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The Forum > Article Comments > Beyond recovery > Comments

Beyond recovery : Comments

By Ray Cleary, published 16/6/2009

There has been little questioning as to whether we want to return to the conditions which created the global financial crisis.

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Wing, you keep misrepresenting my position - governments with “mystic super-competence”!! Where did that come from?

The point is that we elect governments to act on our behalf where that is appropriate, to do their best, and to be accountable to us. It seems that you would prefer unaccountable markets which are totally unfettered – a literal approach of laissez-faire.

I want markets to do what they do best, particularly exchanging goods and services efficiently with innovation and resolution of competing interests under the forces of supply and demand, but I expect governments to intervene where market behaviour threatens society, and we will hold governments accountable for the effectiveness of that intervention.

I am a little surprised that you reject the notion not only of better means of government regulation but of any form of regulation. As I said in my last post and to get back to the point of the article, I am no longer surprised that you are unable to see that the adverse impacts of the global economic crisis (particularly on the more vulnerable members of society) demand consideration of better means of government regulation. You simply do not accept any regulatory role for governments. I am unable to comprehend such a position.
Peter Johnstone
Posted by PJJ, Thursday, 18 June 2009 8:49:46 PM
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PJJ
The reason you are ‘unable to comprehend’ what I’m saying, is because you are thinking in circles.

It is not that I’m misrepresenting your position, it’s that you yourself don’t understand it.

According to you, what justifies government intervention is where market behaviour ‘threatens society’. But by definition, if government has intervened, it must be because market behaviour threatens society, right?

For example, a farmer can hire a private vet; and the government taxes him to provide a vet through the pastures protection board. So, in the absence of the PP board, was the vet ‘threatening society’? Or was the farmer?

My wife has a medical condition for which we can pay a private doctor, or we can use a government-paid doctor. Was the private doctor ‘threatening society’? Were we? How would one know?

Don't tell me, lemme guess: government will decide!

If the explanation of government is that we ‘elect them to act on our behalf’, what was government doing all those centuries before people had the vote?

Voting is compulsory. You can’t build any theory of consent on that.

Force or fraud are illegal in market transactions; but are the basis of government transactions. This is because all government action depends on taxation, which is a compulsory impost. In law, tax is not payment for a service. It entitles the payer to nothing.

Private businesses are liable in contract, fraud, criminal law, equity, state statute law, commonwealth statute law, and corporations law for lying. But you try suing a politician for breaking an electoral promise. The accountability you are talking about is a fiction.

Business are also accountable by profit and loss. Profit is the direct result of the behaviour of the mass of consumers in *voluntarily* preferring a particular good. It is a measure of the value *they consider* they received *over and above* what they already considered a fair exchange for the benefits they received. On the other hand, losses transfer the means of production from unsuccessful entrepreneurs to those who serve the masses with what *they* consider most urgent.
Posted by Wing Ah Ling, Wednesday, 24 June 2009 5:22:12 PM
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Now compare that with government. Has government ever sent you an account of how much they have (forcibly or fraudulently) taken by raiding your bank account; showing what benefits you have received, so you can get a true account? No.

If you don’t want a service, can you withhold payment? No.

If you don’t want to be forced to pay, perhaps to make unnecessary war, or to subsidise polluting the environment, or whatever – can you withhold payment? No.

In the market, if you don’t agree, you don’t pay and have total control over your contribution. In the government, you are herded like animals into compulsory support for power arrangements you don’t like.

You seem to think that the existence of the vulnerable has got nothing to do with government? Have you ever considered how much unemployment is caused by taxation, inflation, regulation, occupational licensing – not to benefit society, but to help politicians get their snouts in the trough of other people’s money, by themselves giving away other people’s money, to people who don’t own it, and didn’t earn it? Have you considered how much the position of the aged has been made worse by government taking 50 percent of everything they earned during their life?

Since government has a legal monopoly of both force and fraud, and since force and fraud are illegal in market transactions, you have not given any reason for your back-to-front presumption that it is peaceable human freedom, rather than a legal monopoly of crime, that is threatening society.
Posted by Wing Ah Ling, Wednesday, 24 June 2009 5:24:05 PM
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>> Wing Ah Ling asserts that government regulation must take the form of less, rather than more regulation. He thus seems to accept a place for government regulation while assuming that there is no room for more government regulation. Yet he claims to accept that serious analysis and consideration of a more effective role for government regulation is "a great idea". <<

Welcome to the conservative economic dichotomy. Since the GFC began, the Right has argued from an entirely false premise: that capitalism is synonymous with completely unrestricted markets, and anything short of that is de facto socialism.

Strangely, the notion that some marketeers might be dishonest is anathema to conservatives, so they regard any recognition of the criminality of share traders as an assault on the fundamental principles that liberal democracies are meant to enshrine.

Explaining why that's come to be would require an entire essay, if not a thesis, but it comes down to conservative politicians successfully conflating white-collar crime with individual freedom. That's why the the Right's argument always boils down to "if traders don't have the freedom to lie, cheat, and steal from us, thought-crime gulags are just around the corner".

They don't see the paranoia in this non-sequitur, which is why rational people of principle must insist on market reform.
Posted by Sancho, Wednesday, 24 June 2009 5:43:37 PM
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Sancho
Fraud is illegal in market transactions. Defending fraud is no more a part of the arguments for liberty than it is of the arguments for government. Thus your argument is a straw man.

In fact, since you can sue businesses but not politicians for breach of promise, it is the apologists for government who are defending legalising dishonesty with impunity.

Also since the whole point of fraud being wrong is that it’s a violation of property rights, and since government is completely dependent for its existence on the violation of property rights, why your inconsistency in the condemnation of such violations in some circumstances, and the approval of it in others?

Just because there’s a social problem, doesn’t automatically mean that the solution is more government; nor that it would be more ‘rational’, nor more ‘principled’. The dishonesty of some marketeers is no more an argument for more government intervention than is the dishonesty of some politicians. You are merely assuming what is in issue: arguing in a circle.

You have not shown any reason why a legal monopoly of force and fraud is likely to produce a better solution to an original problem of fraud; or anything else for that matter. Your reference to supposed ‘paranoia’ is mere personal argument: your third fallacy in 200 words. Not bad.

Either decisions on the best use of resources can be made by the owners of private property; or by the state. Whatever you call the latter alternative: socialism, fascism, communism, interventionism, statism, democratic socialism, social democracy, the third way etc. etc. is irrelevant. The whole point of these interventions is for the state to forcibly override individual freedom and private property in allocating resources to uses.

The same problem underlies all of them: those doing it have an endless interest in using legalised force or fraud to aggrandise their own wealth, power and prestige at the expense of everyone else.

You and PJJ have not still given any reason to think that government action will be less anti-social than the original social problem it is intended to solve.
Posted by Wing Ah Ling, Friday, 26 June 2009 11:24:18 AM
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>> You and PJJ have not still given any reason to think that government action will be less anti-social than the original social problem it is intended to solve. <<

Because in a democracy politicians are answerable to the entire populace, while share traders and banks answer only a handful of shareholders, most of whom are other corporations.

Our politicians keep raising their own pay, but none makes the mega-dollars of a merchant banker. Why? Because they're poor at graft? Or because the public will put them out of a job if they're that blatant?

I won't argue that politicians are any more honest than traders, but it's greed and corruption operating in an unregulated environment versus one in which there is constant scrutiny and the risk of sacking by popular opinion.

But don't take my Leftist word for it. Here's hyper-conservative commentator P.J. O'Rourke on Wall Street (http://www.weeklystandard.com/Content/Public/Articles/000/000/015/791jsebl.asp):

"A lot of lousy mortgages that would never be repaid were handed out to Jim Jerk and his drinking buddies and all the ex-wives and single mothers with whom Jim and his pals have littered the nation.

"Wall Street looked at the worthless paper and thought, "How can we make a buck off this?" The answer was to wrap it in a bow. Take a wide enough variety of lousy mortgages--some from the East, some from the West, some from the cities, some from the suburbs, some from shacks, some from McMansions--bundle them together and put pressure on the bond rating agencies to do fancy risk management math, and you get a "collateralized debt obligation" with a triple-A rating. Good as cash. Until it wasn't.

"Or, put another way, Wall Street was pulling the "room full of horse s--" trick. Brokerages were saying, "We're going to sell you a room full of horse s--. And with that much horse s--, you just know there's a pony in there somewhere.""

Are you arguing that that isn't fraud? And how many of those who engineered the GFC have been punished in any way? How many have even lost a cent?
Posted by Sancho, Friday, 26 June 2009 12:21:05 PM
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