Geoff makes valid points about the absurdity of neo-classical assumptions about “equilibrium”, perfect knowledge, perfect competition and so on.

But his critique of free markets, and his brutal mantra of government control, fails for the following reasons.

Firstly, using the words “mantra” and “brutal” doesn’t conclude or help your argument, does it, Geoff? Mantra implies irrationality, so unless you yourself can defend your argument against my proof of its irrationality, then it’s you who’s using a mantra. Brutal implies the use of aggressive force, but unless you’re going to explain where, short of actually shooting people, you renounce the violence of enforcing any policy you advocate, it’s you advocating brutality Geoff.

Secondly, all your argument means is that neo-classical assumptions are wrong. But that neither establishes your critique of individual liberty and unhampered markets, nor your assumptions in favour of government intervention.

All that needs to be established morally is that people prefer market transactions and that they're voluntary. And all that needs to be established pragmatically is that markets do more to allocate scarce resources to the most urgent and important social ends, as decided by society, than governments. That’s what you need to disprove, Geoff, not straw men from neo-classical theory.

Thirdly, it’s not good enough to say, if market transactions are to be overridden by government, it doesn’t mean turning to socialism. That’s exactly what it means, to the extent of the intervention.

Fourthly, you’re still going to need a theory to say how you know what interventions are justified and why? Why not full socialism? What *principle* limits government intervention Geoff?

Think of it this way. If everyone in the world wanted your computer, and nothing else, then the price of everything else would be zero, and the price of your computer would be astronomical. The fact that real world prices aren’t like this, is because in reality people don’t just want your computer. The array of prices we see is the result …

… of the evaluations of all seven billion people in the world, through their *voluntary* actions in buying or not buying, selling or not selling, everything. Thus the market is FAR FAR more representative of society and the social good than any government ever was or ever can be. Unless you are going to give reasons for your absurd assumption that a coercive territorial monopolist of aggressive force and threats – the State - is more representative of society, than society is of itself by its *consensual* co-operative transactions – it is you with the absurd irrational and brutal mantra Geoff.

Let’s look at some of Geoff’s criticism of markets
“dumping pollutants into the world”
Fails to distinguish private from public property, durr. By far the overwhelming problem with pollution is dumping to government property e.g rivers, or resources in which government prevents private property e.g oceans. In other words, the problem is just socialism’s usual tragedy of the commons.

“ under-paying suppliers and employees”

Under-paying *relative to what*?
Define the fair price for any given transaction.

“depleting natural resources too quickly”

How do you know what the correct rate is? The most aggressive party will decide. Brutal mantra.

The market rationally weighs future against present interests; the government can’t, simple as that.

“selling shoddy goods”

People have a right to buy whatever quality they want.

So far as the shoddiness is a result of fraud or deceptive conduct, that is illegal in market transactions, and nobody is arguing otherwise, so it’s not a straw-man criticism of markets.

But fraud is not illegal in government is it Geoff? The law against misleading and deceptive conduct only applies “in trade and commerce”, not “in politics and government”, so it’s an irrational mantra to assume government can or would do better.

“In other markets, inefficient or no-longer-desirable practices, like constructing energy-wasting buildings, continue even though it would be cheaper overall to update practices.”

Then why don’t you do it and reap the profits?

Geoff’s God-assumption is nonsense. Ignoring costs doesn’t make for a better theory of economics, it makes for a worse.

the game

http://www.infowars.com/stunning-hypocrisy-obama-slams-leaders-who-do-not-tolerate-dissent-from-their-own-people/

http://www.infowars.com/italian-riot-police-remove-helmets-join-anti-eu-protesters/

http://www.infowars.com/useful-idiots-2013/

http://www.infowars.com/google-wants-microphones-in-your-ceiling-microchips-in-your-head/

http://www.infowars.com/christians-are-being-burned-alive-beheaded-crucified-tortured-to-death-and-imprisoned-in-metal-shipping-containers/

were in..hell
we just havnt realized it yet

they want hell on earth..[cause who wants heaven..on earth]
you..just/havnt even/noticed..[bit/by/bit]..how they gradually..changed..even...your beliefs.

im..more interested..in this..
http://www.redflagnews.com/headlines/nytimes-unprecedented-concentration-of-sea-creatures-near-shore-in-california-experts-baffled-longtime-residents-astounded-video#sthash.tpnBVDof.dpbs

or this
http://articles.timesofindia.indiatimes.com/2013-11-30/science/44595591_1_humans-chimpanzees-traits

even/this
http://mentalmodels.princeton.edu/papers/2012negation.pdf

im over this
http://rinf.com/alt-news/editorials/mandela-eulogies-reinventing-his-disturbing-legacy/

or this
US government sells rest of its General Motors stock;
loses $10.5 billion on bailout[plus dividends]
http://www.blacklistednews.com/US_government_sells_rest_of_its_General_Motors_stock%3B_loses_%2410.5_billion_on_bailout/31026/0/38/38/Y/M.html

U.S. Treasury Secretary Jack Lew said Monday the government today had sold its final shares in the Detroit automaker, leaving taxpayers with a $10 billion loss on the $49.5 billion bailout. The move means GM is free of government pay restrictions and can again pay dividends on its common stock.

arnt you glad tony..isnt buying into the..gm scams?

or how about this?

Making a Killing with Cancer: A 124.6 Billion Dollar Industry
http://www.theorganicprepper.ca/making-a-killing-with-cancer-a-124-6-billion-dollar-industry-12092013

If you had a business selling something that made you well over a hundred billion dollars per year, would you take steps to eradicate the need for your business? Or would you make every effort for that money continue rolling in?

Take cancer, for example. Don't let all the media hype about "The Cure" fool you. No one who is in a position to do so wants to end cancer because they are all making a killing on the big business of treatment, while ordinary people go broke, suffer horribly, and die.

or this
http://www.redressonline.com/2013/12/the-meaning-of-peace-israeli-style/

but..maybe govts are waking up
http://www.redressonline.com/2013/12/britain-edges-towards-boycotting-israel/

or just the pope?
http://www.collective-evolution.com/2013/10/30/pope-francis-denotes-christianity-as-an-illness/

Whenever I see articles like this - and they are unfortunately plentiful - I know from the opening paragraph that they are written either by academics in their sheltered university workshops, or by public servants. Either way, by someone who has never actually come close to the activities associated with running a business.

We know that markets aren't perfect, Mr Davies. But taking those imperfections as the reason that markets should be rejected is as logical as saying that because Australia will not win the World Cup, we should abandon playing soccer. The game is not the problem.

I would also be willing to bet that if Mr Davies had written a piece like this in an area within his expertise, it would be laughed out of court by his peers. Here's a beauty:

"The evidence is also clear that free markets have not worked as well as managed markets."

Sez who? Especially when the follow-up is:

"Though there is no basis for letting markets fun [sic] unfettered, we don't have to turn to socialism."

What regime, does he suggest, would be able to control the markets as he wishes? The most recent examples of command-and-control have all been socialist. Does he perhaps recommend dictatorship as a benevolent alternative?

No, of course he doesn't. Instead,

"All we have to do is turn a critical eye on our markets. If a market is producing undesirable results, we can adjust the incentives"

And who exactly makes the judgment on "undesirable results". Undesirable to whom? The government in power, perhaps, making politically-driven decision on what to support and what to reject on the basis of their "electoral mandate"?

Oh.

That sounds very familiar.

The free market is “brutal ideology”?

“The evidence is also clear that free markets have not worked as well as managed markets.”?

And the free market is a “theory”. No it’s not! It is a system to increase wealth for every one lucky to live with such an economy; it is the only type of economy that works.

The GFC mentioned was not a result of free markets: it was a result of a socialist US president trying to ‘manage’ the economy by insisting that people who clearly could not repay mortgages were given mortgages. That’s your ‘managed’ economy for you.

As for “reasonably efficiency”, the market efficiently controls itself, when left alone. The author’s ‘efficiency’ comes from a mind totally remote from the real world.

Like all academics, Geoff Davies should stick to what he knows best – and what he knows best is certainly not the real world.

The free market is not perfect, but that is mostly due to the fiddling and interference – or management as Geoff calls it – by the elites who control our good for nothing politicians. None of these people understand the business cycle.

Pericles, Jardine - I am not "rejecting" markets, as should be evident from the article. Too people many jump to the false dichotomy - either "free" markets or no markets (socialism). There is a whole world of options between those extremes. Options, I would argue, that actually maximise personal liberty (short of living alone in the wilderness).

If anyone is interested in getting a clearer idea of what I'm on about, you can read my new ebook - see http://sacktheeconomists.com. You can even download it FREE until 7 pm Thurs (AEDT).