Is taxation theft?
December 6, 2016 at 2:13 pm #8689
Is taxation theft? …Do bears shit in the woods? Here, we address and expose virtually all of the arguments that taxation ISN’T theft, so you don’t have to. Got statist friends and family? Send this Flagship Freedom video there way to prove them wrong once and for all.
March 5, 2017 at 7:49 am #9955
Taxation isn’t theft, taxation is RENT.
When you occupy a property, you pay RENT to your landlord. That covers the provision of services and the right to use the property. Most landlords also have rules about what you can and cannot do to the property as well – rights of usufruct.
If you don’t like the rent level or the property, you can move to another property and landlord.
Just like if you don’t like a particular business’ goods, services or offerings, you can move to another one.
And so I think people who want to bang on about theft are “barking up the wrong tree” to put it simply.
Their efforts would be better focused on making sure that people could easily move between jurisdictions and countries so that they had a genuine choice (Tiebout Choice, Economics) about the taxation/public service provision tradeoff.
This means things like allowing foreigners to work in other countries indefinetely and removing taxes like stamp duties and replacing them with things like land value taxation.
March 15, 2017 at 11:36 pm #10089
The state can’t own property since it is a non-entity. Also it has not mixed its labor with the land or anything else to homestead it.It hasn’t traded with anyone to own something else either. Its only source of ownership is theft.
Are you claiming that the state owns every bit of land? Can individuals not own any property, but instead the state allows us to rent it from them? This is where your argument leads us. How can we make sure people can easily move between jurisdictions to get a genuine choice if the state (who also owns the land in question) has the say in who moves from one jurisdiction to another? This entire premise is built on a non-entity have sentience. Don’t make the argument that we are the state either. This means you are keeping me from moving easier from one jurisdiction to another, which is absurd. Or even more absurd, that I am keeping myself from moving from one jurisdiction to another and therefore I choose this level of taxation of my own free will just as the Jews shoveled themselves into ovens during the Holocaust since they were the state too.
Taxation is theft.
March 15, 2017 at 12:08 pm #10085
I think there has to be a certain degree of taxation– for a minimal system of support. But, taxation is basically theft in that it is my earnings and it is simply taken from me and used for “what’s good for me.” Can anyone but the government do such a thing without being prosecuted?
March 15, 2017 at 11:40 pm #10090
There doesn’t have to be a minimal system of support and therefore there is no need for taxation. What support mechanism is needed so badly the free market can’t provide it voluntarily?
Taxation is theft.
Also, read The Ethics of Liberty by Murray Rothbard.
March 15, 2017 at 12:51 pm #10086
March 19, 2017 at 11:03 am #10105
I’ve never understood how “taxation is theft” could be considered anything other than a useful rhetorical device. Merriam-Webster’s definition of theft:
a : the act of stealing; specifically : the felonious taking and removing of personal property with intent to deprive the rightful owner of it
b : an unlawful taking (as by embezzlement or burglary) of property
And the definition of stealing:
a : to take or appropriate without right or leave and with intent to keep or make use of wrongfully “stole a car”
b : to take away by force or unjust means “they’ve stolen our liberty”
The distinction between theft and stealing should be obvious here: for the act of stealing to be considered theft, it has to be unlawful or illegal. And taxation doesn’t come close to meeting this standard. So as far as the common definition of theft is concerned, taxation is unequivocally not theft.
Is taxation stealing? Perhaps. But I think it is still debatable here. For an act to be considered stealing, there would have to be an intent to deprive the owner. Yet taxation is not done with the intent to deprive the owner, but to render particular services in return (at least ostensibly). Notice that whether the government is superior or inferior to a free market in providing that service is irrelevant in determining if taxation is stealing.
The key element here is intent, which can’t be perceived perfectly. So there’s room for debate here. However, I think most everyday folks (non-libertarians and even some libertarians like me) view the prima facie intent of taxation as benevolent (even if mistaken). So it would still be difficult to argue that taxation meets the less stringent definition of stealing.
March 21, 2017 at 6:32 pm #10149
Let’s stop playing games. Everyone read this book. It’s the Ethics of Liberty by Murray Rothbard. Thanks.
March 21, 2017 at 6:23 pm #10148
Let’s apply your standards to you and your non-government-neighbor.
He stops off at your home when you are not there and takes your safe that has $5,000 in it. This is the same $5,000 you’ve been saving to go on vacation in June. He knows this because you’ve discussed it with him and some other neighbors at the neighborhood BBQ. He gets the safe to his house, breaks into it, gets the cash out, and goes to buy a fountain that delivered and set up costs $10,000. He gets the fountain delivered the same day to the boundary of his and your property. Half of the fountain sits on his property and half on your property. The fountain is done being set up and begins flowing bringing beauty and joy to the neighborhood. When asked, your neighbor explains he intended to take it only to help you and the neighborhood.
He has fulfilled the standards you have required and therefore could not be required to pay it back to you as theft (or stealing) anymore than the state should be.
This is of course ludicrous.
Your listed definitions don’t change the fact that the state has no right to take from us for any reason ever – outside of a voluntary gift freely given.
There are some other issues with your argument, but this is the most glaring.
March 21, 2017 at 10:37 pm #10150
Why do you think this is ludicrous? Your example does not deal with the definition of theft, so I’m assuming you are acquiescing on that point?
As I already mentioned, I do think that whether taxation is stealing is debatable. So I am not arguing here that taxation is unequivocally not stealing. However, what your hypothetical leaves unsaid is whether the owner of the safe consents to this use of his funds. If he does, then it seems clear that this does not meet the definition of stealing. If he does not, then perhaps it does.
So perhaps we can call taxation stealing in relation to those who do not consent, and not stealing in relation to those who DO consent.
You also mention the state’s right (or lack thereof) to tax, so I think we should clarify that we are not discussing rights or political philosophy here, but semantics. The OP asks “is taxation theft?” It does NOT ask “what right or justification does a state have to tax?” Now maybe he meant the latter, but the context seems to indicate the former was meant. If so, getting into the alleged justifications for and against taxation would be superfluous.
March 25, 2017 at 1:36 am #10214
Then semantics aside, the only way we can be sure someone consents to their property being taken and used for purposes they have no control over (implicitly or explicitly) is when there is an alternative to the seizure of their property other than aggressive violence and force (including the threat thereof).
If there is no other option, it becomes difficult to know whether the person supposedly consenting isn’t actually just trying to gain favor from their overlords for future favor in kind. The individual knows the only other alternative is the threat of force (and ultimately death). Why not get a better future situation for you and your family by being your overlord’s sycophant rather than the unlucky individual with your neck under his jackboot? The brown-noser at least knows he has a chance if he feigns support for the tyranny. He may even be lucky enough to someday be a future overlord.
If the choice is between the threat of death or payment of taxation, we have found ourselves in the same situation anyone else finds themselves in when a thief says, “your money or your life.”
This proves taxation is theft.
March 29, 2017 at 10:59 pm #10256
Why would an alternative be a necessary condition for determining consent? I know quite certainly that I myself would (and do) consent to taxes. And the vast majority of everyone else I know personally does as well. I have no reason to believe that these folks have some underlying motive for mass deception regarding their feelings on taxation.
On the contrary, I have quite good reasons to suspect these folks are, like me, forthright. But even if I didn’t and even if they weren’t, that wouldn’t change the fact that consent makes taxation something other than stealing or theft. Our knowing (or lack of knowing of) their consent is moot.
March 30, 2017 at 12:47 am #10257
If there is no alternative to chocolate, then can someone choose vanilla? If there is no alternative to walking to work, then can someone choose to drive their car?
We must have alternatives to be given a choice. If we are not given a choice we don’t openly consent to anything. It just happens.
If there is no alternative to the sun coming up on our day, then did we get a choice for night to remain on us? If we didn’t choose for night to remain on us (because we couldn’t choose) did we consent to the sun coming up? Or did it just happen? This demonstrates the law of opposition which allows choices to be made.
The moot question is whether or not we would have consented had we been given a choice.
Taxation is by definition mandatory and without choice. Your dictionary of choice, Merriam Webster defines taxation as
“the action of taxing; especially : the imposition of taxes.”
And tax is defined as
“a charge usually of money imposed by authority on persons or property for public purposes.”
And for good measure impose is defined as
“to establish or bring about as if by force.”
So it sounds like what you do when you pay money to the state isn’t pay your taxes, it’s a voluntary contribution to idiots in the hope of something better. That’s fine. You should be allowed to spend your money however you like. But you shouldn’t be allowed to vote the rest of us to do likewise by force, because taxation is theft.
March 30, 2017 at 8:29 pm #10274
We must have alternatives to be given a choice. If we are not given a choice we don’t openly consent to anything. It just happens.
Consent does not require choice. I’ll quote from Merriam-Webster again for the definition of consent:
: to give assent or approval : agree consent to being tested Her father consented to the marriage.
archaic : to be in concord in opinion or sentiment
I am perfectly able to give my consent to something that is forced upon me. It seems that you yourself clearly do not consent to taxation, and your frustrations are understandable. But that does not make taxation theft, at most it makes it stealing. And it would be stealing only for you, not for all the other folks who do in fact consent.
The moot question is whether or not we would have consented had we been given a choice.
On the contrary, the presence of choice is irrelevant to whether consent is given or not.
The rest of your post again seems to confuse semantics with justification. I’m not bothering to justify taxation (although I do think there are some good arguments to be made here), I’m merely demonstrating semantically that taxation is not theft.
April 14, 2017 at 3:08 pm #10486
I understand you don’t feel a choice needs to be offered to give consent. Although I disagree, you are not addressing this though by quoting the definition of consent. No where does the definition you have given mention choice one way or the other. Hello non sequitur.
Now I’d like to address your differentiation between theft and stealing. You quoted the definition of theft as,
“‘a : the act of stealing; specifically : the felonious taking and removing of personal property with intent to deprive the rightful owner of it
b : an unlawful taking (as by embezzlement or burglary) of property'”
And you quoted the definition of stealing as,
“‘a : to take or appropriate without right or leave and with intent to keep or make use of wrongfully
b : to take away by force or unjust means’”
You say, “for the act of stealing to be considered theft, it has to be unlawful or illegal. And taxation doesn’t come close to meeting this standard.”
Why not? It is unlawful according to natural law. This goes back to the debate about the state being legitimate at all. How can the state do something that no individual can do on their own? “By the consent of the majority of the governed” some might say? How can we vote into existence an authority we don’t have to give?
Moving on …
Theft (or thieving) and stealing are synonyms. You even admit this (may be possible) in your earlier post above. You go on to say, “taxation is not done with the intent to deprive the owner, but to render particular services in return (at least ostensibly).”
Taxation is done with the intent to deprive the owner so that the government will ostensibly (well worded, because it is only the appearance of rendering services that matters to the state) render particular services for that which was taken from the rightful owner. That’s the whole point of taking it. Where are you getting the idea that taxation is something else after saying this is the purpose of taxation. Is it done with the intent to deprive the owner of their property?
This goes back to the argument of the scenario of
a stranger who pulls his gun on you and says, “your money or your life!” Then tells you, “I need this to keep you safe.” Then with the money he deprived you of, he buys a large cage and invites (again at the point of his gun) you in promising to feed you well (again with the money he took from you). Safe you will be. Free you won’t be. Is that not considered theft by you? If it is, how is it different from taxation? He followed all your rules save the following arbitrary manmade laws made in some geographic area. So what if this same scenario happens in a lawless or stateless land? Would it then be OK? You’ve got to be understanding the silliness you find yourself in at this point.
And, yes, I have a hard time not addressing the fact that someone who seems to be as educated as you (and even finds himself on this site) can believe the state has a right to do something as heinous as taxation to the rest of us simply because you are OK with it. That’s difficult to ignore as we try to focus on semantics.
April 19, 2017 at 1:04 am #10529
April 19, 2017 at 11:16 am #10540
April 20, 2017 at 4:27 am #10554
Dr. Ugl, taxation is compulsory because of the free-rider problem…
But, and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really has, etc. – Paul Samuelson, The Pure Theory of Public Expenditure
You said that the Zero Hedge article is a good one. I take this to mean that you enjoyed it. You derived some benefit from the article.
How much benefit did you derive from the article? You’re the only person in the world who knows the correct answer. You’re the only person in the world who can know the correct answer. Because nobody is a mind-reader.
Let’s say that you know for a fact that the answer you gave would be exactly how much money that you would be required to spend on the article. So if you answered $20 dollars then this is exactly how much money you’d be required to spend on the article. Of course you would prefer to spend less, rather than more, money on the article. This means that you would have a really strong incentive to provide an answer that was less than the true answer. In other words, you’d have a strong incentive to lie. You’d have a strong incentive to misinform the producer of the article. You’d have a strong incentive to mislead the producer.
This is the real justification for compulsory taxation. This is why it’s so counterproductive when you go around arguing that taxation is theft. Whether or not taxation is theft has absolutely no bearing on the accuracy of market signals. I can agree that taxation is theft but this doesn’t make the signals any more accurate. Burying my head in the sand doesn’t change reality. It doesn’t eliminate the serious problems with consumers misinforming producers.
So Samuelson’s point about false signals was legitimate. But then in his paper he goes on to assume that the government IS a mind-reader.
Rothbard, to his great credit, correctly appreciated the incredible stupidity of assuming that the government can correctly guess how much you value things. Rothbard understood that this incredibly stupid assumption is the fundamental problem with government. His solution was of course to abolish the government. Doing so would get rid of the false signals of government but still leave us with the false market signals. And maybe this would be a net improvement in the accuracy of signals.
From my perspective a far better solution would be to simply give taxpayers the option to choose where their taxes go (pragmatarianism). Since people are paying taxes anyways, there’s absolutely no incentive to give false signals. If Netflix gave subscribers the option to spend their fees on their favorite content… then it would be pointless to pretend that you enjoy documentaries less than you really do.
The fact is that Netflix does not give subscribers the option to choose where their fees go. Subscribers don’t even want this option. This has absolutely nothing to do with taxation being theft and everything to do with people really not understanding what markets are good for.
April 27, 2017 at 12:03 pm #10617
Free-riders are not the problem. Compulsion is the problem. Why is it OK for anyone to force you to your knees and cut your head off, just for breaking an arbitrary rule imposed on you against your desires that does not address an aggressive act? The state enforcement of their arbitrary rules with a monopoly of violence is wrong. Why can’t there be many competing businesses of rights enforcement or defense?
To address your concern of free-riders I would say, let them have a free ride or charge them as they use the services they desire to take advantage of. There is no ethical middle ground. State compulsion is slavery. It is not ethical to enslave others regardless of their desire to have a free ride or not. I want to make sure we’ve established the fact that compulsion is slavery. The level or amount of compulsion just designates the level or amount of slavery.
There are very few things the government has done that would have free-riders and even those few things where free-riders would be seen as a problem are not problems at all.
What about roads? Nope. Roads should be seen as property and could easily be built to allow only paying drivers/walkers on them, but most businesses who own the roads in front of their business will welcome anyone to walk by at the possibility of a potential consumer.
What about military defense? Nope. Large businesses who have trained private mercenary groups to stand by for protective services will not care about those who free-ride because, again, these are potential customers of their business and they are happy to protect almost everyone knowing they may become a potential customer.
Businesses have a self interest to provide value to customers and potential customers. Even if their customers may never pay directly for some of those extra values offered. Instead businesses are trying to get customers to pay for their products or services offered. So, free-riders: not an issue.
Simply put Samuelson is wrong about consumers misleading producers/sellers. It’s apparent he hasn’t ever traded at an open market in Asia. As the buyer, you can whittle down the seller of the item you have high interest in until you find yourself at the price that is considerably lower than what the seller was initially hoping to sell it at. But the seller won’t sell it to you below the lowest point he is willing to sell it at. He can always say, “no thanks,” and the buyer would have to either go up in price (if they’re interested in the item(s) enough to pay more) or he would have to move on to find a similar item at a better price elsewhere (or go without altogether – which means the buyer didn’t really want to be a buyer).
If Samuelson is addressing free-riders, he doesn’t need to, as we already have above. It’s not a real issue.
Your solution of allowing taxpayers to choose where the they taxes they pay goes has a couple of the pros we find in the market. In the market, consumers find what they want at a price they are willing to pay for it and they pay for it satisfying their desire. In your tax-paid based market, tax payers may not want defense, postal services, roads, judges, etc., at all. If they do want those things, they may not want them done the way the state provides them. So the further benefits of the market are lost. The defense provider, postal services, road builder, judges, etc., have less motivation to provide the product or services at a lower cost or a higher quality as they do not have as much competition for each dollar. If all state services are low quality and they collude with each other (which is easy since it’s equivalent to one company) to offer low or mediocre quality products and services, then there is little motivation to improve.
There are too many benefits of the market lost in your system.
April 27, 2017 at 1:05 pm #10618
Dr Ugl, you perceive that the market has many benefits. Let’s say that we created a market in the public sector by allowing taxpayers to choose where their taxes go. Taxpayers would determine the IRS’s revenue.
You say that free-riders are not the problem. But would the millions and millions of taxpayers also say that free-riders are not the problem?
A. Yes. Then you should really want to create a market in the public sector.
B. No. Then should I trust your facts or should I trust all the facts that taxpayers collectively have?
You don’t have a lot of options here.
Would the market in the public sector correctly determine the IRS’s revenue?
If your answer is yes, then you should want to create a market in the public sector. If your answer is no, then you should not want a market to be in the private sector.
The fact is that you don’t have all the facts about whether free-riders are a problem…
The problem is thus in no way solved if we can show that all the facts, if they were known to a single mind (as we hypothetically assume them to be given to the observing economist), would uniquely determine the solution; instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge. To assume all the knowledge to be given to a single mind in the same manner in which we assume it to be given to us as the explaining economists is to assume the problem away and to disregard everything that is important and significant in the real world. – Friedrich Hayek, The Use Of Knowledge In Society
The problem is correctly determining the IRS’s revenue. The correct solution to this problem can’t be determined solely by you, or solely by me, or solely by the president, or solely by congress. The correct solution can only be determined by allowing each and every taxpayer to decide for themselves, with their own tax dollars…
A. the size of the free-rider problem
B. how effectively the IRS is solving this problem
This process is the only way to determine the correct solution.
You wouldn’t have to agree with the solution determined by all the taxpayers. You wouldn’t have to agree with the amount of funding that the IRS received. But you should definitely respect the answer that was provided by the market. If you would feel comfortable overriding or overruling this answer… if you would be happy to replace the market’s answer with your own answer… if you would prefer to solely rely on your own facts and knowledge… then in way, shape, or form do you truly understand the benefit of markets.
June 7, 2017 at 12:10 am #10990
Sorry it me so long to get back to you. It’s been a crazy time for me.
Yes, there are many benefits to the free market. I believe we need to define a free market. This definition is not short, so bear with me through this.
“The Free market is a summary term for an array of exchanges that take place in society. Each The Free market is a summary term for an array of exchanges that take place in society. Each exchange is undertaken as a voluntary agreement between two people or between groups of people represented by agents. These two individuals (or agents) exchange two economic goods, either tangible commodities or nontangible services. Thus, when I buy a newspaper from a news dealer for fifty cents, the news dealer and I exchange two commodities: I give up fifty cents, and the news dealer gives up the newspaper. Or if I work for a corporation, I exchange my labor services, in a mutually agreed way, for a monetary salary; here the corporation is represented by a manager (an agent) with the authority to hire.
Both parties undertake the exchange because each expects to gain from it. Also, each will repeat the exchange next time (or refuse to) because his expectation has proved correct (or incorrect) in the recent past. Trade, or exchange, is engaged in precisely because both parties benefit; if they did not expect to gain, they would not agree to the exchange.
This simple reasoning refutes the argument against free trade typical of the “mercantilist” period of sixteenth- to eighteenth-century Europe, and classically expounded by the famed sixteenth-century French essayist Montaigne. The mercantilists argued that in any trade, one party can benefit only at the expense of the other, that in every transaction there is a winner and a loser, an “exploiter” and an “exploited.” We can immediately see the fallacy in this still-popular viewpoint: the willingness and even eagerness to trade means that both parties benefit. In modern game-theory jargon, trade is a win-win situation, a “positive-sum” rather than a “zero-sum” or “negative-sum” game.
How can both parties benefit from an exchange? Each one values the two goods or services differently, and these differences set the scene for an exchange. I, for example, am walking along with money in my pocket but no newspaper; the news dealer, on the other hand, has plenty of newspapers but is anxious to acquire money. And so, finding each other, we strike a deal.
Two factors determine the terms of any agreement: how much each participant values each good in question, and each participant’s bargaining skills. How many cents will exchange for one newspaper, or how many Mickey Mantle baseball cards will swap for a Babe Ruth, depends on all the participants in the newspaper market or the baseball card market — on how much each one values the cards as compared to the other goods he could buy. These terms of exchange, called “prices” (of newspapers in terms of money, or of Babe Ruth cards in terms of Mickey Mantles), are ultimately determined by how many newspapers, or baseball cards, are available on the market in relation to how favorably buyers evaluate these goods. In shorthand, by the interaction of their supply with the demand for them.
Given the supply of a good, an increase in its value in the minds of the buyers will raise the demand for the good, more money will be bid for it, and its price will rise. The reverse occurs if the value, and therefore the demand, for the good falls. On the other hand, given the buyers’ evaluation, or demand, for a good, if the supply increases, each unit of supply — each baseball card or loaf of bread — will fall in value, and therefore, the price of the good will fall. The reverse occurs if the supply of the good decreases.
The market, then, is not simply an array, but a highly complex, interacting latticework of exchanges. In primitive societies, exchanges are all barter or direct exchange. Two people trade two directly useful goods, such as horses for cows or Mickey Mantles for Babe Ruths. But as a society develops, a step-by-step process of mutual benefit creates a situation in which one or two broadly useful and valuable commodities are chosen on the market as a medium of indirect exchange. This money-commodity, generally but not always gold or silver, is then demanded not only for its own sake, but even more to facilitate a re-exchange for another desired commodity. It is much easier to pay steelworkers not in steel bars, but in money, with which the workers can then buy whatever they desire. They are willing to accept money because they know from experience and insight that everyone else in the society will also accept that money in payment.
The modern, almost infinite latticework of exchanges, the market, is made possible by the use of money. Each person engages in specialization, or a division of labor, producing what he or she is best at. Production begins with natural resources, and then various forms of machines and capital goods, until finally, goods are sold to the consumer. At each stage of production from natural resource to consumer good, money is voluntarily exchanged for capital goods, labor services, and land resources. At each step of the way, terms of exchanges, or prices, are determined by the voluntary interactions of suppliers and demanders. This market is “free” because choices, at each step, are made freely and voluntarily.
The free market and the free price system make goods from around the world available to consumers. The free market also gives the largest possible scope to entrepreneurs, who risk capital to allocate resources so as to satisfy the future desires of the mass of consumers as efficiently as possible. Saving and investment can then develop capital goods and increase the productivity and wages of workers, thereby increasing their standard of living. The free competitive market also rewards and stimulates technological innovation that allows the innovator to get a head start in satisfying consumer wants in new and creative ways.
Not only is investment encouraged, but perhaps more important, the price system, and the profit-and-loss incentives of the market, guide capital investment and production into the proper paths. The intricate latticework can mesh and “clear” all markets so that there are no sudden, unforeseen, and inexplicable shortages and surpluses anywhere in the production system.
But exchanges are not necessarily free. Many are coerced. If a robber threatens you with “Your money or your life,” your payment to him is coerced and not voluntary, and he benefits at your expense. It is robbery, not free markets, that actually follows the mercantilist model: the robber benefits at the expense of the coerced. Exploitation occurs not in the free market, but where the coercer exploits his victim. In the long run, coercion is a negative-sum game that leads to reduced production, saving, and investment, a depleted stock of capital, and reduced productivity and living standards for all, perhaps even for the coercers themselves.
Government, in every society, is the only lawful system of coercion. Taxation is a coerced exchange, and the heavier the burden of taxation on production, the more likely it is that economic growth will falter and decline. Other forms of government coercion (e.g., price controls or restrictions that prevent new competitors from entering a market) hamper and cripple market exchanges, while others (prohibitions on deceptive practices, enforcement of contracts) can facilitate voluntary exchanges.”
Once you understand what the free market is and what it is not, you will see how a market cannot be created where the taxpayer has enough freedom to satisfy his own desires. Even though this is exactly what the free market allows him to work toward.
Who cares what millions and millions of taxpayers would say? Why does any other individual have any right to dictate what I believe I should do or actually do with my body, my labor, or the product of my labor (property)? If a group of ten individuals came and told you they felt you were freeriding and should pay George because they think his fulfilled need would be the good for society, would they have a right to force you to pay? No way!
The rest of your options are gobbledygook an nonsensical. You are using Hayek’s quote that tells us,
a government dictator (or a group of oligarchs, politicians, etc.) can’t control the economy on his (or their) own because the natural interactions of the market make the economy work in a healthy way,
incorrectly to say the least. Hayek would have laughed you to scorn or, at the least, been very upset to find his words used to rationalize such state control over individual action.
I believe every individual should be allowed to use their own resources toward any end they wish as long as it doesn’t keep others from doing the same with their resources (time being the only variable).
From the end of your answer, it sounds like you are confused about the true purpose of the state. The market you think I should want is tainted by the state’s involvement. Why would we need the state at all if folks decided they wanted their money to pay for a road or many roads, defense, courts, etc.? Minus the state, that’s a free market. The only difference is you think a majority of people counted out of an arbitrary number of people should be allowed to force others to do what the majority wants or thinks is right … and that’s (ironically) wrong.
I’d like to thank to BitButter (Tomasz Kaye) for the amazing videos.
June 7, 2017 at 1:38 am #10991
Dr Ugl, I’m guessing that you haven’t read either of these two papers…
These papers are far more relevant to the discussion than “What Is the Free Market?”
Rothbard correctly understood that the problem with government is the absence of individual valuation. It matters how much you value things. Why does it matter? Because scarcity.
Society’s wants: unlimited
Society’s resources: limited
Society’s limited resources have to be divided between society’s unlimited wants. In order for the division to be optimal (efficient) it’s necessary to know the actual and correct order (relative importance) of the wants. Therefore, it matters how much you value things. In a market, your valuations are revealed by how you divide your limited dollars among your unlimited desires.
Right now Netflix is in a market, but it is not a market. This means that you can decide how you divide your dollars between Netflix and clothes, but if you decide to allocate money to Netflix, you can’t decide how to divide your subscription dollars between nature documentaries and sci-fi shows. Your individual valuation is applied to Netflix as a whole, but not to its parts.
What difference does it make that Netflix is not a market? What difference does it make that around 100 million subscribers don’t have the opportunity to decide how to divide their limited subscription dollars among Netflix’s unlimited content?
With Netflix’s current system, the Visible Hand (VH), rather than the Invisible Hand (IH), decides how to divide 100 million people’s money.
A = The VH’s division
B = The IH’s division
C = The difference betweeen A and B
How significant is C?
Do you want to argue that it’s insignificant? If so, then you’re a socialist.
Do you want to argue that it’s very significant? If so, which division is more optimal… A or B? If you want to argue that A is more optimal…. then you’re a socialist.
If you agree that B would be far more optimal… then how do you explain the fact that you have never argued that Netflix should be a market? How do you explain the fact that so few people do argue that Netflix should be a market?
Just like Netflix, LearnLiberty.org is in a market, but it is not a market. You can decide how to divide your dollars between LearnLiberty and clothes, but if you decide to allocate money to LearnLiberty, you can’t decide how to divide your donated dollars between articles about Hayek and articles about Rothbard.
Just like Netflix and LearnLiberty, the government is in a market, but it is not a market. You can decide, by foot voting, how to divide your dollars between Canada’s gov and the US’s gov, but if you decide to allocate your money to the US gov, you can’t decide how to divide your tax dollars between national defense and space colonization.
If you understand why individual valuation is beneficial, then you understand why bundles are detrimental. The government is a big bundle of products, just like Netflix is a big bundle of products, just like LearnLiberty is a big bundle of products. The VH, rather than the IH, decides how dollars are divided between all the products in the bundles.
For sure Netflix and LearnLiberty aren’t nearly as big a bundle as the government is. Unbundling the government will be far more beneficial than unbundling Netflix or LearnLiberty. But unbundling the government is a lot harder than unbundling Netflix… and unbundling Netflix is a lot harder than unbundling LearnLiberty. If we successfully unbundle LearnLiberty, then larger and larger dominoes will far.
In summary, individual valuation is necessary to optimally (efficiently) divide society’s limited resources among its unlimited wants. The problem with the government is that it’s a huge space where individual valuation is prohibited. However, there are a gazillion smaller spaces that also prohibit individual valuation. If we successfully repair these smaller spaces, then it will set off a chain reaction that will repair the larger and larger spaces.
- This reply was modified 2 months, 2 weeks ago by Xerographica.
June 7, 2017 at 2:44 am #10993
Your know-it-all tone is coming across pretty thick. Unfortunately, you seem to be readily reading (which is great) and hardly understanding (which makes the reading worthless).
Rothbard and I both understand the subjective value of things in a world of scarce resources (although, I’m not so prideful to believe I understood as much or as well as he did). Yes, economics depends on understanding these important things. I’m still not sure how what I’ve said has gone against those truths, but … I guess you tell me in some round about way later on? … cuz your mentioning it makes no sense to me yet.
“Do you want to argue that it’s insignificant? If so, then you’re a socialist.” Not always. Maybe the person who made that argument is just ignorant. So there’s a missing point (or points) to make, otherwise you cannot logically make your deduction.
Then you say,
“If you agree that B would be far more optimal… then how do you explain the fact that you have never argued that Netflix should be a market? How do you explain the fact that so few people do argue that Netflix should be a market?” There are an infinite number of possible reasons for someone to not do something like “argue that Netflix should be a market.” Again, this is not a deduction you can make with any sense of coherence.
After this you say,
“You can decide, by foot voting, how to divide your dollars between Canada’s gove and the US’s gov, …” Again, maybe, but not everyone can afford a US passport (understanding this is a part of understanding the individual desires we all have differ causing subjective value for products and services – as you’ve already stated, and yet not applied here) and the travel expenses necessary to get from where they presently are to another geographic region with a different monopoly of violence (aka state). If they don’t want or have the money to pay for a passport, but have the money to travel; they may decide to pay the price of illegally crossing the border without the state’s permission to do so. This causes further risks to be placed on the individuals doing so. That risk is a cost incurred that some may not feel they can pay (based on their individual priorities of resource use). You assume too many things … again.
Your worst fallacy implementation is found later when you say,
“If we successfully repair these smaller spaces, then it will set off a chain reaction that will repair the larger and larger spaces.” OK, let’s think about this.
Are you saying that every time a domino falls that has another domino twice its size in existence the smaller, original domino will fall on the domino somewhere out there existing twice its size and cause it to fall? Does that sound inane to you too, or is it just me? Please don’t repeat that one again.
Once again, it repeats the same fallacies the other quotes I listed above use. These are examples of clear non sequitur and affirming to consequent.
You can’t say that Netflix’s big bundle will split apart with the smaller bundle of products (and services – I might add) of LearnLiberty.org’s splitting. How closely must these bundles within the market be positioned to tumble onto the other having any consequence whatsoever? Will they be sufficiently close once the bundles are split? You have some serious explaining to do … or you are welcome to concede these are all too far-fetched in their assumptions … cuz they are.
June 7, 2017 at 3:36 am #10994
Dr Ugl, I asked you a really straightforward question, but your answer was not at all straightforward. Either my question wasn’t adequately straightforward or you were being evasive. If you were being evasive, then attempting to clarify the question will be a waste of time. But I’ll give you the benefit of the doubt.
Right now Netflix is not a market. Netflix’s 100 million subscribers do not have the opportunity to decide how to divide their subscription dollars between nature documentaries and sci-fi shows. Instead, Netflix’s planners decide how to divide the subscribers’ dollars between nature documentaries and sci-fi shows.
A = the current division of subscription dollars as determined by the Visible Hand
B = the potential division of subscription dollars as determined by the Invisible Hand
C = the difference between A and B
Do you, Dr Ugl, think that C is insignificant? I want to know your answer. Is it yes… or no?
If you don’t understand the question, please let me know which part you don’t understand so that I can attempt to clarify it.
June 7, 2017 at 9:46 am #10995
No, I don’t think C is insignificant.
June 7, 2017 at 2:25 pm #10997
We both agree that C is significant. From my perspective, it’s very significant. Netflix can’t possibly divine how 100 million people would divide their limited subscription dollars among the unlimited content. Therefore, there’s a huge disparity between A and B.
If subscribers did have the opportunity to divide their limited subscription dollars among Netflix’s unlimited content, then Netflix would actually know the demand for specific content. This knowledge would allow it to far better serve the interests of its subscribers. Supplying far more relevant content would increase…
A. the number of subscribers
B. the amount of money subscribers are willing to pay
All of this economic logic is equally applicable to LearnLiberty (LL). LL doesn’t have subscribers, but it does have donors. Right now LL does not give donors the opportunity to divide their donated dollars among LL’s unlimited products (ie articles, videos). As a result, LL is largely ignorant of its donors’ priorities/preferences/interests. This ignorance could easily be eliminated by turning LL into a market. Supplying far more relevant content would increase…
A. the number of donors
B. the amount of money that donors are willing to donate
Earning more money would allow LL to compete resources (ie talent) away from similar organizations…
None of these organizations practice what they preach. They all preach the benefit of markets, but none of them is a market. But what happens when they all start losing resources to LL? What happens when they start suffering brain drain? What happens when they start losing financial support? How long does it take them to figure out that LL is winning because it’s a market? How many of them will go extinct because they fail to quickly adapt and adjust to the changing conditions? How many of them will be creatively destroyed by LL?
Personally, I don’t want any of them to be creatively destroyed. I want all of them to turn into markets. If they do so, then even though they will all be markets, each market will be somewhat different. Some of the markets will make it easier for consumers to trade with producers. Some of the markets will be more transparent, secure and responsive. With more markets, there’s more variation, and the competition between the different markets will facilitate and accelerate the evolution of markets. Beneficial traits will be quickly integrated and detrimental traits will be quickly discarded. Markets will become better in less time.
Right now LL is a dumb organism. It fails to fully utilize its community’s collective brainpower. This would change if it became a market. Once donors can participate in the prioritization process, all their brains essentially become networked together to create a super brain. The LL would transform from a dumb organism to an intelligent organism. It would more intelligently use its limited resources, which would empower it to compete resources away from dumber organisms.
If other pro-market organisms also became markets, then you’d have a population of smarter organisms that quickly became more intelligent. This population of smarter organisms would compete more and more resources away from populations of dumber organisms.
How long could anti-market organisms continue to exist? Take Jacobin for example. It’s very anti-market. So of course it’s not a market. Then again, neither is LL. So right now they are both dumb organisms. Both organisms fail to fully utilize all the brains that are available to them. But what happens when LL becomes a market?
Imagine that LL is a market while Jacobin is not a market. How significant will the difference between the two organisms be? How much more successful will LL be as a result of fully utilizing its community’s collective brainpower?
Matt Ridley has, or shared, the theory that trade is the reason that Homo sapiens were more successful than Neanderthals. It’s a pretty good theory. We would see this theory in action if LL became a market.
If understanding the power of markets was easy, then LL would already be a market. So would Netflix and the government. Every organization would fully utilize its community’s collective brainpower. Unfortunately, these organizations, and a gazillion others, are not markets. Understanding the power of markets is not easy. Adam Smith, Bastiat, Mises, Hayek, Rothbard, Friedman, Buchanan and many other economists all endeavored to explain why markets are so powerful. There’s more than enough explanation to justify turning LL into a market. Once LL proves how powerful a tool the market is, then markets will sell themselves.
- This reply was modified 2 months, 2 weeks ago by Xerographica.
- This reply was modified 2 months, 2 weeks ago by Xerographica.
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June 8, 2017 at 10:56 am #11007
You seem to think the selling of products and services can be done one way and one way only. This is against the nature of the free market. What you describe is not the one way to describe a market or even a business within that market. It is a very specific way of servicing customers. Customers still choose to pay money for those products and services or donate to the company that provides them regardless of what you see as a less than optimal way of servicing customers. If the customer chooses to donate or pay for those products or services, they can do it in a free market. Maybe you’ve never been to a buffet where there are many food and drink options and the customer pays a flat fee to take as many of those options as they like/can int he time they are on the property. This is similar to Netflix’s distribution of their products. The entrepreneur is tasked with coming up with a better way of serving the customers than their competitors. The buffet model is just one way for businesses to function.
Also, you need to understand, most folks won’t donate to an organization based on an on-demand type of service. So LearnLiberty.org won’t stay alive very long if they move to a donate for this article so folks can read it … now donate for this video so folks can watch it method. The customers they are trying to reach won’t care to donate any longer. The method of servicing the customers they are trying to attract is what makes a difference. If they want you to donate, they may need to change. Let me know if they do.
I understand the pay for specific articles, movies, etc., method of delivering services to customers is popular among Netflix subscribers, but they are worried that many movies and shows they have available will never be watched and no one will ever know how good they actually are if they ask customers to pay for them. There is the idea that it will also cost a lot more for those who watch a lot more movies and TV shows rather than spreading the cost voluntarily (<keyword) among those who purchase the monthly pass.
I’ve also heard customers say they don’t care if it cost a little bit more, as long as their bill remains the same every month. These customers desire consistency over a lower price. It means they pay a flat rate and will be allowed to who watch 5 videos one month and 80 then next.
The language you use is still leaning towards fallacious argumentation. You say,
“Netflix can’t possibly divine how 100 million people would divide their limited subscription dollars among the unlimited content.” But if there’s no way for Netflix to figure out which movies their customers would like to watch, how do you ever expect them to move to your definition of a market which means they will have to allow their customers to pay to play individual movies and TV shows? Again, your line of reasoning isn’t adding up.
My response to your saying Netflix can’t figure which movies their customers want to watch is, so what? If Netflix subscribers can email Netflix about getting other content (which they can), and Netflix can tell when certain content is popular or not and know to get more content like it or not (because it is getting watched right now); then we find ourselves in situation where customers are happy to continue to pay the fee they have been paying. If there was a better method of service for the same product, a competitor would have already taken Netflix’s customers.
This brings us back to our original discussion. The state has no competition to influence it to treat its customers to a better form of service as the private market does. Taxation, which forces folks to pay for something they either do not want and which keeps them from finding another provider to satisfy their actual desires, is theft because it is forced. This is true regardless of whether folks can choose to have their taxes pay for one thing or another.
There is one huge reason why allowing taxpayers to choose what their tax funds paid for wouldn’t work. Why wouldn’t I choose to pay my personal company (which I just created specifically for this reason) to receive the funds I pay in taxes for whatever service I offered, like say, paying for products and services specifically for me. Sign me up!
Sounds like your insults of so many companies because they don’t serve customers the way you think is best (and yet they remain in business and many times are doing well) is unfounded and from a lack of real business experience yourself. Your reading hasn’t been applied to life yet in a way that holds up or you haven’t yet figured out what the author was trying to say.
You haven’t addressed my concerns with the seriously false arguments from your past post. Please do. If you’ve rewritten your former post with the most recent, fine, but, otherwise, I’d like those to be addressed.
June 8, 2017 at 1:31 pm #11012
You’re arguing against the iTunes or Blendle model… but I am arguing for the pragmatarian model. Here’s an example of the pragmatarian model… Classtopia. On the homepage you see a list of entries sorted by the hand of time (chronologically). But on this page you see a list of entries sorted by the Invisible Hand (IH). Right now the IH is pretty small. It consists of the students, their teacher and myself.
Classtopia and LearnLiberty (LL) both have multiple people producing digital goods. Both organizations freely share their digital goods with the world. Both organizations have donors. The main difference is that LL decides how its donors’ dollars are divided among the products. Classtopia, on the other hand, gives its donors the opportunity to decide for themselves how to divide their own dollars among the products.
Classtopia is a market, LL is not. What difference does this difference make? What difference does it make whether or not donors can decide for themselves how their dollars are divided among the products?
Personally, I don’t randomly spend my dollars. Do you? Of course not. Nobody in their right mind randomly spends their dollars. People sacrifice lots of their limited time on this planet working in order to earn money that they can spend on relevant, rather than random, things.
This means that when people decide to spend their money on something, their decision is supported by all the information that’s available to them. People make informed spending decisions. Some people make more informed spending decisions than other people. But everybody in their right mind makes informed spending decisions.
Let’s say that you have $100 dollars to divide between these organizations…
Are you going to randomly divide your money between these organizations? Of course not. Are you going to equally divide your money between these organizations? Of course not. You’re going to efficiently divide your money between these organizations. How you divide your money will reflect all the information that you have and any additional information that you acquire. The more, and better, informed your decision, the more optimal your division.
But what if I divide your $100 dollars for you? Do you tell me exactly how you want me to divide your dollars? If so, then my division of your dollars will reflect and incorporate all the information at your disposal. But then what’s the point of me spending your money for you? You might as well spend it yourself.
If I divide your $100 dollars for you, and you can’t tell me exactly how you want your dollars to be divided, then, unless I’m a mind-reader, the division will not reflect or incorporate all the information at your disposal.
To disregard one person’s information is one thing. To disregard nearly everybody’s information is another thing.
Now, you have it in your mind that 100 million Netflix subscribers can simply tell Netflix what their preferences are. There’s nothing inherently wrong with this. Just like there was nothing inherently wrong with millions of voters telling the government that they preferred prohibition. The problem occurred when the government decided how much money to spend on prohibition.
A = society’s valuation of prohibition
B = the amount of money spent on prohibition
C = the difference between A and B
If you want to argue that C is insignificant, then you must believe that shopping is a massive waste of everybody’s time and energy. You should want the Invisible Hand (IH) to be entirely replaced by a combination of the Democratic Hand (DH) and the Visible Hand (VH).
If you want to argue that C is significant, but B is more socially beneficial than A, then you must believe that not only is shopping a massive waste of everybody’s time and energy, but that the IH’s division of resources is less socially beneficial than the DH+VH’s division.
So there’s nothing inherently wrong with millions of Netflix subscribers simply telling Netflix that they want chick flicks. The problem is when Netflix decides how much money to spend on chick flicks. Even if the money Netflix decides to spend magically appears out of thin air, spending it on chick flicks will logically allow chick flicks to compete limited resources (ie writers, actors, directions) away from action movies, nature documentaries, sci-fi shows and so on. But just because somebody says that they want more chick flicks, doesn’t necessarily mean that they want less nature documentaries.
If Netflix subscribers could decide for themselves how they divided their limited subscription dollars between chick flicks and the alternatives then, and only then, could they make rational choices that reflected all their available information.
Markets allow more people to participate in the prioritization process. This is why they utilize far more information than not-markets.
“The state has no competition to influence it to treat its customers to a better form of service as the private market does.”
The world has plenty of countries, and citizens can move, so there certainly is competition for citizens. Countries that do a superior job of serving citizens compete them away from countries that do an inferior job. Inferior countries suffer from brain drain while superior countries enjoy brain gain.
However, I’ll certainly admit that leaving the US for China isn’t nearly as easy as leaving Netflix for Hulu. If it was, then governments would improve at a much faster rate. So countries don’t face nearly as much competition as companies.
Your solution is to eliminate the government. You believe that you can help topple the government by opening people’s eyes to the immorality of coercion/theft. Except, all the time that you spend trying to persuade people that the government is evil is time that you can’t spend trying to persuade people that markets are wonderful. From my perspective, the opportunity cost is way too high. Markets are wonderful and everybody should understand why they are wonderful.
It’s clear that you don’t understand why markets are wonderful. You see absolutely nothing wrong with the fact that LL and Netflix are not markets. So here I am endeavoring to persuade you that it is a problem that they aren’t markets. If I can successfully persuade you, and we can successfully persuade others, then more and more people will see the problem with LL, Netflix and the government not being markets.
The government prosecuted Bill Gates because he bundled his operating system and browser. The ultimate irony and hypocrisy is that Gates’ own tax dollars paid for a bundle that included his own prosecution. Unfortunately, Gates didn’t point out the blatant double standard. He didn’t explain that if consumers would truly benefit from unbundling his operating system and browser, then they would benefit even more by the government unbundling justice, defense, public healthcare, education, environmental protection, space exploration, infrastructure and so on.
If the government had been unbundled, then it wouldn’t have been hypocritical for it to prosecute Gates for bundling his operating system and browser. And Gates obviously wouldn’t have allocated any of his tax dollars to his own prosecution. He wouldn’t have paid the government to kick him in the balls. And pacifists wouldn’t pay the government to kick them in the balls. And anarcho-capitalists wouldn’t pay the government to kick them in the balls.
Right now there are many organizations like Jacobin that are kicking us in the balls. They attack markets and consumer choice. But because Jacobin is in a market, we don’t have to pay them to kick us in the balls.
LL doesn’t kick us in the balls. But this doesn’t mean that all their products are equally beneficial. Some of their products are more relevant/beneficial/valuable than other of their products. But because LL isn’t a market, we can’t use our donated dollars to signal how relevant a product is to our reality. We can’t use our money to inform LL how closely a product matches our preferences. Without this information, LL can’t possibly optimally divide its limited resources. Nobody benefits from the suboptimal division of resources. No product should be outside the market. No product should be above the law of individual valuation. The IH, rather than the VH, should determine the importance/relevance/value of each and every product.
June 21, 2017 at 10:30 am #11121
Wow. This is getting out of hand. There just so much to address here that is flat out wrong or fallacious reasoning. I’ll try to be succinct.
You continue to muddy the waters with more points without address all of my rebuttals. This is going to take more time and eventually (assuming you continue to refuse to address points I’ve brought up) it will take more time than it is worth.
I’m not arguing against any model. Where are you getting this? I am for truly-free-markets rather than cookie-cutter business models that must be run a certain way in your to get your desired outcome. Let the entrepreneurs decide how they’d like to distribute their products and services. Why does this even come up as connected to taxation being theft? Your posts are beginning to smell like a red herring.
Who cares if you don’t randomly spend your dollars? The vast majority of consumers are the same. Subscribing to Netflix isn’t a random spending of money. They are getting a buffet of options to consumer after they have already paid a flat rate for their monthly use of the site. Consumers love this buffet model. Proof of this is found in Netflix’s success.
Netflix, learnliberty.org, and buffets are not places where consumers randomly spending their dollars and these are not examples of producers enforcing consumers’ desires. It’s totally different. The consumer knows (or trusts) the producer to provide a specific or specific kind of product or service and so is very willing to spend their money on what they expect to find. If they are disappointed, they can take it up with the producer and/or never go back to them. The invisible hand will draw them to the more desirable of those producers in the free market. I’ll ignore the rest of your commenting on this.
Your focus on the look at A, B, C; if you say this you must …” line of reasoning is complete malarkey. Stop making over-generalizations. Using false dichotomies is not a good way of convincing me. To save time and keep from doubling the efforts I’ve already expended, I will ignore them as well.
Maybe you’re right. Maybe the opportunity cost is way too high as I tell folks of the evils of the state rather than the greatness of the free market. I disagree, but value is subjective. Also, this post is a small part of my life spent building the market’s good name. The subject isn’t one of the many positive aspects of liberty and the free market like: Freedom From Taxation Is Wonderful! Instead it’s based on a negative aspect of the state (which are easy to find). I’m only focused on the subject at hand. This isn’t all I do.
It is clear you are poor at communicating and great at assuming you understand much.
Without trying to open up another can of worms before the other worms we’ve set free have been gathered, I’d like to ask you how any entrepreneur decides to start a business. What causes entrepreneurs to open a store on Etsy? What causes entrepreneurs to open a liquor store? What causes entrepreneurs to open a store on amazon? What causes entrepreneurs to open a store in the mall? They have no more idea thanNetflix about which movies to add to their collection, and, yet, businesses continue to be opened and find success. Have you ever considered this?
June 21, 2017 at 12:02 pm #11122
I’ll be even more succinct. Can socialism efficiently allocate resources?
June 21, 2017 at 12:21 pm #11123
No, I don’t think that socialism can efficiently allocate resources. But this is part of the problem with this conversation. Socialism isn’t something that could efficiently allocate resources. Socialism isn’t a thing that can do stuff. It’s a political and economic theory of organization based on the state owning the means of production.
The question you should have asked was,
Can the state efficiently allocate resources?
Can a system of socialism in place of a natural free market system efficiently allocate resources?
The answer is no, the state cannot efficiently allocate resources.
June 21, 2017 at 12:58 pm #11124
Another term for socialism is a command economy. The state is a command economy. The amount of money allocated to defense isn’t determined by individual valuation. It’s determined by government planners.
Right now Netflix obviously isn’t a market economy. The amount of money allocated to chick flicks isn’t determined by individual valuation. It’s determined by Netflix planners. Therefore, Netflix is a command economy.
You don’t think that command economies can efficiently allocate resources. Yet, you’re perfectly fine with Netflix being a command economy. Clearly you’re a few puzzle pieces short of a coherent economic picture.
My second favorite economist is James Buchanan. Today I read that Nancy MacLean wrote a book that attacks him. Should I buy her book? Answering this question is a matter of my individual valuation. I have the opportunity to help directly determine the social value of her product. If I buy her book, I essentially give everyone associated with the production of her book more money. Having more money would allow them to compete more resources away from other products/people/organizations.
Is individual valuation necessary for products? Of course it’s necessary. It’s the only way that we can efficiently allocate society’s limited resources. Everybody dividing their limited dollars among their unlimited desires is the only way that we can optimally divide society’s limited resources among its unlimited wants.
June 21, 2017 at 6:05 pm #11125
Believe what you like, but calling Netflix socialism, socialist, or a command economy is not painting a sane picture for you.
You still haven’t made that case. How is Netflix socialist? How is the buffet in my (or anyone’s) town socialist. Please make a better case. So far, you have failed miserably. You keep taking a couple aspects of a socialist economy and applying it to anything similar. That’s not the way it works.
If we take it to the absurd, we could say that there are individuals who would have said they were happy living within a socialist system. This means socialism makes people happy. There are so many steps of logic missing here it’s not funny. The same problem is found in your arguing Netflix is a command economy.
Your scale is way off. Netflix does not own the means of production of the economy. Netflix owns the means of production for its own business, but so does every other (or most every other) business. Your scale was off when you said Netflix needs to become a market. It is part of the market. It can’t cut off all other options to make it the only business in the market.
The main point you’re missing is socialism creates a monopoly because the state (who is claimed by the state to be “the people”) is the only provider of the products or services available to consumers of the economy.
In your example, consumers can keep their money from Netflix and subscribe to Hulu or and other service or use their money toward anything or nothing else in a free market.
Just because you thought of this one point (how Netflix is not getting consumers to pay for individual movies or TV shows) doesn’t mean they are socialist. It means they distribute their product or services differently than you think is appropriate. The buffet distribution method is not socialism. Please address this glaring issue.
June 21, 2017 at 7:13 pm #11126
When you go to the supermarket, you get to decide how you divide your limited dollars among the unlimited products. You prioritize. All the other shoppers prioritize. The supermarket looks at people’s priorities and adjusts the supply accordingly. If people spend more money on organic products, then the supermarket supplies more organic products. If people spend less money on meat, then the supermarket supplies less meat. If people spend more money on exotic fruit, then the supermarket supplies more exotic fruit. The supermarket can and does correctly respond to people’s priorities. Why? Because the people use their money to inform the supermarket what their priorities are.
Netflix, on the other hand, is not a market. You don’t get to decide how you divide your limited dollars among the unlimited products. You don’t prioritize. None of the other subscribers prioritize. Netflix can’t see people’s priorities so it can’t adjust the supply accordingly.
Recently Netflix canceled the show Sense8. Evidently its audience was too small. Netflix can obviously see how many people watch the show, but it obviously doesn’t know how much they value it.
So you need to figure out the answers to the following questions…
1. Do people’s priorities matter?
2. If so, how can people effectively and efficiently communicate their priorities?
Do we need to know people’s priorities in order to optimally divide society’s limited resources between meat and vegetables? Do we need to know people’s priorities in order to optimally divide society’s limited resources between chick flicks and nature documentaries? Do we need to know people’s priorities in order to optimally divide society’s limited resources between national defense and space colonization?
I’m guessing that you really aren’t aware of the most elementary economic problem…
Society’s resources: limited
Society’s wants: unlimited
There can only be one system that will optimally divide society’s limited resources among its unlimited wants. If you believe that we don’t need to know people’s priorities in order to optimally divide society’s limited resources between chick flicks and nature documentaries… then your belief has to be true for all goods.
The management of a socialist community would be in a position like that of a ship captain who had to cross the ocean with the stars shrouded by a fog and without the aid of a compass or other equipment of nautical orientation. – Ludwig von Mises, Omnipotent Government
If you believe that a compass (value signal) isn’t needed for chick flicks and nature documentaries, then your belief has to be true for all goods.
The only alternative to a market price is a controlled or fixed price which always transmits misleading information about relative scarcity. Inappropriate behavior results from a controlled price because false information has been transmitted by an artificial, non-market price. – Mark J. Perry, Why Socialism Failed
If you believe that no value signals, accurate or otherwise, are needed for chick flicks and nature documentaries, then your belief has to be true for all goods.
All the resources used for shows and movies can be used for other things. Just like all the resources used for meat can be used for other things. If people stopped buying meat, all the relevant resources wouldn’t vanish into thin air. They would be redirected to more valuable uses.
There can only be one system to optimally divide resources. If you believe that the optimal system doesn’t involve actually knowing people’s priorities, then your belief can’t only be true for chick flicks and nature documentaries, it has to be true for all goods.
June 22, 2017 at 12:39 am #11127
Your arguments are ridden with incorrect statements and logical fallacies.
** Not all supermarkets can and/or do respond to people’s priorities. Those supermarkets go out of business. That is a market reality you have glossed over.
***The term supermarket is not an economist’s label or term for anything. They are not better or bigger than what economists call markets. You’ve described a grocery store which is a store that sells groceries.
Although it’s not my favorite definition Simple English Wikipedia says a market economy is,
“A market economy is economy in which the prices of the products and services are chosen in a free price system that is decided by supply and demand.” This doesn’t allow for Netflix as a business. This is the economy as a whole.
A market I believe you are using is (as defined by the English Oxford Dictionary),
“A regular gathering of people for the purchase and sale of provisions, livestock, and other commodities.
“Or an open space or covered building where vendors convene to sell their goods.
“An area or arena in which commercial dealings are conducted.” You are taking various aspects of the definitions of market economy and market and making up your own to use as you please. If you can’t show me the definition you are using and who came up with it, I will no longer waste my time discussing this with you.
****But Netflix can and does prioritize the dollars given it by consumers (viewers of movies and TV shows). As I said earlier in this discussion, Netflix must have some way of deciding how to get new shows/movies and how to drop other shows/movies. Here are a few links that discuss what Netflix does or what they may do.
More of what they may do. https://blog.kissmetrics.com/how-netflix-uses-analytics/
What they do (although not all of it). https://medium.com/netflix-techblog/netflix-recommendations-beyond-the-5-stars-part-1-55838468f429
Make sure you read both pages of the second article. Both of these discuss the methods used to figure out what is best (directly and indirectly) for Netflix to change to satisfy their customers’ desires for varied shows/movies within Netflix’s own desires (they desire everyone to watch their shows/movies too).
But that is neither here nor there.
It makes little to no difference.
It’s not worth our discussing it at all.
Because, it doesn’t matter if we live in a market economy where businesses are allowed to fail. If we did, then Netflix may … or may not fail because they can … or cannot determine what their customers would like to watch. If they can’t determine what their consumers (present and potential) would like to watch, they’ll go out of business just as any supermarket (aka grocery store) would go out of business if they couldn’t determine what new produce their customers would like to buy in the future. Today’s desires are easy. It’s tomorrow’s desires that are so difficult to figure out.
You have become a patronizing jerk. I feel like I’ve wasted my time here.
Of course I’m aware of resources being scarce. I also don’t believe it is such a pressing problem that we need the state (via dunces like yourself) to force organizations like LearnLiberty.com and Netflix.com to distribute their product the way you want them to.
Netflix doesn’t have a controlled price. Other businesses have the option to drop or raise their price and Netflix can choose to raise or lower its price. A controlled price is controlled by the state.
You do this over and over again. You take things out of context and apply it to whatever you like. This destroys any real meaning to your points.
You really need to stop. No where in any of my replies have I said I thought the state has the best method of allocating resources. I feel the same about socialist methods of distribution (because its the same). What’s not the same is your idiotic view that Netflix is socialist. Please show me a serious economist that agrees with you. Or are you the economic prodigy that figured this out and is showing the world how Netflix must be cured of this horrific evil. Ha! What a joke!
Your replies have been thick with black and white fallacious thinking. You sound like one of the immortals in The Highlander movie. There doesn’t have to be only one way to distribute products and services to consumers. It’s up to the business (directly and consumers – indirectly) how hey transact with the consumer. Any force used toward your, my, or anyone’s better way takes the business’s and the consumers’ choice out of the free market and moves us toward socialism.
Overall, you’re just wrong. You can’t seem to fathom this, but it is plainly evident to anyone who has read this discussion with half a mind.
June 22, 2017 at 2:25 am #11128
“What’s not the same is your idiotic view that Netflix is socialist. Please show me a serious economist that agrees with you.”
If I’m acting like a patronizing jerk it’s because you’re a hideous student. Earlier in this thread you told people to read a book by Rothbard. Later on I recommended that you read two papers by Rothbard. Clearly you didn’t read them because here you are asking for a serious economist that agrees with me. The fact that you’re so ignorant about the very economist that you want other people to read is what makes you such a hideous student.
Let me spoon feed you some Rothbard…
Individual valuation is the keystone of economic theory. – Rothbard, Toward a Reconstruction of Utility and Welfare Economics
What is individual valuation? Rothbard explains…
The concept of demonstrated preference is simply this: that actual choice reveals, or demonstrates, a man’s preferences; that is, that his preferences are deducible from what he has chosen in action. Thus, if a man chooses to spend an hour at a concert rather than a movie, we deduce that the former was preferred, or ranked higher on his value scale. Similarly, if a man spends five dollars on a shirt we deduce that he preferred purchasing the shirt to any other uses he could have found for the money. This concept of preference, rooted in real choices, forms the keystone of the logical structure of economic analysis, and particularly of utility and welfare analysis. – Rothbard, Toward a Reconstruction of Utility and Welfare Economics
Why does it matter whether a man prefers a concert or a movie? It matters because society’s resources are limited. People dividing their limited dollars between concerts and movies is the only way to guarantee that society’s limited resources are optimally divided between concerts and movies. If you understand this, then you would also understand that the only way to optimally divide society’s limited resources between action movies and romantic comedies is for people to divide their limited dollars between action movies and romantic comedies.
Did Rothbard agree with me that Netflix is a command economy? Rothbard died before Netflix was founded. But it’s a stupidly obvious fact that Netflix subscribers can’t divide their dollars between action movies and romantic comedies. Given that Netflix doesn’t facilitate individual valuation, even a complete idiot should be able to understand that it’s a command economy.
“Of course I’m aware of resources being scarce. I also don’t believe it is such a pressing problem that we need the state (via dunces like yourself) to force organizations like LearnLiberty.com and Netflix.com to distribute their product the way you want them to.”
I never said that the government should force LearnLiberty or Netflix to become markets. I said that, if they were markets, then the donors/subscribers would benefit. It’s beneficial for consumers when products more closely match their preferences. In other words, it’s beneficial when supply more closely matches demand.
Am I a dunce? Intelligence is relative. Personally, I have absolutely no problem understanding individual valuation. I watched Sense8, and gave it a thumbs up, but Netflix doesn’t give me the opportunity to decide how to divide my subscription dollars between Sense8 and House of Cards. Therefore, Netflix doesn’t facilitate individual valuation.
You, on the other hand, have a tremendous problem understanding individual valuation. And for sure I’d be more sympathetic to your cognitive shortcomings if you had at least made the effort to read the two relevant papers by Rothbard. But you couldn’t even be bothered to do so. Instead, you prefer to read articles about Netflix’s decision making process. As if those articles will be more economically educational than Rothbard’s papers. Seriously?
June 22, 2017 at 11:55 am #11139
I’ve already read the papers you shared with me earlier. I found they discuss ideas I already agreed with. I have argued in favor of those things already. This is the main issue I’m having with you. You do not seem to understand the concepts you claim to be teaching. Instead you use them incorrectly to apply them to a narrow view of an unrelated point.
I understand individual valuation or the principle of subjective value. I also understand this is one of the reasons Rothbard is against state control and general involvement in the economy. I agree with Rothbard. What I don’t understand is why it matters for Netflix. They can value their dostribution model more than yours and therefore use it because they value it more. Can you not apply your claimed knowledge to the claimed issue. Then we can see it is not an issue at all. You need to get over your silly tirade against buffets and the like.
If “it’s a stupidly obvious fact that Netflix … is a command economy” then I’d love any one of the hundreds of Austrian (or even Chicago school) economists to say that Netflix is a command economy. You said earlier that LearnLiberty.com doesn’t practice what it preaches because it has this sort of distribution of its videos. This is straight idiotic.
So I seriously read beyond the two papers you suggested. You’re welcome. You refused to read those simple articles to find out how Netflix uses the information it has at its disposal to allocate the resources it has. OK. You can believe whatever you like, but you sound like a flat-earther.
June 22, 2017 at 4:45 pm #11145
Evidently you need more spoon feeding…
In the first place, how much of the deficient good should be supplied? What criterion can the State have for deciding the optimal amount and for gauging by how much the market provision of the service falls short? Even if free riders benefit from collective service X, in short, taxing them to pay for producing more will deprive them of unspecified amounts of private goods Y, Z, and so on. We know from their actions that these private consumers wish to continue to purchase private goods Y, Z, and so on, in various amounts. But where is their analogous demonstrated preference for the various collective goods? We know that a tax will deprive the free riders of various amounts of their cherished private goods, but we have no idea how much benefit they will acquire from the increased provision of the collective good; and so we have no warrant whatever for believing that the benefits will be greater than the imposed costs. The presumption should be quite the reverse. And what of those individuals who dislike the collective goods, pacifists who are morally outraged at defensive violence, environmentalists who worry over a dam destroying snail darters, and so on? In short, what of those persons who find other people’s good their “bad?” Far from being free riders receiving external benefits, they are yoked to absorbing psychic harm from the supply of these goods. Taxing them to subsidize more defense, for example, will impose a further twofold injury on these hapless persons: once by taxing them, and second by supplying more of a hated service. – Murray Rothbard, The Myth of Neutral Taxation
The government does not facilitate individual valuation. The government takes taxpayers’ money and decides how much of it to spend on defense, justice, infrastructure and many other things. It doesn’t matter if a taxpayer is passionate about pacifism, their tax dollars are going to be spent on war. It doesn’t matter if a taxpayer is passionate about protecting endangered species, their tax dollars are going to be spent on destroying the habitats of endangered species. The current economic system of government entirely disregards the valuations of taxpayers.
Does the government value its current economic system more than the alternatives? Obviously. Does this fact destroy Rothbard’s argument for individual valuation? Obviously not.
The issue isn’t whether Netflix values its current economic system more than the alternatives. The issue is whether a market system would be more beneficial than Netflix’s current command system. If you had actually read or understood Rothbard, then you would know that a market system would be far more beneficial than Netflix’s current command system.
It’s mind-boggling that you think that Rothbard’s critique of the government’s current system is somehow invalidated by the government’s valuation of its current system.
Mao Zedong’s economic system resulted in millions of people starving to death. But the system should have been maintained simply because Mao highly valued it?
Why in the world would Rothbard bother explaining the problem with the current system of government if his explanation would be invalidated by the government’s valuation of its own system?
Admittedly, I’m not the biggest fan of the term “individual valuation”. A king is an individual. Let’s say that he highly values a war. Therefore, the war should be fought?
From my perspective, the term “earner valuation” is better than “individual valuation”. A king deciding to spend a billion dollars on a war can be technically considered to count as “individual valuation”. But it’s certainly not “earner valuation”! The king didn’t earn the billion dollars. All that money was earned by taxpayers. So earner valuation would involve each and every taxpayer deciding how much of their own hard-earned tax dollars to spend on the war. Then, and only then, could we see and know the true social value of the war.
But it should be a no-brainer that Rothbard wasn’t arguing for monarchies or dictatorships or command economies. The issue isn’t how much one individual, or a committee, values a war… the issue is how much every individual values the war. And the only way to figure out how much everybody values a war is to give each and every person the opportunity to decide how many of their own dollars to spend on it.
“If “it’s a stupidly obvious fact that Netflix … is a command economy” then I’d love any one of the hundreds of Austrian (or even Chicago school) economists to say that Netflix is a command economy.”
Is anything preventing you from asking economists whether Netflix is a command economy?
June 22, 2017 at 5:22 pm #11147
I told you I read it. Not just that, but I understood it. I am no stranger to Rothbard’s works.
I never said government valuing its own system invalidates Rothbard’s critique of subjective value. You’re making crap up again. If you’re confused I’m happy to walk you through it. If you’re not willing to learn, keep on doing what you’re doing, cuz it’s getting you nowhere.
I’m not concerned with the terms we use in this discussion as long as we can agree upon definitions. You jump from point to point so quick, you won’t allow any mutual understanding. Then you blame me for not knowing what you are saying. Dumb. You refuse to go back and address my concerns. The balls in your court. If you want any understanding of your points, you need to address the concerns I have. You have refused and continue to refuse to do so.
The only reason I need for not asking anyone why Netflix is or is not a command economy is because I already know the answer. It’s not.
I asked you to prove it is which you haven’t. You’ve just repeated it over and over and somehow hoped it has become a reality. It didn’t. Since you couldn’t prove on your own, I asked you to show me any Austrian economist that has said he/she agrees with you. Now the burden of proof is on me to prove your hogwash?! Haha! I think LearnLiberty.com should ask your mom to cancel your account. This trolling has gone on too long. Pre-teens shouldn’t be allowed free reign to troll discussion boards like this.
I won’t be responding unless your comment has some semblance of reasonability behind it, or you’ve made what appears to be a sincere attempt to address the many concerns listed in the above replies.
Taxation is theft.
August 18, 2017 at 2:56 pm #11517
To understand how “we the people” have been fooled into allowing this submission without resistance see Peter Hendrickson’s book “Crack the Code” in its 13 printing and with millions and millions of displayed refund checks from the IRS proving its veracity. It involves using a custom-defined definition of “income” in the statutes, regulations, and written tax code which is substituted for the commonly used word “income” (meaning all that comes in).
The government forces businesses to report common “income” as “taxable income” and to withhold as if private earnings were “taxable income” and people do not know better to object and, therefore, go along. If they do properly, they get a refund of, not only, federal and state taxes but, also, social security and medicare, etc taxes proving that they are correct in the IRs’ eyes.
Notice how the articles in the Constitution have never been ammended like prohibition, slavery, women’s sufferage, etc to remove the requirements set forth in the Constitution. How come? See the Supreme Court decisions answering the challenges immediately after the enactment of the 16th Amendment and the court’s plain discussion stating that “income” as used in the Constitution does not mean earnings of private individuals but, rather, only means privileged benefits from doing work for the federal government. (Brushaber v Union Pacific).
Hendrickson explains how the sleight of hand has been performed since the first income tax in 1860 imposed by Lincoln. Fascinating who-done-it work. Taxation is not theft if you consent and agree to it, and, if you don’t, they do not take it after a fight hoping that you back down.
Hendrickson, also, has a website “lost Horizons” with most of the material available.
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