Potent Quotable



I find it striking that Rand’s great protagonists were inventors and businessmen, yet her admirers tend to focus almost exclusively on rational evangelism. The most powerful model for collective action appropriate to individualists is business, yet business gets short shrift from libertarians as a means for curtailing the state - they tend to devote themselves instead to collective political movements.

- JTK

Share this

Scott- The argument is that

Scott-
The argument is that all government action is regulatory, because the government sets all the background property rights in the first place. All things are coercion – when any property right of mine is enforced then you are coerced by being denied access to my property. The state cannot help but coerce.

I think that's probably right, and worth keeping in mind for those who would argue that the libertarian utopia is non-coercive. If there's anything I set out to accomplish when I argue with Libertarians, it's to convince them that they don't have a mrket on non-coercion which they often pretend that they do (though the smarter ones don't.) The libertarians who get all fiery and talk about how taxation "puts a gun to peoples' heads" need to really understand an argument like this. It's a matter of which form of coercion you prefer, when it comes down to it.

Micha-
I don’t understand what this means. Of course there is no agent who acts on behalf of all corporations. What does that have to do with anything?

you seemed to be arguing that it might be macroeconomically beneficial for corporations not to pursue subsidies so that they'll be subjected to competition. I was just saying that that argument is irrelevant to a market structure.

And what is your evidence that nearly all corporations would benefit from subsidies?

well it seems remarkably intuitive, for one thing- I think I'd have to see evidence against it. I can't imagine that if you asked a serious business man if he'd like a billion dollars for free ot help defray his costs he wouldn't agree that it'd be beneficial. It's just a way of externalizing and reducing costs- it seems clearly in every businesses best interest. It'd be like asking for evidence that businesses would like to pay their workers less- of course they wuld. Now whether it's always it's always efficient to spend the money on lobbying neccesary is another question. It seems fair to assume, almost tautologically, that the ones who do find it profitable, but it may be the case that the ones who don't (and which ones are they?) may not find it cost effective to spend the lobbying money neccesary.

Since you seem to want to accept, at least for the purposes of this argument, the assumption that firms are rational actors,

I think this is an obvious assumption. Are there times when you feel I disregard this analysis? Because I don't think I ever do, not should i.
Because if they didn’t, according to your logic, they wouldn’t be acting rationally, which you’ve already said corporations do not do.

no that's not true- for some it may not be CBA efficient. For the ones who do though, I think it's a fair assumption.

Yes, quarterly profits due influence stock price, but they’re certainly not the only factor, nor even the most important one. The primary determining factor is expectations of future earnings.

this is a bit off topic, but I don't agree. I think the primary factor is "what average opinion expects avergae opinion to be" as Keynes put it.

If quarterly profits were all that mattered, lumber companies wouldn’t plant trees that take fifty years to mature. Amazon stock wouldn’t have reached the insanely high valuations that it did. Technology companies wouldn’t be investing in research that will take ten to twenty years to bear fruit.

people can look in the future, sure, but I think the primary pressures are short-term profti oriented. I don't think you can expect a firm to look 20 years in the future and hurt their profits now in the service a new-fangled business plan wrought with uncertainty. Especially given the context we're discussing- "I'm going to turn down government assistance today in hopes that we'll be more efficient in the future as a result." If it means letting your compeition get billions of dollars in free money while you turn it down because of your embrace of vague free market ideals, most people would think you were insane. I think a CEO that did that would be out quickly. Imagine if Boeing stopped lobbying for funds, hoping that they might someday be able to turn their defense goods into a more efficient profitable industry. Lockheed would begin destroying them in the short term, and then as Lockheed benefited from the dual-use technologies (which the government funds for defense but then Lockeheed gets to use for private profit) Lockheed would probably slay them. Even if Boeing was the more efficient company, that efficiency would have to be worth billions and billions in lost yearly revenue.

David-
Matt - I’ll need a reference for the giving Indian lands to Hill. I’ve been researching Hill and the GN for the last few months, and I’m afraid I haven’t seen it.

from answers.com:
"including a presidential veto of a bill that would allow Hill to build legally through American Indian territory (Cleveland later changed his mind)..."

There are lawsuits to this day trying to sue the railway for theft of indian lands, which I'm sure you could find if you looked for it. This reference should be enough to convince you gov't assistance- Celevland changed his mind and passed a law that allowd Hill to build through indian lands.

Yes, historically this meant government intervention to “help” those businesses. Unfortunately, the “It has been done this way in the past therefore it is the only way to do it ever” is a fallacy.

oh it's a definite fallacy, but despite all the rhetoric about innovation being tossed around businesses are unlikely to question the government money being thrown at them in hopes that the "new way" will be better for them. If you're a kid with Billionaire parents and your only goal is to have as much money as possible (not to achieve some level of independence, which happens, but is irrelent to this analogy) you be remiss not to ask your parents for tons of money. Regardless of how much money you can make on your own, the parent's money will always help. Asking your parents to hook you up with jobs and using your connections is a good idea too.

This goes for Micha to: if you guys want to argue that a business which refused to pursue government assistance will be more long-run profitable, then you'll be hard pressed to explain why the functioning of our quasi-competitive market hasn't made government subsidies obsolete.

Naturally occurring experiments with any semblance of proper controls are very rare. Which is why I mentioned Hill and the GN versus the other transcontinentals.
this is absolutely true. Unfortunately, Gov't assistance goes so deep that it's hard to find a good example. Even for a guy as brilliant and hard-nosed as Hill, it'd still be crazy to completely exchew gv't assistance.

Oh and I think you may be assuming that the GN benefitted from the land grants that every transcontinental was eligible for, or more specifically the checkerboard pattern of land set aside for railroads and the periodic square mile on either side of the railroad. This is one of the subsidies that Hill did not take advantage of.

well that's pretty impressive, but it's probably worth mentioning that this seems like a giant exception to the rule. And of course, there are all kinds of government assistances in the background of this, like the gov't led slaughter Indians and the theft of their lands, which was clearly instrumental in constructing a railroad. That falls neatly in the category of "providing new markets for profit" a major function of the government which continues unabated today.

I don’t know how to answer that question. Because you see, most environmental groups actually receive significant funding from major corporations. For example, the Sierra Club has (still does?) received huge infusions of cash from Boeing. Think this is because Boeing is trying to create goodwill? Hah. They are making sure their competition can’t compete effectively.

things like this happen all the time, but the funding companies have their own agendas as well, which will neccesarily limit what the fundees can do. Nevertheless, I think most lobbying is "positive" lobbying (which asks for favors) or "narrowly defensive" against large groups of the population who are trying to have an effect on the government (as happenswith the tobacco industry.)

Don,
Let’s say that you were starting a spaceline company and that Congress was considering a law that would require your vehicles to carry a data recorder that uselessly met the exact same requirements as for a commercial airliner.

this does go on, of course, but most of this "defensive" lobbying is anti-democratic. A group tries to pressure congress to do something and business comes around and uses their money to shut them down. More commonly "defensive lobbying" is simply a blanket term used to pretend like the vast sums spent by corporations merely act to protect them (the coporations) from meddling Randian politicians who just want to regulate them for the hell of it. I don't see the value in such a concept.

The line between defensive lobbying and offensive lobbying is very blurred. In making sure that regulatory requirements do not hurt my business, it is very likely that those comprimises that needed to be made will be injurious to another company. Going to D.C. is a negative sum game, any win or even holding a position comes at another’s expense.

you're right here at first, but I doubt it's a negative sum game. Undoubtedly, there are battles between business sectors but I think primarily lobbying acts to increase or preserve government assistance (like using US political weight to open new markets in Central America.)

Matt

Don, The line between

Don,

The line between defensive lobbying and offensive lobbying is very blurred. In making sure that regulatory requirements do not hurt my business, it is very likely that those comprimises that needed to be made will be injurious to another company. Going to D.C. is a negative sum game, any win or even holding a position comes at another's expense.

David, Honestly, I don’t

David,

Honestly, I don’t know what “defensive” lobbying is either. Perhaps it is doing enough lobbying/campaign contributing that some politician doesn’t pressure DoJ or Attorney Generals to come after the company?

Let's say that you were starting a spaceline company and that Congress was considering a law that would require your vehicles to carry a data recorder that uselessly met the exact same requirements as for a commercial airliner.

Would you sit back and do nothing?

Regards, Don

And further Matt - I don’t

And further Matt -

I don’t know what defensive lobbying is. Does that term refer to corporations who spend 50 times as much as an environmental group could ever hope to spend ensuring that popular organizations are unable to affect a positive change in government?

I don't know how to answer that question. Because you see, most environmental groups actually receive significant funding from major corporations. For example, the Sierra Club has (still does?) received huge infusions of cash from Boeing. Think this is because Boeing is trying to create goodwill? Hah. They are making sure their competition can't compete effectively.

Honestly, I don't know what "defensive" lobbying is either. Perhaps it is doing enough lobbying/campaign contributing that some politician doesn't pressure DoJ or Attorney Generals to come after the company?

And, of course, the

And, of course, the government probably set and protected the property rights of the company in question.

couldn't have said it better myself.

Enabling the settlement of

Enabling the settlement of new frontiers would historically mean ships and wagons. In the modern age it would be reuseable spacecraft and/or whatever Patri needs for his floating cities. I'd place computers and the Internet in the second category.

Yes, historically this meant government intervention to "help" those businesses. Unfortunately, the "It has been done this way in the past therefore it is the only way to do it ever" is a fallacy. I trust I need not explain it in detail. The second problem is that throughout history governments have largely taken active interest in many portions of the economy, getting away from that is impossible. Naturally occurring experiments with any semblance of proper controls are very rare. Which is why I mentioned Hill and the GN versus the other transcontinentals.

Oh and I think you may be assuming that the GN benefitted from the land grants that every transcontinental was eligible for, or more specifically the checkerboard pattern of land set aside for railroads and the periodic square mile on either side of the railroad. This is one of the subsidies that Hill did not take advantage of. When I write 'subsidy' I mean any gift of economic value to a specific company or industry by government.

Matt - I'll need a reference

Matt - I'll need a reference for the giving Indian lands to Hill. I've been researching Hill and the GN for the last few months, and I'm afraid I haven't seen it. (Bleg - does anyone have an electronic copy of Hill's papers? or know where I can get dead tree copies? I'd rather not wait until I can get to Minnesota to read them, nor do I want to try to read them all in just a few days.)

Intuitively though, stock

Intuitively though, stock prices seem to reflect quarterly projections and as such it seems that corporations would tend to focus on the same.

Yes, quarterly profits due influence stock price, but they're certainly not the only factor, nor even the most important one. The primary determining factor is expectations of future earnings. If quarterly profits were all that mattered, lumber companies wouldn't plant trees that take fifty years to mature. Amazon stock wouldn't have reached the insanely high valuations that it did. Technology companies wouldn't be investing in research that will take ten to twenty years to bear fruit.

The "correct" valuation of a stock is the discounted sum of all future earnings, not just those for the next or last quarter. Allowing for the difficulties of predicting this correctly, and the occasional speculative frenzy, stock prices do tend to stay in this general neighborhood.

Sweet! How’d you expect anyone to catch that? I only remember it because I remember thinking that it was such a spot-on brilliant mock-jeopardy category.

It's not that obscure; I caught it, but I didn't say anything because I didn't know it was worth cool points. I guess I get more, for not even knowing how money I am.

...And I guess I lose them, for figuring it out. Thanks a lot.

Crap, I accidentally erased

Crap, I accidentally erased my long comment. Once more.

well right, but there’s no agent of action who acts on behalf of all corporations at the same time, and I’m pretty sure nearly all corporations would find it in their narrow self-interest and as such would pursue the subsidies.

I don't understand what this means. Of course there is no agent who acts on behalf of all corporations. What does that have to do with anything?

And what is your evidence that nearly all corporations would benefit from subsidies? Since you seem to want to accept, at least for the purposes of this argument, the assumption that firms are rational actors, then is it your claim that nearly all corporations do lobby the government for special favors? Because if they didn't, according to your logic, they wouldn't be acting rationally, which you've already said corporations do not do.

Which thread is that on? I think I did respond to that, though it was presented as more of a sarcastic aside than a point.

Ah, my mistake.

How’d you expect anyone to catch that?

It's pretty well known in my social circle.

which argument is it? The

which argument is it? The one about property rights being defended by the state, or about taxation going to ensure property right protection?

The argument is that all government action is regulatory, because the government sets all the background property rights in the first place. All things are coercion -- when any property right of mine is enforced then you are coerced by being denied access to my property. The state cannot help but coerce.

Every action of the state is regulatory, and thus, there is no distinction between the private and public spheres.

So, according to the argument, it's not helpful to say that you think the state should not interfere with, say, the railroad industry. It's already interfering, because it's enforcing their rights in property.

I can elaborate more if that's not illustrative enough.

No I know you didn't set up

No I know you didn't set up the argument- I just thought it was funny that you suggested it and then kind of argued against it. If you're just interested in the argument, well hell so am I... I think it's a fair point that the government enforces private property rights, especially at a time like the one under discussion- when they were clearly illegal (being as they were stolen from the indians) and heavily contested. The beneficiaries of private property rights enforcement are constantly arguing against a tazation scheme to make such protection more proportionate to those who need it most (a serious scaled property tax scheme.) Generally, I think property rights are the invisible right, that everyone seems to miss when they discuss government paternalism, and freedom and (in Nozick's book) "patterned and unpatterned" theories.

Matt

I wasn’t claiming that

I wasn’t claiming that its not in the interests of any corporations to lobby for special favors; only that it’s not the case that all corporations would maximize shareholder value by lobbying.

well right, but there's no agent of action who acts on behalf of all corporations at the same time, and I'm pretty sure nearly all corporations would find it in their narrow self-interest and as such would pursue the subsidies.

Evidence? And even if it’s true, and I’m not convinced it is, I recall you still have not yet responded to my point in a different thread that political pressures are even more short term than market pressures.

Which thread is that on? I think I did respond to that, though it was presented as more of a sarcastic aside than a point. I thought it was commonly accepted- I'll find a reference if you want one. Intuitively though, stock prices seem to reflect quarterly projections and as such it seems that corporations would tend to focus on the same. I'm not sure that political pressures are more short-term, simply because (as I said on the other thread) other contexts besides a corporate one are mre conducive to long-run thinking.

A billion cool points go to matt.

Sweet! How'd you expect anyone to catch that? I only remember it because I remember thinking that it was such a spot-on brilliant mock-jeopardy category.

Scott-

There are other invisible rights–peoples’ right to life, for instance. But, regardless, I’m merely restating a famous argument by Robert Hale; I think presently Cass Sunstein is fond of it. Hale developed the idea in 1923: Robert L. Hale, Coercion and Distribution in a Supposedly Non-Coercive State, in: Political Science Quarterly 38 (1923), 471. The article is a mainstay of the American school of legal realism.

which argument is it? The one about property rights being defended by the state, or about taxation going to ensure property right protection?

Matt

Generally, I think property

Generally, I think property rights are the invisible right, that everyone seems to miss when they discuss government paternalism, and freedom and (in Nozick’s book) “patterned and unpatterned” theories.

Depends on your crowd. There are other invisible rights--peoples' right to life, for instance. But, regardless, I'm merely restating a famous argument by Robert Hale; I think presently Cass Sunstein is fond of it. Hale developed the idea in 1923: Robert L. Hale, Coercion and Distribution in a Supposedly Non-Coercive State, in: Political Science Quarterly 38 (1923), 471. The article is a mainstay of the American school of legal realism.

It's a fairly brilliant argument, though I don't agree with it.

by the way, is this thread

by the way, is this thread title a reference to a faux-Jeopardy category used in in the SNL skits with the abusive “Sean Connery"? Potent Potables I think it was…

If it is, I should get a billion cool points for catching that reference.

A billion cool points go to matt.

for one thing, the

for one thing, the theoretical “proof” that corporations consistently act irrationally by requesting government assistance is very unconvincing on its face.

I wasn't claiming that its not in the interests of any corporations to lobby for special favors; only that it's not the case that all corporations would maximize shareholder value by lobbying.

. It’s also worth mentioning that the profit pressures tend be decidely short-term in orientation, thus further negating the “long run” argument you’re making.

Evidence? And even if it's true, and I'm not convinced it is, I recall you still have not yet responded to my point in a different thread that political pressures are even more short term than market pressures.

The route of business and

The route of business and pther private endeavors is the only one that will work for liberty. We should all forget politics and its endless log rolling. Maybe a good laugh every now and then at their common stupidity. The better idea? Simple, run a business without paying taxes, hide assets offshore wherever possible, evade or disregard idiotic regulations, smuggle (drugs, arms, anything thats black market or grey market) start a business that will weaken the governments hold over us (as listed above by David Masten) If a libertarian chap should become rich in the pursuit of his wonderfully illegal businesses endeavors, then I would think it kind of him to educate others as much as possible about the benefits of the market and the evils of the state. Donations to libertarian think tanks, founding such a think tank, founding a private school thats based on the principles of liberty, especially one for the younger kids, highschool and down perhaps.
Every successful new business expands our choices. Government has never done this, only ocasionaly given back choices that were rightfully ours in the first place. Business is the only way to go.

looks like you’re arguing

looks like you’re arguing with yourself here…

Just developing the argument.

I didn't say anything about the morality of property rights.

looks like you're arguing

looks like you're arguing with yourself here... If property rights are unjustifiable and immoral than it doesn't matter that the gov't was paid to use force- it was still wrong. Regardless, I doubt the state was paid a commensurate amount by the biggest beneficiaries for all the property enforcement that they do.

'Tis.

'Tis.

by the way, is this thread

by the way, is this thread title a reference to a faux-Jeopardy category used in in the SNL skits with the abusive “Sean Connery"? Potent Potables I think it was…

I've seen the sketch, but I believe that "Potent Potables" is a real Jeopardy! topic that comes up from time to time.

Of course the companies,

Of course the companies, too, gave the government the money and resources with which the government was able to protect that property.

It depends where you think the property rights fall.

That’s not to say he

That’s not to say he didn’t recieve government assistance. Again, subsidies are probably not even the most important way the government assists businesses- it’s just the most obvious. Congress passed a series of laws which handed over Indian land to Hill for the purpose of building the railroad. That’s massive government assistance and, to put it in context, his buiness would have certainly been less profitable if would have had to pay all the costs of that land transfer.

And, of course, the government probably set and protected the property rights of the company in question.

by the way, is this thread

by the way, is this thread title a reference to a faux-Jeopardy category used in in the SNL skits with the abusive "Sean Connery"? Potent Potables I think it was...

If it is, I should get a billion cool points for catching that reference.

Dave thanks for naming a

Dave

thanks for naming a few...
- Any business enabling the settlement of new frontiers.
I'm not sure what this would be, but if it means things like the internet I think most businesses like this- historically- have been beneficinaries of government support and probably fall prey to same devious logic I mention above (about profitably requesting government assistance.)

- Any business providing cryptography or other means to hide information from the government or get around silly laws
This sounds good, though it doesn't have to be a business (and may not be able to be given some of the laws about cryptography.)

- any business providing an alternative to government services.

I disagree with this approach for my own reasons, but I see the logic to it.

And it is not clear that a businessman must take advantage of government handouts in order to be successful. James Hill’s Great Northern Railway was the only transcontinental railroad to not accept any subsidies, and was also the only transcontinental railroad that did not go bankrupt during the recession of 1893 and in fact remained profitable at least until the WWI railroad nationalization.

That's not to say he didn't recieve government assistance. Again, subsidies are probably not even the most important way the government assists businesses- it's just the most obvious. Congress passed a series of laws which handed over Indian land to Hill for the purpose of building the railroad. That's massive government assistance and, to put it in context, his buiness would have certainly been less profitable if would have had to pay all the costs of that land transfer.

Micha-
Read the freaking link, Matt. Jeez.

I really don't want to. I've got my reasons.

I wonder if reliance on corporate subsidies can be harmful in the same way that conservatives and libertarians often criticize the welfare system and foreign aid as being harmful. Corporations become dependant on these subsidies, and instead of focusing on innovation and other ways of increasing producitivity, they instead focus on lobbying efforts, which do not lead to sustainable long term growth.

I think it can be harmful and is harmful in exactly the same way. It's actually worse though, because while a moral argument can be contructed for giving money to the poor I don't think similar arguments work as well for wealthy corporations. However, because these subsidies and further examples of government assistance aren't going away we should probably just lay off our protestations of the minor spending used to aid poor people for equitability's sake.

So while it may be the case that defensive lobbying is sometimes warranted,

I don't know what defensive lobbying is. Does that term refer to corporations who spend 50 times as much as an environmental group could ever hope to spend ensuring that popular organizations are unable to affect a positive change in government?

it’s not at all clear to me why failure to lobby for corporate subsidies represents a failure to maximize shareholder profits over the long term.

for one thing, the theoretical "proof" that corporations consistently act irrationally by requesting government assistance is very unconvincing on its face. You may be correct on macro grounds (though I doubt it)- that it's better for the economy in the long run to force businesses to innovate and compete rather than fatten up on government assistance, but that has nothing to do with an individual firm's decision. It's also worth mentioning that the profit pressures tend be decidely short-term in orientation, thus further negating the "long run" argument you're making.

Matt

Charles, Becoming an

Charles,

Becoming an entrepreneur with all of the risks that entails isn't the only way of promoting market alternatives to government. One could help fund other entrepeneurs, or do research into alternatives that entrepreneurs could later use.

Though I agree with his statement above, one issue on which Kennedy and I differ is the usefulness of rational evangelism. I agree that it is a poor strategy to try to create more libertarians to help win elections, but convincing people to adopt libertarian views may be helpful for other reasons. Some of these potential libertarians may be future entrepreneurs, who will be more likely to pursue their business idea if they understand the problem from a libertarian perspective. A statist who believes that the government is not only justified but morally required to provide service X is unlikely to pursue a business strategy of providing X privately.

Where would you place this

Where would you place this in the Business vs Politics continuum? :)

If more libertarians choose persuasion over market action (and don't think I have any reason to think so), perhaps it is because they simply don't want to take the risks involved in entrepreneurship. Most people aren't small businessfolk due to their perceived chances of failure (among other things). I'd think libertarians, more than other people, are keenly aware of the challenges involved in running an enterprise and are less likely to view the state as a means to catch them if they fall.

Speaking for myself, this is one of the reasons why I haven't started a company of my own...let alone one that is designed to offer products and services that let an individual escape the reach of the state.

I wonder if reliance on

I wonder if reliance on corporate subsidies can be harmful in the same way that conservatives and libertarians often criticize the welfare system and foreign aid as being harmful. Corporations become dependant on these subsidies, and instead of focusing on innovation and other ways of increasing producitivity, they instead focus on lobbying efforts, which do not lead to sustainable long term growth. So while it may be the case that defensive lobbying is sometimes warranted, it's not at all clear to me why failure to lobby for corporate subsidies represents a failure to maximize shareholder profits over the long term.

Anyway, this libertarian is

Anyway, this libertarian is busy with business. And it is not clear that a businessman *must* take advantage of government handouts in order to be successful. James Hill's Great Northern Railway was the only transcontinental railroad to not accept any subsidies, and was also the only transcontinental railroad that did not go bankrupt during the recession of 1893 and in fact remained profitable at least until the WWI railroad nationalization. The 19th century Central Pacific, Union Pacific, Southern Pacific, and Northern Pacific were abysmal failures.

What’s a good example of

What’s a good example of this?

Read the freaking link, Matt. Jeez.

Matt - - Any business

Matt -

- Any business enabling the settlement of new frontiers.
- Any business providing cryptography or other means to hide information from the government or get around silly laws
- any business providing an alternative to government services.

Matt, you may want to read

Matt, you may want to read Kennedy’s post before you dismiss his point as laughable.

Well I thought it seemed pretty clear from what you cited, but I fully admit I didn't follow the link. I think it was the Rand thing that threw my off, as I sense a major contradiction between rands individual heros and Friedmans's faceless bureacrat theories- more on this at the bottom.

If you want social change, Kennedy argues - and I’m inclined to agree - you want to be on the right side of the public goods trap. Offering consumers a product they are willing to pay for which also happens to weaken the state’s control over our lives is on the right side of this trap and requires no rational evangelism.

What's a good example of this? Of course, you could probably guess that my position on this is that if it increases the unaccountable totalitarian power of large private businesses it's even worse than having power in the hands of the state. Neverthless, I'm curious as to how this would work...

Incidentally, with which part of Friedman’s article do you disagree?

the morally prescriptive aspect of it. I think Friedman is dead on regarding the institutional behavior of corporations, rightly downplaying the role of individuals in favor of a "pressure" analysis. He just seems to add "yeah and that's what should happen" which is morally reprehensible.

Also, for what it's worth would you agree that Rand's heros tended to violate the Friedman dictum? Dagny, for instance, refused to play the political game the way her competitors were, and that surely would've cut into shareholder profits. With D'Anconia it's even more clear cut. I think Friedman's alot more close to the real world, would you agree?

Matt

I've obsessed about this

I've obsessed about this before: the difference between those (like myself, I'm afraid) who talk (blog) about being free and self-governing and participating in free exchange, and those who just go out and do these things.

Maybe you think that simply

Maybe you think that simply because those libertarian in the business world are too busy running their business to make waves on the political front. From the libertarians I know, a lot more of them are involved in their business and career then they are involved in making things happen in the political movement.

being in the business world

being in the business world neccesitates compromising your libertarian ideals in most scenarios. If other businesses are lobbying for government support and taking advanatage of taxpayer money you'd be remiss if you did not because it'd render your business uncomeptitive. You'd become exactly like the Welfare bums looking for handouts (not that I agree with that discription, but I'm trying to write in a way that's rhetorically appealing to libertarians) except you wouldn't even need the handouts. Your responsibility to make the business profitable would lead to compromise your beliefes.

The cited JTK quote which seems to imply that Business has some kind of purifying effect on Government is basically laughable: "business gets short shrift from libertarians as a means for curtailing the state"- why in the hell would a business curtail the state? All they'll do is shout about curtailing the state so they can pull the modicum of funding used to help the poor onto the their own side of table. If theye didn't, they'd be in violation of Friedman's great ethical commandment: "increase profit for your shareholders."

Matt

"The PayPal Wars: Battles

"The PayPal Wars: Battles With eBay, the Media, the Mafia, and the Rest of Planet Earth" illistrates quite clearly what happens to a libertarian operating in a regulated world.

Matt, you may want to read

Matt, you may want to read Kennedy's post before you dismiss his point as laughable. He is not making a descriptive claim about businesses as they currently exist (at least, not all of them). Rather, he is making a prescriptive claim that libertarians who want to curtail the state would have better luck doing so through a business model than through a political model. Political change necessitates widespread contribution to a public good, which is difficult to achieve, because you are asking people to act against their self interests. The only way to get people to do this is through ideology, and it is difficult to get people to adopt an ideology that convinces them to act against their own interests.

If you want social change, Kennedy argues - and I'm inclined to agree - you want to be on the right side of the public goods trap. Offering consumers a product they are willing to pay for which also happens to weaken the state's control over our lives is on the right side of this trap and requires no rational evangelism.

Incidentally, with which part of Friedman's article do you disagree?

True, Chris, there are

True, Chris, there are setbacks, but then, there are sucesses too. How many libertarian political successes can you cite?

you seemed to be arguing

you seemed to be arguing that it might be macroeconomically beneficial for corporations not to pursue subsidies so that they’ll be subjected to competition. I was just saying that that argument is irrelevant to a market structure.

No, I said nothing about macroeconomics. I said it may be in the microeconomic self-interest of corporations to not pursue subsidies.

And what is your evidence that nearly all corporations would benefit from subsidies?

well it seems remarkably intuitive, for one thing- I think I’d have to see evidence against it.

You're the one making the positive claim, no? The burden of proof seems to be on you.

it seems clearly in every businesses best interest.

So I assume you give no credence to the argument that welfare for the poor and foreign aid can often hurt the recipients by creating dependancy?

Now whether it’s always it’s always efficient to spend the money on lobbying neccesary is another question.

I don't see why you think it is a seperate question. The opportunity costs of lobbying are extremely important for determining whether it is in a firm's interests.

no that’s not true- for some it may not be CBA efficient. For the ones who do though, I think it’s a fair assumption.

But that's just a tautology. If I recall correctly, and this thread is getting too long and complicated for me to go back and check, I think you were claiming that it is in the interests of all corporations to get subsidies from the government. I disputed this, claiming that it may not be the case. Now you are refining your original claim to mean only those firms for whom it is CBA efficient? Well, of course! Who would disagree with a tautology like that?

Yes, quarterly profits due influence stock price, but they’re certainly not the only factor, nor even the most important one. The primary determining factor is expectations of future earnings.

this is a bit off topic, but I don’t agree. I think the primary factor is “what average opinion expects avergae opinion to be” as Keynes put it.

Whose opinions are we averaging? The general public? Or those involved in buying and selling stocks? If the former, you seem to be claiming that the price of a good (a stock) is determined, not by the supply and demand for that good, but by something else entirely. Is this what you are claiming?

This goes for Micha to: if you guys want to argue that a business which refused to pursue government assistance will be more long-run profitable, then you’ll be hard pressed to explain why the functioning of our quasi-competitive market hasn’t made government subsidies obsolete.

Again, I never claimed that it's not in the interest of any business to lobby for government money; only that it may not be in the interests of every single one.

this does go on, of course, but most of this “defensive” lobbying is anti-democratic.

Good lord, by the same token, using a gun to prevent oneself from being gang raped is anti-democratic as well!

Fuck that kind of democracy.

No, I said nothing about

No, I said nothing about macroeconomics. I said it may be in the microeconomic self-interest of corporations to not pursue subsidies.

but the argument you make is a macroeconomic one- you haven't argued the point you say you have. Give me an example of a firm who would deny a billion dollars in government assistance.

You’re the one making the positive claim, no? The burden of proof seems to be on you.

Look, asking me to "prove" that corporations like free money is an "iron man" fallacy. If you say "that kind of behavior would get someone killed" as a rebuttal to my argument and I ask you to cite a study on people not liking to be killed, wouldn't you consider that a little absurd? You might consder that fact that people constantly act to avoid death (as corporatins act to externalize cost and obtain free money) as all the proof you need. I'd be shocked if there was a study proving that corporations liked free money.

So I assume you give no credence to the argument that welfare for the poor and foreign aid can often hurt the recipients by creating dependancy?

those are societal arguments. Would you expect a welfare recipient to turn down the welfare check one day so it would make him more efficient? Or a country to refuse aid so they wouldn't become dependent? You're, once again, confusing a macro argument with what's in an individuals best interest. And, once again, your logic would force you to prove that nearly every corporation, nation, and person who accepts assistance does so irrationally; does so contrary to their own self-interest.

I don’t see why you think it is a seperate question. The opportunity costs of lobbying are extremely important for determining whether it is in a firm’s interests.

of course it is. As we were discussing- every firm would like free money. It may the case (though I'd be interestd in any evidence for this) that some firms find that they'd have to spend more than they'd gain and as such don't invest in political parties. If this happens, it nicely refutes your earlier point: "Because if they didn’t [ask for money], according to your logic, they wouldn’t be acting rationally, which you’ve already said corporations do not do." My position has been crystal clear and unwavering the whole time- corporations want free money, there may exist corporations who can't afford the entry costs into parties to gain access to the money, yet if they could get free money they would take it. You even basically grant this in your increasingly convoluted argument. Below:

Now you are refining your original claim to mean only those firms for whom it is CBA efficient?

meaning if the costs of attaining access to that money aren't too high. I personally doubt that this is a common occurence, but I'm willing to grant for the sake of argument the idea that some major firms dont find it profitable. That doesn't mean they don't want subsidies, it only means that the costs are too high. It's also worth pointing out that my real position was about compromising your libertarian ideals, and proving that there are a few firms who don't actively seek government assistance (though you've hardly proved this- just asserted it) hardly argues this point, because the scenario will be such for market reasons, not because of personal fiat.

Whose opinions are we averaging? The general public? Or those involved in buying and selling stocks? If the former, you seem to be claiming that the price of a good (a stock) is determined, not by the supply and demand for that good, but by something else entirely. Is this what you are claiming?

the stock investors. This position is as clear as can be: "it is not sensible to pay 25 for an investment of which you believe the prospective yield to justify a value of 30, if you also believe the market will value it at 20 three months hence." If you're investing to make money, your primary consideration will be what average opinion expects average opinion to be.

Again, I never claimed that it’s not in the interest of any business to lobby for government money; only that it may not be in the interests of every single one.

seriously what kind of point is this? For one thing, you haven't shown it to be true, and you've like to meet even a modicum of the standards you apparently seek to hold me to (asking me to prove that corporations want money) you could at least provide me an example of a corporation which eschews government assistance. You probably can't because I bet one doesn't exist. You might find some that don't get direct government subsidies, but I'd be surprised if you can find one that takes no benefit from stolen money (i.e. taxes.) I claimed that it was in the interest of every single business to get subsidies, not that it was cost-effective for every single business- though I think it's the case that the vast majority will find it cost-effective.

Again, why focus on this little tiny point about whether there's a business that, at oneparticular slice of time, doesn't accept government help? If the market changes in such a way they will start accepting it for one thing, simply out of rational self-interest and so really my deep point still stands: participating as a mjor player in business comprimises (in fact eliminates) your ability to make ethical decisions in line with true libertarian thought. Might you get lucky and get hired by the one business (which you can't even name) that doesn't accept government help? Maybe. And might the market change such that government help becomes easily obtainable and then, suddenly, you realize you don't have the capacity to make ethical decisions after all (which was my claim)? Yes.

Good lord, by the same token, using a gun to prevent oneself from being gang raped is anti-democratic as well!

not really. Our democracy desn't work precisely for reasons like this one. A large corporation is not comparable to a poor defenseless woman getting gang-raped by the evil populace. Sometimes, on major issues, people actually get together and lobby the government to change thing for the better. Arguing that imposing environmental regulations is analagous to rape is quite a stretch. More commonly, the corporation is actively doing some harm and they are restrained by organized factions of the general populace. Your analogy, reversed, would be quite a bit more accurate.

Matt

Hueter: Where would you

Hueter:

Where would you place this in the Business vs Politics continuum?

Maybe Freely's advice doesn't precisely fall into Business, but it does fit into the category of Manufacturing Your Own Freedom.

In any case, it's a strategy that's far more effective at said freedom-manufacturing than trying to appeal to the voters.

Matt, the act vetoed by

Matt, the act vetoed by Cleveland, and its replacement were to allow Hill to purchase Indian lands from the Indians. It is not a subsidy when government allows an individual to trade with others.