But it is a little interesting how that debate seems to follow you around, whether you start it or not. 
Not my fault!
Yes, it is an annoying human behavior that surpasses beliefs and ideologies 
Differences are essential to society, they prevent abuse from the majority.
I was the one to bring the subject to the table. Pardon me if this is annoying, but I admit I’m a fanatic.
I haven’t actually read much of this thread but I"ll jump in with my own two cents anyway. Historically countries with large middle classes have been the strongest, so does it not make sense to take money from the vastly wealthy (who 90% of the time got their money raping the public anyway) and use it to fund education and public works and such?
Robin Hood is one of the most well known fairy tales (at least in America) and it’s very moral is take from the rich and give to the poor. It’s so silly when people cry socialist and communist every time someone mentions redistribution of wealth and then go home to read Robin Hood to their kids.
Seems to be the old debate of Keynes versus Friedman.
In my opinion Keynesism has a better economic grounding than Freidmanism. This is becasue Freidmanism, whilst an interesting theory has an inherent flaw, that can be seen in the 2009-11 recession and it’s causes. Freidman argued that an entirely competitive and privatised system (i.e. NO governement spending at all where possible) would self-regulate through consumer choice. It failed to take into account corporate greed, purchasing power and monopolism. As western nation adopted Freidmanism, the financial sector lost key government regulation. Through this lack of regulation, the banks were allowed to lend irresponsibly with sub-prime mortgages and loans, eventually seizing up to minimise the astronomical financial risks they’d created, leading to the credit crunch, and a collapse in consumer spending and confidence, which lead to the current economic climate.
In other words, I support redistribution of wealth, because the alternative is a clusterfuck.
First, some entertainment: https://www.youtube.com/watch?v=GTQnarzmTOc
The theory is that people will become weary of putting their money in a bank that is known for irresponsible lending, etc. (and losing their members’ money). And that’s if the bank even survives at all. Obviously banks aren’t going to even be ABLE to continue running irresponsibly. It doesn’t make financial sense.
That is unless you are bailed out, as in the Keynesian model. Because then there’s more incentive to to be irresponsible with the money. Because you get the short term satisfaction of irresponsible spending / loaning, etc. without the fear of long term repercussions. (and you saw what happened when the government tried to take over, rather than letting the market work itself out)
In the Friedman system, the banks would be forced to deal with the repercussions of their actions; they would be held accountable for the risks they take, at their expense, not the taxpayers’.
The reason we got into this mess in the first place is because the banks weren’t afraid of the repercussions. And even if there was a fluke mess up by a business such as a bank in a Friedman / Hayek model, yes, some people would lose a lot of money and it may even very negatively affect our economy–BUT it would change the public’s view of banks, as well as set a precedent example for other banks to be cautious of (that is, if they want customers ever again).
It’s quite fascinating how the free market is inherently regulated. The difference between the regulation between the free market and the government is that businesses are more intimate with what will make the people happy (their customers, and by extension themselves) than the government could ever be.
Also, this does a great job of explaining the myth that is monopolies: https://www.youtube.com/watch?v=pdNC_NpgM1s
E-Nelson: So, you’d rather sink into a very deep depression so that “the banks would be forced to deal with the repercussions of their actions” rather than bailing them out and softening the depression and getting them back on their feet and lending?
Also, the reason we got into this mess wasn’t because the banks weren’t afraid of repercussions…it’s because we removed regulations that stated THEY COULDN’T DO THAT.
Yes. I would rather we not subsidize failure in banking.
No bank in their right mind is going to want to put themselves out of business, no matter how enticing the short term irresponsibilities may be. And we mess that truth up when we keep them from failing.
That is just not what happens in practice. People keep their money in a bank even if they don’t like the bank, for various reasons. They never avoid to buy products from a company with bad habits.
If by irresponsibly you mean maximizing their profit even if society has to pay the price for it, yes, they will continue to do that. There has been a few crisis and banks didn’t change because of that.
So, you’d rather have people DIE on the streets hungry and people freezing to death in the cold because they can’t pay their heating bill, simply because you don’t want to ‘subsidize failure in banking’?
Also, if a bank fails, then those involved will just start a new bank or go into another industry. Do you generally check the names of people involved in problem businesses so that you can ensure that you don’t patronize other businesses in the future? Do you know if those involved in Enron are in any way connected to businesses you patronize?
Even if he “patronizes the right businesses”, he is not a representative of the world’s population in any way. People don’t give a shit for who they buy their stuff from, they just care about what they buy. If people helped to regulate the system, well, that could work, theoretically. Unfortunately, our world is not theoretical.
No, of course not. I want as few people to suffer through poverty as possible. But I know that the best way to accomplish this is to let markets work. No system on earth has a better reputation of getting people out of poverty.
And make no mistake, no system is perfect. Not mine, not anyone’s. But I feel, based on logical and empirical evidences that the system I advocate is the best for everyone.
Now, I will say that yes I was making my argument rhetorically. I don’t literally think we should have allowed ourselves to fall into a second great depression. But that’s ONLY because we need to transition out of our current system instead of switching cold turkey. We would have been in that situation with the banks if we had a truly free market (and have always had). We in fact would not have had even the great depression if it weren’t for governmental meddling. But you’re correct in a pragmatic sense that we now are forced to use some government aid in order to transition out as smoothly as possible.
Also I want to make note that no man can start a line of banks and continue to purposely do the same things to put them out of business and hope to make money. The only way this can happen is with government assistance.
I’m sorry to say this, but there has NEVER been a “free market” anywhere on the planet. Not in the United States, not anywhere. So, how can you say that it “has a better reputation of getting people out of poverty”?
Provide said “logical and empirical evidence”, please.
Sorry, but you need to research history more. The Great Depression happened because of a LACK of “government meddling” and the biggest amount of prosperity happened in the United States during a time when you would say that there was a HIGH amount of “government meddling”.
There’s a problem with your theory: You think every man is an island; that one man’s actions will NEVER affect another man. But that isn’t the case, even in a theoretical “free market” society. We all live in a giant apartment building and my neighbor’s actions WILL affect me; he smokes in bed, my apartment catches on fire. It’s just how it is.
To deny this is to deny basic human nature.
Now, how about telling me about the fact that, if a bank fails (after netting the guy many millions of dollars in bonuses and such), he’ll just go into another industry and rake in more money, sending more businesses into the crapper, and eventually destroying the economy. How do we stop that?
I’m of course referring to my first post wherein I pointed out that more socialistic leaning countries end up doing more poorly than freer markets. I acknowledge that there has never been a completely free market. Trust me, if there were a country on this earth today that operated under a pure free market, I’d get my butt over there asap.
Well the logical evidences are what I’ve been explaining in my posts in this thread. But if you are looking for statistical evidences then look into the Cato and Mises institutes’ research. They do great work.
https://www.youtube.com/watch?v=dgyQsIGLt_w
Yes, I’m in love with Milton Friedman. Sorry, haha.
And I don’t deny that people affect other people in nearly everything they do. But I don’t follow your logic. Sorry, it’s gliding over my head. What did I say that would indicate that I reject this notion?
I don’t see how one can make money through creating failing businesses. That seems counter-intuitive.
Also, I know you didn’t mention it but this also supports my point that we wouldn’t have been in the recent economic failure under a free market system. https://www.youtube.com/watch?v=A9hPs281iDI#t=6m40s
The very notion of individualism or the so-called “rugged individualist” or the “self-made man” flies in the face of what humanity is. You ask where you reject the notion that one person’s actions affect another person? Right here:
“Trust me, if there were a country on this earth today that operated under a pure free market, I’d get my butt over there asap. :-)”
You complain about government meddling, but we create government to protect ourselves from the bad portions of society, whether it’s bailing out failing businesses that, if allowed to fail, would utterly destroy the economy, to possibly breaking up businesses that grow too large (to the point of monopolizing an industry or getting to the point where, if they fail, they’ll take down a major portion of the economy), or just something as simple as law enforcement or contract-dispute resolution. A “free market” denies basic human nature.
As for making money through creating failing businesses, it happens all the time, whether it seems counter-intuitive or not. Look at how many failing businesses pay their executives handily in the form of stock options and bonuses, then the business goes under and the executives just go to another business where they’re on the board of directors or take their wealth of knowledge to another business who would be glad to have them help them and then that business begins to fail.
It’s called “failing upward” and can create economic devastation in its wake. Just look at the mortgage meltdown of just a few years ago for all the evidence you need. The mortgage meltdown was a result of the LACK of government meddling, not because of it.
EDIT: Let me ask you a quick question. In the apartment building analogy, your neighbor has a habit of smoking in bed. So far, nothing has come from it. However, tonight, he falls asleep with a lit cigarette in his hands and the drapes catch fire. Then the wall. Then the other wall. Then MY WALL, then my stuff, then the next neighbor over, and the next neighbor up and down.
What should be done with that person? What should’ve happened before this happened to stop that and protect my property? Don’t I have the right to protect myself and my property?
I’m sorry, but the Austrian School of Economics gives about as much evidence as, say, the Discovery Institute.
“Too big to fail” does, indeed, exist. You say that we should not put ourselves in dangerous situations…but then go on to say that we should not be allowed to make sure that the situation doesn’t get dangerous.
Once a business grows to a certain point, they have pull on the economy. For example, Microsoft. Many businesses rely on Microsoft to provide their computing needs (from workstations to spreadsheet programs, and so on). If Microsoft suddenly failed, the businesses that rely on Microsoft will fail, and the businesses that rely on those businesses begin to fail, creating a domino effect. (EDIT: And now, for example, I hear Microsoft just purchased Skype. If a business relied on Skype, now they rely on Microsoft and if Microsoft fails, they fail.)
Again, this is the Big Apartment Building Theory (that’s what I’m calling it). One person or business’ actions directly and indirectly affect others. One business fails, another business fails as a direct result of that. If a bank fails and doesn’t take anyone else down with it, I say, let them fail. But that’s not the real world. When a bank fails, it harms others. When the person smoking in bed catches his room on fire, my room catches on fire.
We have a right to protect ourselves and our property.
Well honestly I haven’t the time to look up statistical gatherings for an internet debate. So I ask that we concede this point to be superfluous for the sake of this argument. I don’t really want to invest that much of my time in it right now, sorry.
That may be true given the system we are living under. Also I was referring to individual responsibility, not government coercion. Also, lest you mention your disdain for the “individual” principle again, pointing out that you believe it goes against human nature, let me remind you of the theory of evolution and survival of the fittest which is basically exactly what a free market would emulate. Now of course your apartment building theory plays a role, and I get that–I’m not trying to dispute the effects others have on us–but just like survival of the fittest or the theory of evolution, if things are left untampered with then the best emerge through time. Not only do the best emerge, but they keep getting better.
Let me ask you, how did Microsoft become such a large company? Because they provide the market something that is obviously highly needed, better than the competition. For a company like Microsoft to fail, what would need to happen? Well, people would have to rapidly stop purchasing its products. Even if Microsoft suddenly lost all of its money in a freak hypothetical accident, they are still constantly selling products and services that keeps them well afloat. But if people stopped buying it at a rate so drastic that they failed, then only a small amount of people and businesses would still be reliant on Microsoft and potentially fail with it. It’s amazing how the market works like that.
I completely sympathize with the same societal ailments you do. I would hate to see this nation fall into a depression. But we are only making it worse with more disruption of the market. We are creating artificial value in market failures and destroying real value in market successes. When we pervert the market, the market doesn’t work. That’s effectively a tautology. So of course when the government reaches its hands into the market, the market is bound to fail.
Yes, we as individuals do have that right. But we as a government don’t have the right to coerce others into “being protected” against their will. Such is true with drugs, and mutually, economics.
Survival of the fittest doesn’t mean individualism. Who does better? The group of five or the single person? It’s not “disdain” but acknowledgement of the human animal. And you’re tottering very close to Social Darwinism (which is a complete bastardization and distortion of the theory of natural selection, so much so, that it’s almost unrecognizable as such).
You’re trying to introduce a hypothetical scenario in regards to Microsoft while ignoring the overarching problem and the need for government “meddling”: That business relies on other business to survive. And how did Microsoft get to where they are? By careful planning and usage of government, other businesses, AND THE PEOPLE to get where they are. If it weren’t for the people, other businesses, and the government, they wouldn’t be as large as they are today.
As to your claim that a government doesn’t have the right to coerce others into “being protected against their will”, I’m not saying that. I’m saying that I have a right to protect MY PROPERTY against OTHERS. When a big business fails, I SUFFER. I’m damaged. The business that relies on the business that relies on the business that relies on the business that failed hurts me when I rely on said business. If I have the right to protect myself and my property, then I’m going to ensure that others don’t hurt me or my property.
But you say that’s wrong.
All I’m saying is that if you tamper with species’ extinction rates by killing off those growing in number and protecting those low in number, then survival of the fittest cannot properly take place. Can we agree that survival of the fittest produces good results? The same is true in the economy.
My friend, the entire Microsoft scenario began as a hypothetical when you introduced it. My point is that in a free market situation, it would be nearly impossible for a very successful business to instantly fail and spark a domino effect of failure in its wake. If a very successful business were to fail, it would fail somewhat slowly and would not be very successful by the time it failed, thus leaving few victims in the aftermath.
You say you have the right for you to protect yourself against others. This is true. But protecting yourself does not include forcing others to incur your losses or the business’. Let me be clear: I definitively agree that you have the personal right to protect yourself. I do not believe you have the right to others protecting you, especially against their will.