What the left gets wrong about economics that annoys the shit out of me

[crazy canuck]

What do you mean by the Free Market?

Food production (the example you used) is subsidized by government.  I think there is very little that is produced by something that is a Free Market in the sense that it is completely independent of government involvement.  But perhaps you meant something different when using that phrase.

I don't know anyone who uses "free market" in the manner of "completely independent of government involvement". So yeah, pretty safe bet that isn't what I mean. I think you knew that though.

No, I don't know what you mean by Free Market.  I actually think it is a big problem with American political discourse.  So much emphasis is put on safeguarding whatever that is, but it does not actually exist.  All markets exist within governmental regulatory and taxation policy.  It is impossible to think of an example where that is not so, except for a failed state.  The reason for raising this point is to illustrate that you are drawing a false dichotomy in these two threads.  The US does have government intervention in its economy.  The interesting political question is how government should best intervene to obtain the best outcomes and how that should be assessed.

 

I don't disagree that that is what the interesting discussion should be around.

And yes, that is a huge problem in American political discourse.

And I think that right now, there is a generation on the left that appears, to me, to be wanting to throw the baby out with the bathwater - they are beginning to identify free market capitalism as the problem. Not only is it not the problem, it is actually the solution. See the previous post in this very thread, in fact.

Part of this manifests itself in the perception among the left that in fact poverty (as an example) is actually getting WORSE. Which is simply not only untrue, it is badly untrue.

But we run into a problem with what you mean by free market capitalism.  What is it?  If you are talking about a market that is properly (however, one might decide that to optimally be) regulated by the state then you are no longer talking about free market capitalism but something else.  That something else can be the solution - but I think the left is correct, whatever the solution is, it is not free market capitalism.  Mainly because there is no such thing.

[Berkut]

Not interested in your semantics debate. "There is no such thing" as free market capitalism. OK.

[crazy canuck]

Not interested in your semantics debate. "There is no such thing" as free market capitalism. OK.

If you can't explain what you mean by that term, and yet assert it is the solution.  There is a bit of a problem.

[Berkut]

Not interested in your semantics debate. "There is no such thing" as free market capitalism. OK.

If you can't explain what you mean by that term, and yet assert it is the solution.  There is a bit of a problem.

Your right. You win. I am definitely completely wrong. Well done.

THere is no such thing as free market capitalism. Got it.

[grumbler]

 A "free market" is said to exist in the US and in economics generally (but not, apparently, in Canada) when the government is not involved in the setting of prices or the manipulation of supply or demand.  Government in the US definition of a free market (but maybe not the Canadian one) still has a role in the provision of currency, in maximizing the accuracy of the buyers' information about the products being marketed and the seller's information about the ability of the buyer to pay, and the provision of mechanisms to resolve disputes between and among buyers and sellers, and so forth.

Some Canadians, apparently, don't understand the concept at all and think that it does not exist.  They are the flat-earthers of economics.

[grumbler]

Not interested in your semantics debate. "There is no such thing" as free market capitalism. OK.

If you can't explain what you mean by that term, and yet assert it is the solution.  There is a bit of a problem.

Your right. You win. I am definitely completely wrong. Well done.

THere is no such thing as free market capitalism. Got it.

That's how to do it.  Congrats.  I'm still learning to properly bail on fools.

[Solmyr]

I don't think "you are not as poor as a dirt-farming peasant in the Middle Ages" is a useful metric. Sure, everyone has become mathematically less poor in the last couple of centuries. On the other hand, current poverty, as in "you have to decide whether to eat or pay rent this month, and you cannot get sick", is also a result of free market capitalism.

Except that is simply not true.

Free market capitalism has resulted in the eradication (or at worst the radical reduction) in the number of people globally who have to decide whether to pay rent or eat - that kind of abject poverty you are talking about is a tiny fraction of what it used to be - the metric is not "are you a dirt faming peasant". The metric is the UN sponsored definitions around extreme poverty has shown that the percentage of the world population living in that state has declined from about 50% in 1950 to about 10 percent today.

That is the exact same time that world productivity has sky rocketed, and the one is BECAUSE of the other. Income distribution since 1975 has dramatically shifted such that the majority of people no longer live under the poverty line defined in real, adjusted dollars. Worldwide per capita GDP has gone from something like $2000/year in 1950 to over $11,000 per year in constant dollars.

You are simply wrong.

Worldwide per capita GDP is a useless measure when you have a world with people standing in line for free leftover food and Jeff Bezos buying a yacht for his yacht. That GDP is not distributed fairly in any way.

[Solmyr]

What annoys me about the left and the economics is a general mindset that what matters is the intention and not the actual outcome.  If you had good intentions but (predictably) terrible outcomes, it's the fault of the awful people who took advantage of the misaligned incentives you put out there.  The real costs that your good intentions inflicted on real people is not on you, what matters is that you meant well.

Amen.  If you push for $15 minimum wage and millions are pushed into unemployment, that's YOUR policy causing that.  It's not (the Jews) gaming the system.

Second order effects and elasticity, two blind spots of the left.

When employers don't want to pay a minimum wage a person can live on, that's totally capitalism causing that.

[Josquius]

What annoys me about the left and the economics is a general mindset that what matters is the intention and not the actual outcome.  If you had good intentions but (predictably) terrible outcomes, it's the fault of the awful people who took advantage of the misaligned incentives you put out there.  The real costs that your good intentions inflicted on real people is not on you, what matters is that you meant well.

Amen.  If you push for $15 minimum wage and millions are pushed into unemployment, that's YOUR policy causing that.  It's not (the Jews) gaming the system.

Second order effects and elasticity, two blind spots of the left.

Wut?
This is the rights major blind spot. They're all about immediate cause and effect.
Close some loss making industries to save a few million? Pure common sense logic! Let's do it!... That the damage this brings about costs in the billions not to mention the massive human impact.... Well that's not to be considered.

The left meanwhile are all about not particularly obvious links between on the surface seemingly disconnected issues. For instance invest invest in society to reduce the crime rate.

This of course is a key advantage of the right. Their stuff is a lot more hit the nail with the hammer and easier to sell.

[Admiral Yi]

When employers don't want to pay a minimum wage a person can live on, that's totally capitalism causing that.

No one is working 40 hours a week and starving.  The discussion has moved on.  Now we're talking about supporting a family on 40 hours a week.

[Valmy]

When employers don't want to pay a minimum wage a person can live on, that's totally capitalism causing that.

No one is working 40 hours a week and starving.  The discussion has moved on.  Now we're talking about supporting a family on 40 hours a week.

The idea is "living wage" which means more than just not starving to death. Plenty of people who work full time are on federal benefits or homeless. I find that rather annoying.

[Berkut]

I don't think "you are not as poor as a dirt-farming peasant in the Middle Ages" is a useful metric. Sure, everyone has become mathematically less poor in the last couple of centuries. On the other hand, current poverty, as in "you have to decide whether to eat or pay rent this month, and you cannot get sick", is also a result of free market capitalism.

Except that is simply not true.

Free market capitalism has resulted in the eradication (or at worst the radical reduction) in the number of people globally who have to decide whether to pay rent or eat - that kind of abject poverty you are talking about is a tiny fraction of what it used to be - the metric is not "are you a dirt faming peasant". The metric is the UN sponsored definitions around extreme poverty has shown that the percentage of the world population living in that state has declined from about 50% in 1950 to about 10 percent today.

That is the exact same time that world productivity has sky rocketed, and the one is BECAUSE of the other. Income distribution since 1975 has dramatically shifted such that the majority of people no longer live under the poverty line defined in real, adjusted dollars. Worldwide per capita GDP has gone from something like $2000/year in 1950 to over $11,000 per year in constant dollars.

You are simply wrong.

Worldwide per capita GDP is a useless measure when you have a world with people standing in line for free leftover food and Jeff Bezos buying a yacht for his yacht. That GDP is not distributed fairly in any way.

It is certainly relevant unless you are arguing that the unfairness (and that is a useless term anyway) is so bad that in fact ALL of the 6X increase in GDP was consumed by the non-poor. However, this is not the case.

Again, there is data on this.

https://www.gapminder.org/tools/#$model$markers$mountain$encoding$frame$value=1878;;;;;&chart-type=mountain&url=v1

This has an amazing visiualization of how the income distribution has shifted over time.

You are, again, simply wrong.

In 1870 86% of the world population lived in extreme poverty.
By 1950 it was 57%
In 1975 it was 50%
In 2000 it was 20 %
And in 2018 it is just over 10%

Since 1950 world average GDP has gone up 6X.

There are problems with inequality to be sure, but the incredible explosion of productivity we have seen in the last 50 years has lifted most of the poorest people in the world out of abject poverty. Maybe it should have lifted more, and maybe it should have lifted them further. Those are good and important arguments to be made.

But the argument that this has not happened, and in fact that free market capitalism has somehow worked against the eradication of poverty is simply not true.

[Admiral Yi]

Wut?
This is the rights major blind spot. They're all about immediate cause and effect.
Close some loss making industries to save a few million? Pure common sense logic! Let's do it!... That the damage this brings about costs in the billions not to mention the massive human impact.... Well that's not to be considered.

The left meanwhile are all about not particularly obvious links between on the surface seemingly disconnected issues. For instance invest invest in society to reduce the crime rate.

This of course is a key advantage of the right. Their stuff is a lot more hit the nail with the hammer and easier to sell.

I'll hold you to your word: what are the second order effects of "investing investing in society to reduce the crime rate?"

[Admiral Yi]

The idea is "living wage" which means more than just not starving to death. Plenty of people who work full time are on federal benefits or homeless. I find that rather annoying.

I'm familiar with this euphemism.  I was responding to Solymr who used different language.

[crazy canuck]

Not interested in your semantics debate. "There is no such thing" as free market capitalism. OK.

If you can't explain what you mean by that term, and yet assert it is the solution.  There is a bit of a problem.

Your right. You win. I am definitely completely wrong. Well done.

THere is no such thing as free market capitalism. Got it.

Not sure why you have swung to that extreme.  I am not sure what your point is, so I am also not sure if you are right or wrong.  If for example what you mean by free market capitalism is an economy in which there is competition amongst potential providers of goods and services then there is something there to form the basis for agreement.  We could then go on to discuss the amount of government intervention and regulation needed to ensure a competitive environment.  However, if you think free market means government should not be involved in that sort of regulation then we would likely have a lively disagreement that your vision for the future is in fact the solution.