in the constitution. People should use their unearned talents to help those less fortunate, sure. That's not slavery; that's common decency.

Would not the Soviet Union have been more prosperous in the absence of the gulags and the killing of some 40-60 millions?

Sure, anything might be true. If you have arguments you would do well to advance them. It's probably worth mentioning (before you dig yourself a hole) that you'd be arguing for non-violent communism in this case, as the Svoiet Union far surpassed the "free market" expiriments of the time which would hardly lead one to conclude that they should have abaonded their system.

Brandon-
To the extent that that was true, it was immense brutality, not markets, that were forced on those populations.

First of all, "to the extent that it was true"? The history of US aggression is vastly underestimated in scope and brutality in the minds of most americans- I'd like to know what you're implying by this. Secondly, the "brutality" was brought forth in the service of markets (at least rhetorically), and I think you're arguing against it by using an obviously false dichotomy. Can immense brutality be used to bring about certain economic and social changes? Of course, so why then would we assume (as you argue we should) that it has to be one or the other?

Matt

Mandos, Faith-based!

Mandos,

Faith-based! There’s a risk you won’t find it in time! There’s a risk you won’t understand that Mount Vesuvius is about to kill you until it’s too late! How much are you willing to risk that Julian Simon will always be right? And who has to pay the price if he’s even partially wrong? I suspect you believe you won’t.

What is the alternative? Put our faith in the state, instead? That organization that can't deliver the mail on time? That lied us into war? That brought us the DMV?

I'll take my chances on the market. At least there the incentives are in the right place. Greed, as Pierre Lemieux said in the Mises.org article, is useful. If there's profits to be made, you can bet that people are working hard figuring out how to make them. "Bravo!", I say.

You’d be right if we could reliably say that the price of gas would rise steadily over time, preferable in step with the project population peak occuring at some point this century. But can you reliably say that?

This seems to be making the assumption that all the experts who literally bank on knowing these things have *no idea* how much oil is left. Is that what you're saying---that no one has *any* idea how much light sweet crude remains to be had, so accurately forecasting future prices is impossible? If that's true, then what crystal ball are the Peak Oilers using for their prediction? If that's not true, then why is it impossible to roughly predict future prices?

Looks like my work here is

Looks like my work here is done.

I don't get what your

I don't get what your comment means. I'm clearly intending something opposite to what you are espousing. Markets in things that property-holders are interested in are clearly threatened in South America by popular enfranchisement of non-property-holding classes.

Slavery was not expensive

Slavery was not expensive (at least not in the US, which is the only country I’ve seriously looked at) primarily because it was very economically succesulf. (sic)

Matt27, I think you're going to have to do me a favor and define exactly what you mean by "economically successful", here. Otherwise I'm afraid we'll just be arguing past each other.

It would also seem that you have a different idea than Brandon and I do about what exactly constitutes a "market". I can't imagine how one can be "forced" on a person, since a market, by definition (apparently only mine and Brandon's?) is a *voluntary* association and interaction.

Slavery of the sort practiced in the antebellum South required keeping the slaves illiterate (to make escape more difficult), which prevented them from being as productive as they would have otherwise been as free persons (why do you suppose, for example, manumission was made illegal?)... It necessitated security measures, which diverted resources from otherwise fruitful enterprise... Are these not significant costs? Would not the South have been *more* prosperous in the absence of slavery?

With regards to "slavery" in the Soviet Union: what do you think the forced labor camps amounted to? What do you think "From each according to his ability, to each according to his need" amounts to? Would not the Soviet Union have been *more* prosperous in the absence of the gulags and the killing of some 40-60 millions?

It was brutality that was

It was brutality that was forced upon these populations to prevent them from, in effect, taxing the minority. It's why the US threatens South American leaders now and again, who are themselves often corrupt, but regularly threaten to tax or limit the minority.

The minority have certain markets that they wish to keep free of interference, and they have that interest in common with the US. And they don't wish the wealth to be redistributed! In order to keep them free, they have to make sure that the majority is enslaved.

The fact is, it took immense

The fact is, it took immense brutality against large populations in order to cheaply extract their labour.

To the extent that that was true, it was immense brutality, not markets, that were forced on those populations.

Attention Peak Oil

Attention Peak Oil enthusiasts:

1. Peak Oil will not save you from modernity. We're not going back to "community farming" or whatever nonsense some of your leading voices are advocating. See Richard Heinberg for perfect example. Peak Oil nuts are usually luddites in disguise who see Peak Oil in nearly a religious way, like some kind of rapture where humankind will pay for its crimes and SUV owners will die a painful death....

2. Peak Oil will not bring about a socialist utopia. Top-down interventionism will only exacerbate the problem. The only thing that will save us from Peak Oil's damaging effects is a robust economic growth in an environment that rewards innovation. Nothing else will save us from this dilemma. Get it through your thick heads that STALIN IS NOT A GOOD MODEL FOR HOW TO ADDRESS PRESSING ECONOMIC ISSUES. And make no mistake that peak oil is nothing more than an economic issue. It is *exactly* the kind of issue that is solved best via free market.

Perhaps some of the free-market dogma is misquided when free-marketers advocate extreme changes like eliminating the FDA and SEC and all environmental controls, at leastthere's room for debate there.

But solving our *market* dependence on oil is EXACTLY the kind of thing the market will do best. The logical leap to "we need a centrally planned apollo program" is only explained by a deep and abiding love for bureucrats.

" if Peak Oil is

" if Peak Oil is catastrophic, then money may not be worth anything, so why bet on that outcome?"

Right there you just proved you are crazy. You think we're going back to a barter economy?

You have repeatedly outlined the peak oil challenged and reiterated how dependent our economy is on oil. It is the free market (despite massive govt intervention) that created this structure we depend on. Why do you think the market is less-equipped to deal with the transition than government?

What I asked before, and what you have not done is show us why central planning from the government is a better solution than a hands off approach to the very real problems presented by peak oil.

Your logic is thus:

1. It's a big problem
therefore
2. only government can handle it.

"What is the alternative?

"What is the alternative? Put our faith in the state, instead? That organization that can’t deliver the mail on time? That lied us into war? That brought us the DMV?"

See, no organization is perfect, but this is the issue that spawned the other discussion on this thread. In many countries, the government *does* do things that people want them to do quite well. Not, as I said, perfectly. But it does. It especially, despite many warts and wrinkles, manages the public-works projects that have to be planned well in advance to appear in the time when they are needed. Even in places where the government was *terrible*, people often miss it after it's gone, for reasons that are to them, very good reasons. As matt has been arguing---as I said, that's the point of the other discussion here.

This problem, if the peak oilers are right, is akin a massive public works repair project, that needs to be started well in advance of the market signals that would herald the impending crisis. Unlike a number of other countries, Americans made a fateful decision 20 years ago that they'd prefer to accept your arguments and wait for the market to work itself out. This is, above all, a cultural choice: the demand that the car always be fed and worshipped, and to hell with burning Rembrandts. There was nothing stopping them from voting for advance readiness. After all, they vote for it all the time, what with the fetishization of the military in American culture. If they had chosen the other road, 20 years ago, we may now have seen an imperfect and partial solution--but we'd have been more ready, nonetheless.

"This seems to be making the assumption that all the experts who literally bank on knowing these things have no idea how much oil is left. Is that what you’re saying—that no one has any idea how much light sweet crude remains to be had, so accurately forecasting future prices is impossible? If that’s true, then what crystal ball are the Peak Oilers using for their prediction? If that’s not true, then why is it impossible to roughly predict future prices?"

Saudi Arabia is being used as a massive "plug number" that can soak up known failures elsewhere, which IIRC is the point of Matt Simmons arguments. We *know* that failures are measurable in certain countries where more transparency exists. We know that modern drilling and pumping techniques make failures precipitous---instead of a more felicitous smooth depletion curve. We know that Saudi Arabia is using these techniques to maximize the capacity of their larger fields.

It's possible that Saudi Arabia and other parts of the world have more fields. Most geologists think its unlikely since discoveries peaked in the 70s and have been declining ever since. In which case, it would be a bad bet for the market to settle on an immediate Peak Oil future. Oil companies and investors are very conservative on these matters and, with good reason, are much more likely to bet on the status quo. There are game-theoretic factors there as well: for instance, if Peak Oil is catastrophic, then money may not be worth anything, so why bet on that outcome?

But the risk is we may increase production, become more oil dependent, and then suddenly hit the wall, due to the extraction techniques alluded to above. It's a *peak* after all---we are really arguing over the risk and consequences of a precipitous post-peak drop. The market won't see this---because we can continue to increase production over a 5-year term or more. The average Peak Oil prediction seems to be somewhere like 2010 or 2012 or something.

Nevertheless, some of this debate may be academic. Because, as I mentioned, the market *is* moving long-term futures higher, and every time an analyst claims it can't stay that high, it goes higher! And even if it suddenly suffers from local minima, which it must due to declines in demand, that doesn't change the peak oil (ie, peak production argument): how much are you willing to bet on faith-based hypothetical technology---and a gradual failure curve?

hey not so fast Brandon- I'm

hey not so fast Brandon-
I'm posting a response this afternoon.

Who is this Abe Heward? I

Who is this Abe Heward? I like him.

And yes, Mandos is a

And yes, Mandos is a Silmarillion character, also mentioned in MST3K by the way. The judge among the Valar.

Again I ask: Why was

Again I ask: Why was manumission made illegal? The reason is because otherwise slaves would have started purchasing their freedom in droves. Why is that? Because a person is most valuable to himself, so he will be able to outbid everyone else in his purchase. (Oh, boy, I can hear the lid being pulled off that can of worms…) Think about it.

of course they would've- what are you crazy? Manumission was illegal because the state was sanctioning the brutal institution of slavery and they didn't want to lose a cash cow. You must be in an argument with someone else who thought that slaves loved slavery, because I don't think so at all. Again, the fact that it was economically succesful and more productive absolutely does not mean that the slaves liked, or that they liked it more than wage slavery. It means just what I said.

What I do find persuasive, however, is the notion that voluntary transactions increase the wealth of both parties - and by “wealth", I mean the well-being of each person as subjectively considered by him/herself.

What about the voluntary transaction in which a person gets mugged and "volunteers" either his life or his wallet? That's not game playing by the way that's a deep point analogous to the "free choice" made by a poor person who participates in the labor market.

Hence, social systems that maximize voluntarism and minimize coercion tend to be and grow wealthier - and “wealthier” meant in the only way that really “means” anything: from the subjective standpoint of the individual members of that society. (ugh. Another can of worms?)

"Voluntarism" is ill-defined. as far as minimizing coercion goes, I'm not sure what states you have in mind, but I'd bet that's true. What it has to do with what we're talking about I'll never know (what could be more coercive than absolute private property rights?)

Now you’re talking like a Hegelian. I can’t make heads or tails of that sentence.

Not at all (plus isn't Stirner into Hegel?) I was discussing the conditions in which most economists agree markets function- dregrulation, private property, a legal system in which property rights are heartily enforced, private industry, etc. Those would be the "conditions for markets". If you'll reread my sentence in which I discuss forced being used to introduce the "conditions for markets" on countries, it should make sense. Since they give rise to markets (and since the imposition of the conditions was done with that goal in mind) it's fair to say that markets are imposed by force. QED.

Even you have to put the word “free” in quotes!
and what's wrong with that? I disagree that such structures are free.

Obviously such a scenario would not be something that I would advocate, nor would I call it a “market” (just like taxation, btw).

Look, this avenue of the discussion began with a small aside in which I said "market" once instead of "washington consensus", and as such it's a tiny little speck of a point. If you don't believe that what the US is constantly trying to impose in other countries is a "market" than fine, do your own thing. Its clear what I meant when I was talking about it. Neverhteless, you've got quite a bullet to bite because if those aren't markets than what empirical examples of markets do you cite as evidence for your point of view?

Can you give a specific example of a “market structure” that has to be “imposed"? I apologize for continuing to fail to understand you.

sure, a privatised railroad in bolivia. It was public beforehand and yielded no profit (and was subject to no competition.) The IMF forced Bolivia to privatize everything including the railroad, much of which was shut down (isolating much of the country) and will never be built again.

Tell that one to Fredrick Douglass.

tell what to Freddrick Douglass? That its not hard to try and prevent slaves from reading? I'd bet that he'd agree what with the struggle he underwent in order to get there himself. I didn't say it was impossible.

Also, ask yourself why it was illegal to teach a slave to read.

why ask myself? It was illegal because southerners wanted to keep slaves as slaves, and they didn't want them organizaing a resistance and so forth. I keep getting the feeling that you keep mixing me up with a confederate that you must arguing with on another thread.

Such a situation prevented people who might otherwise have been brilliant doctors, businessmen, teachers, etc., from reaching that potential.

that's absolutely true. To construct an argument we need a reasonable standard of comparison though, instead of this flowery neverland you're imagining in your head in which freed slaves miraculously would have transformed the south into Ancient Greece. Where else was this going on that proves the south missed the boat? More below:

Weren’t you the one who mentioned the broken window fallacy??? I thought you understood the concept of opportunity costs.
I do- it's about reasonable opportunities sacrficed in order for other things to be done. What it doesn't say is that everything else in history that didn't conform to your own utopian ideas about what's possible is automatically be bad because technically they could've been participating in your utopia. You can't argue that the Enlightenment was bad because if those smart guys weren't busy writing so many books they might've invented a perpetual motion machine.

Now before you assume that I think that Slavery was the best thing since the enlightment, I will remind you that I despise slavery, and I originally brought it up to demonstrate that morally abominable things could be economically viable. It's called an analogy.

So the slaves were happy being slaves, because they lived better than they otherwise would???

please read the sentence you didn't quote. I said it was an argument against wage slavery. It doesn't mean that the slaves were happy, but that (obviously) their unhappiness had nothing at all to do with their marginal productivity and reimbursement within the economy!

What you seem to be arguing here is that a slave society can outcompete a free one. Why, then, was the North becoming wealthier than the South?

I don't know that this is true, but it's certainly clear that the south was economically viable for some time. It could well be that there were changes in international export markets which favored textiles over agribusiness. I also seem to remember a few tariffs that harmed the south a good bit.

The south certainly competed with the north, regardless of who won (if you're indeed correct that north was becoming wealthier.) My argument does not depend on Slavery being the greatest form economic organization. I would stress, however, that even if it were that'd be no reason to prefer it.

Why, then, is Cuba not an economic powerhouse and a beacon to all the world, proclaiming the superiority of lack of freedom?

what does cuba have to do with anything? I don't think Cuba's a model society, but even if I did that argument works quite well. What Cuba's been able to accomplish under one of the most crushing embragos ever levied on a country is quite astounding. Our infant mortality levels (a basic indicator of general health) are about even with Cuba's, for instance. Again though, there are plenty of non-economic reasons to dislike cuba.

In reading your post, it does indeed seem like you are advancing that position - or one close to that - at least with respect to the Soviet Union. I suppose that’s why today we all have USSR-brand cars, TVs, shoes, airplanes, calculators, CD-players, etc., huh?

Breaking out the sarcasm I see. The USSR and the USA are non-economically comparable for reasons of starting points (Czarist russia was mired in poverty) and general wealth of resources and infrastructure.

We might as well stop now if you think such an ethical theory is reasonable and doesn’t lead directly to the wholesale slaughter and impoverishment of the population unfortunate enough to be victimized by it.

You think it leads to that directly? I'm sure you'd like an excuse to stop this debate (as you seem to trying to squirm out about every other line here) but I'm curious to know how this is it. That statement is an ethical truism that has nothing to do with why populations were slaughtered (the reason for that is to be found in late marx's preference for a "vanguard party.")

I shouldn’t have to point out the obvious - that Marx wasn’t saying “Golly gee, it sure would be nice if people of ability helped those in need.”

right, he was saying that the extra benefits that accrue to undeserved natural talents should be used so that they benefit those in need.

matt: People should use their unearned talents to help those less fortunate, sure. That’s not slavery; that’s common decency.

Abe: Now who’s mixing ethics with their “economics"?

I have no idea what you're talking about. Helping people is not fundamentally an economic concept.

Matt

Matt27, I notice that mostly

Matt27, I notice that mostly you do a lot of doctrinal nitpicking.. You do little in the way of unraveling the supposed flaws in arguments that oppose you. Instead you mostly address each point with an answer that asserts without elaboration or clear explanation. Furthermore, your arguments are so full of logic gaps, fallacies of composition, and straw man arguments.

By the way The U.S.A started out much poorer then The USSR. It was a backwater colony of somehwere between 2 and 3 million people on a continent of hostile enemies. It had little in the way of known natural resources and a history of only 100 years of development. It had no rail system, no heavy industry, no major infrastracture, and to put the cherry on the cupcake, it had just finished a prolonged war with the worlds most powerful nation. Russia on the other hand had a poulation of over 100 million people, a massive agricultural industry (it was and had been a net exporter of grain for the past several centuries), rail systems, and many known deposits of natural resources. The contrasts could go on. Despite this, you still have hot air enough to say that Russia failed because it was poor at its start.
A primiti ve tribe of halfwits living on a dirt and swamp island could get rich if they had the basic system of a market in place, while the worlds richest country would descend into poverty if mired with basic socialism.

Well Steven, I'd have to say

Well Steven, I'd have to say that your rant at the beginning seems to miss the mark for me. If my errors were as simple as you say, you could probably point them out one by one with ease and not rely on an emotive tantrum. Kudos for at least arguing one point though, which I shall now respond to:

By the way The U.S.A started out much poorer then The USSR. It was a backwater colony of somehwere between 2 and 3 million people on a continent of hostile enemies.

Plenty of things on this. The most important is just that you misunderstand what we were talking about- Abe was trying to compare the USSR's global dominance with the USA's in the 19th century. To do so it'd be smart to start when the USSR began (because nobody's claiming that czarist Russia had a succesful economic arrangement) and compare what they started with in 1917 to what the USA had at the time.

Nevetheless the "hostile enemies" were highly ill-equipped for warfare, and the British slaughtered the indians by bringing over a new level of brutality, the likes of which had never been seen before on that continent. Diseases didn't hurt either. Once the US expanded to the coasts it was unbelievably well suited to follow it's own development course, as it had tremendous natural resources and one of the best systems of government the world had thus far seen. Not to mention having no porwerful enemies and existing on land that was naturally perfect to avoid attack. Because of the latter, on September 10th 2001 the country hadn't been attacked since the war of 1812 (whereas russia had been burnt to the ground.)

Russia on the other hand had a poulation of over 100 million people, a massive agricultural industry (it was and had been a net exporter of grain for the past several centuries), rail systems, and many known deposits of natural resources. The contrasts could go on. Despite this, you still have hot air enough to say that Russia failed because it was poor at its start.

this is a big topic, of course and urge to read the first sentence of my reply in which I argue that this is irrelevent to the points I was making. Howver, to simplify things- I don't know anyone who doubts that Brazil was richer than the USSR, and for a myriad of reasons, they're a much more apropriate standard of comparison than the US. Well the comparison clearly favors the USSR on economics terms. Brazil followed a more US mandated course which quite destructive to their economy. The leaps that the USSR took in the 20th century, rapidly gaining on the US in steel and wheat production, scared the hell out of the US and shocked the world. I have no idea why you'd prefer these weird abstract comparisons to the simple fact that USSR experienced unprecedented economic growth during the 5 year plans. Doesn't that say it all?

Matt