Try harder.

Looks like OP just took Econ 101 and now he thinks he knows everything. Maybe if he pays attention to real life he'll find out that the free market isn't some magical benevolent force of prosperity and happiness, and that it's mostly run by a bunch of assholes who would sacrifice their first born to turn a profit.

>>186535

I'd like to see you make a computer from scratch for 1000 dollars.

Externalities lol

>>186535
>Hurr abstract concept is not benevolent
>Abstract concept is actually EVUL

While the free market is hardly the be all end all when it comes to successful economic models, a true free market is one of the better models we have.

The problem today is that IT ISN'T A FREE MARKET ANYMORE. Bush's "Free Market" was actually a severely biased market, and it continues to be so to this day.

Honestly, I think the last truly free market was before we invented money, with the good old trade and barter system...but I am a classicist.

Ability, effort and even luck are all distributed on a normal (Gaussian) distribution.

>>186574
Free market capitalism takes these inputs and then rewards people with wealth and incomes on a Pareto distribution.

This can be explained thus
http://hbswk.hbs.edu/archive/2906.html

Free market capitalism is undoubtedly an unfair system.

>>186565
>Implying freedom is suppose to make things fair.

>>186565
>unfair

If you think it's fair to take from the productive and give to the unproductive, which libtards usually do.

You're right OP. Also very few legitimate externalities exist, mostly pollution and so forth. Pretty much all monopolies are due to government (regulations, copyright, etc.). The biggest problem right now is that the government is run by big business and international bankers who lobby to destroy the free market.

>>186565
Life isn't fair.

Grow up and deal with it.

Who cares who you fuck over, the more people you fucked over the better off you are. You liberal faggots should learn this, this is why you fail.

No one wants to live like a saint, everyone wants to live like a king. When you help people you're wasting your life. Lower class people are there to support the best, not the other way around.

>>186581

I agree. Freedom, true freedom...doesn't necessitate fairness.

Fairness is mandated. So, when it comes down to it, which is more important to you?

True freedom to excel and succeed (which is what a true free market would provide, emphasis on True), or a system where everyone is treated fairly, no matter their skill, drive, or talent?

The thing about the free market is that it ALWAYS exists. The supply and demand curves are just a representation of every consumer's willingness to pay and every producer's willingness to sell.

Even in a command economy like the soviet union people still found ways to trade, for example the usage of cigarettes as currency.

>fair
>7. Being in accordance with relative merit or significance: She wanted to receive her fair share of the proceeds.

the free market is fair

>>186581

Free market capitalism is not the only economic system in which people can be free.

Many different such systems are possible by inventing alternative systems of "Bundle of rights"
http://en.wikipedia.org/wiki/Bundle_of_rights

One such alternative system would be Georgism, as proposed by Henry George.
http://en.wikipedia.org/wiki/Georgism

In Georgism everyone is just as free as under free market capitalism (i.e. they choose their own actions freely to their own benefit), it's just that the rules of property rights have changed, but it is not socialist or communist, the government is still just the guarantor of a bundle of rights, not an economic actor.

>>186580
You posit this like there should be some kind of fair system, or that such systems are inherently fair/unfair/good/evil to begin with.

Like a club or a knife, such a thing just sits there, for people to use. They can use clubs to hammer pegs down for a tent, use a knife to hunt game. Or you can bash someone's skull in and cut their limbs off to eat later.

I can take a cross or bible, and beat you to death with it. Is it evil then? For you pedantic coolface.jpg atheists say i get a copy of The God Delusion instead and kill you with that.

>>186593

Free market capitalism rewards the unproductive.

Paris Hilton would still have a huge yearly income if she stopped doing her "work" and sat in her house browsing 4chan all day every day.

Note that's INCOME, I'm not talking about wealth.

>>186488
Why a true free market will never exist.....
Natural monopoly theory and monopolies.

>>186599
You're arguing that its natural that everyone wants to live like a king and no one wants to live like a saint.

I think everyone wants to live as both. At least in america everyone wants to think they are good people, the small minority doesnt give a damn about it, but everyone wants to live like a king, with an even smaller minority not giving a damn about that.

That's the problem.

>>186580
HURRR RICH PEOPLE HAVE MORE MONEYS DURRRRR THAT"S UNFAIR DEEEERRRPPP

>>186599
>Life isn't fair.

>Grow up and deal with it.

>Who cares who you fuck over, the more people you fucked over the better off you are. You liberal faggots should learn this, this is why you fail.

>No one wants to live like a saint, everyone wants to live like a king. When you help people you're wasting your life. Lower class people are there to support the best, not the other way around.

I have nothing against competition, and I'm all for unequal outcomes, however the rich under free market capitalism are not "the best", they are the privileged. When wealth increases above the point that the Pareto distribution kicks in such people did not gain wealth for any personal quality they possess or any special effort they made but rather for the same reasons that royalty ruled in a feudal system or a lottery winner can afford to have a servant.

I don't even have a problem with supporting such a system. I just don't like people like you telling factual untruths such as that the rich are "the best". In general they're no better than most. They got there for the same reason lottery winners got there.

>>186687
the best=standard of living

The Free Market is not fucking free, it is controlled and manipulated by the biggest companies and richest people within it, with the aim of making it smaller and having most of its wealth go to them.

Any market needs to be regulated by a non-corporate entity. Supporting the idea of a Free Market is like saying society would be perfectly civil and crime-free without any police or law - guess what, it's fucking not. In an Anarchic society, the more powerful would eventually take over and get more power, with no say for the individual person. It's the same principle with money, there are no double-standards.

>>186687
> I have nothing against competition, and I'm all for unequal outcomes, however the rich under free market capitalism are not "the best", they are the privileged.

Rich people are "the best" at providing something that other people find valuable. You're substituting your notions of what is the "most fair" and "the best" with all those millions of other people who freely gave their money to these rich people.

>>186717

Inheritance = Providing Value?

No.

>>186722
Inheritance = Free Market?

No.

>>186722
Im sure you don't understand why the wealthy stay wealthy either.

Protip: they re-invest in the economy, providing jobs and spend the money in ways that aren't average. Someone has to make that G5 Jet, pilot it and co-ordinate it.

You make it sound like they just take money out of the economy and do nothing with it.

>I agree. Freedom, true freedom...doesn't necessitate fairness.

>Fairness is mandated. So, when it comes down to it, which is more important to you?

>True freedom to excel and succeed (which is what a true free market would provide, emphasis on True), or a system where everyone is treated fairly, no matter their skill, drive, or talent?

A fair system would reward people according to their skill drive and talent. It would NOT reward people equally. You seem to be confusing equal outcome with fairness.

A fair football game is one where both teams have the same rules and treatment by the referee, irrespective of the final score, and the final score would reflect talent, effort and perhaps a (hopefully limited) degree of luck. Free market capitalism only equates to that at the lowest levels of wealth before unearned income starts to predominate where it then becomes essentially analogous to the feudal system, and a Pareto distribution of income takes over.

Free market capitalism rewards the idle and unproductive rich with unearned income, just as kings and queens received their payments for "fealty".

This is why despite talent, ambition, and effort being Gaussian distributed traits amongst humans, the economic rewards (income) of free market capitalism are instead Pareto distributed.

when will you jerks get it through your thick skulls that most people don't want to live in a society where the elderly and sick and poor are left to die in the street

>>186735

Responsible people do, yes, but that is because they are responsible.

But with all types, you also get the idiots and morons - and whilst this is normal, it's not so acceptable when they have millions to throw around.
I also have an issue with companies employing so many staff, and yet always being helmed by "a family member", such as with Murdoch's son being the head of one of his companies. That's more like Aristocratic elitism than capitalism.

>>186615
>fair
>>7. Being in accordance with relative merit or significance: She wanted to receive her fair share of the proceeds.

>the free market is fair

No it isn't you retard. Human talent and effort are normally distributed. Incomes in free market capitalism are Pareto distributed.
http://en.wikipedia.org/wiki/Pareto_distribution

So free market capitalism OBVIOUSLY does not reward people in accordance with their talent or effort.

Jeez, I despair if we can't even get that far.

economic models often rely on unrealistic hypothesis

Economist here.

Free market is good, yes. There are some ways where the government can improve things (when there are externalities, for example), but the market itself is quite efficient (and underrated by non-economists)

Most people complaining about corporations have the sweet illusion that politicians "care about the people". I think this is a bigger simplification than those found in Econ 101. Politicians care mostly about themselves and they have very few incentives to actually behave in a way that will be better to most.

As for the rich, 80% of millionaires are first generation millionaires. They have made their money on their own, in their lifetime.

>>186765
They are more realistic than expecting politicians to be "good guys".

>>186488

It's called the Great Depression. America was, for the most part, a total free market until that point. But, when the free market spins out of control to a certain extent, it can't easily correct itself, or ever correct itself in some circumstances. Instead of having the market collapse, the government must step in, as it did during the GD.

>>186780

you would think invoking the great depression would shut these supply side assholes up

but you greatly underestimate their confirmation bias and appetite for revisionist history

>>186780
LOL

you think in the 1920s we were a free market

LOL

>>186786
So when did a free market exist?
And if you whine "It hasn't but if we would give it a chance", you're no different than a communist.

>>186786

NAE TRUE FREE MARKET

jesus christ

>>186793
Its never existed.

Because their is no country thats wiling to constitute their political economy that way

>>186717
>Rich people are "the best" at providing something that other people find valuable. You're substituting your notions of what is the "most fair" and "the best" with all those millions of other people who freely gave their money to these rich people.

No rich people are "the best" at OWNING the assets that "provide something that other people find valuable". In the same way that the King of France owned all that land that provided all those peasants and knights below him on the pyramid with food.

That's OWNING, by which I mean OWNING, oh and did I mention that means OWNING. Provide makes it sound like the person is giving something to others that they have, by which giving they then lose possession of that thing. No they own it, get paid for owning it, and still own it after they have so called "provided" it, same way the King of France owned the land.

>>186807
>Even Marx was more willing to accept this truth then you are

>>186780
Economist here, again.
Unless you are an Austrian Economist, there is no contradiction in defending that fighting recessions can be positive and in being a free marketeer.
Milton Friedman (the guy that did one of the best explanations of the Great Depression) was a libertarian and argued that a expansive monetary policy by the FED could alleviate the Great Depression. Actually, there are many New Keynesians that are mostly free-marketeers.

Recessions can be fought =/= let's disregard the market for everything.

>>186742
> A fair system would reward people according to their skill drive and talent.

No. It rewards skill, drive and talent *at providing something others find valuable*. Just having skill, drive and talent is not enough. Other people must find it valuable.

> Free market capitalism rewards the idle and unproductive rich with unearned income, just as kings and queens received their payments for "fealty".

Being able to make million dollar loans is a very valuable thing to do. We know this because there are lots of people willing to pay interest. There is nothing "feudal" or "unearned" about this.

> This is why despite talent, ambition, and effort being Gaussian distributed traits among humans, the economic rewards (income) of free market capitalism are instead Pareto distributed.

This is because, by definition, being rich means that you have a larger proportion of wealth than other people. A Gaussian distribution of talent, ability and luck, logically implies a Pareto distribution of wealth. The small number of people at the above average tail end of the bell curve provide most of the value. So a small number of people have most of the wealth.

>>186807
>As for the rich, 80% of millionaires are first generation millionaires. They have made their money on their own, in their lifetime.

>>186574
>Ability, effort and even luck are all distributed on a normal (Gaussian) distribution.
Aren't you taking this out of your ass? How can you prove this?

>>186759
>Human talent and effort are normally distributed. Incomes in free market capitalism are Pareto distributed.

I don't think you even understand what you're talking about. You're looking at two graphs and thinking they should have the same shape. That most people are towards the middle doesn't mean they should hold most of the wealth. The ones on the edge of the distribution could be slightly more able or they could be 100000 times more able.

and you're exaggerating how many wealthy people there are. Like anon said, most millionaires are self-made. The mega-rich are an exception, and earning so much interest simply by putting money into banks is due to inflation, not the free market. Besides that, they only earn money when their investments create wealth. I'd rather Warren Buffet managing his billions than someone else.

>>186771
>As for the rich, 80% of millionaires are first generation millionaires. They have made their money on their own, in their lifetime.

So? That doesn't make the system fair.

Also millionaires are not that rich. There are about 17,000,000 millionaires and above in the US, about 5% of the population. However millionaires and below (bottom 95%) only own 40% of the total wealth. The top 5% own about 60% of the wealth.

Millionaires are only equivalent to "knights" in the feudal system pyramid, if even that. Not even Lords or Princes.

This isn't news. This is bitching about politics. GTFO and get to your correct board.

Also, the free market doesn't work without competition such as a monopoly. Where there are natural monopolies like the river, utilities, scarce resources, exclusive rights to products, etc, etc, then some other form of management other then the free market needs to be in control.

>>186888

...but, /po/ is papercraft and origami!

>>186877
>So? That doesn't make the system fair.
What is fair? What is not fair?
Also, the point of millionaires being self-made men is that they became rich because of their efforts, not because they inherited it.
This is way different from Paris Hilton's case.

>Also millionaires are not that rich. There are about 17,000,000 millionaires and above in the US, about 5% of the population. However millionaires and below (bottom 95%) only own 40% of the total wealth. The top 5% own about 60% of the wealth.
Didn't you just say the millionaires share 60% of the wealth?

>Millionaires are only equivalent to "knights" in the feudal system pyramid, if even that. Not even Lords or Princes.

You are underage, aren't you?

>>186896
>>>/newpol/
Now GTFO, you ignorant fuck-wit!

I ain't saying the free market is a bad thing, but I will say that America doesn't have a free market.
Libertarians propose a "laissez-faire" market; that's not a free market, it's a market where the government isn't one of the manipulators.

>>186946
Don't over generalize, there is a freemarket for hard-drives. and eggs. There is not a free market for sugar. America is not the homogeneous market you make it out to be. Nothing is as simple as a 4chan post can make it out to be.

>>186924

how the fuck did you hyperlink to the late 90s?

>>186742
> A fair system would reward people according to their skill drive and talent.

>No. It rewards skill, drive and talent *at providing something others find valuable*. Just having skill, drive and talent is not enough. Other people must find it valuable.

Agreed, and by that measure free market capitalism is still unfair and a failure. It rewards the idle and untalented, IF those idle and untalented happen to be rich. The fact that some people get somewhat rich by earning it disguises that capitalism pays the idle and untalented as much as the hard working and talented whenever they are already rich by virtue of their ownership rights. That all have an equal right to purchase the means of production does not transform the fact that this is an economic pyramid structure just like the feudal system. While most people earn what wealth they have, most of the wealth is owned by a small number of people who didn't earn it.

>> Free market capitalism rewards the idle and unproductive rich with unearned income, just as kings and queens received their payments for "fealty".

>Being able to make million dollar loans is a very valuable thing to do. We know this because there are lots of people willing to pay interest. There is nothing "feudal" or "unearned" about this.

Being able to make a milion dollars from nothing is indeed very valuable. However most people with such talents and drives will never be truly rich, never even get into the top 2% or so of the population who own half of all the wealth and "earn" half of all the income.

However being able to make a milion dollars AFTER YOU'VE BEEN GIVEN A BILLION IN STARTING CAPITAL is not valuable at all. You could actually train a chimpanzee to do it by throwing darts at a board.

If the Nazis would have succeeded in their plan, they'd be like Japan is today. Japan pwns economically and this is why. I can't say I understand economics all that well, but this article says there's more than just communism and free market to choose from.

http://www.paecon.net/PAEReview/issue38/Jacoby38.htm

>> This is why despite talent, ambition, and effort being Gaussian distributed traits among humans, the economic rewards (income) of free market capitalism are instead Pareto distributed.

>This is because, by definition, being rich means that you have a larger proportion of wealth than other people. A Gaussian distribution of talent, ability and luck, logically implies a Pareto distribution of wealth.

Of course it doesn't. Consider, for example, a free market on an idealised desert island with no economic capital and non scarce land. Wealth would be Gaussian distributed over the long term with the inputs being Gaussian, not Pareto distributed.

Externalities.

Undemocratic.

Also, markets aren't efficient. Biggest lie ever.

>>187000
>As for the rich, 80% of millionaires are first generation millionaires. They have made their money on their own, in their lifetime.

>>187007
Actually, they are quite efficient most of the times.
There are some problems that can be fixed like externalities, but they are on the overall a quite efficient way of managing resources.

And if you compare it to the alternatives, you will see that the market is quite darn good.

>>186905

>>>186877
>>So? That doesn't make the system fair.
>What is fair? What is not fair?

A fair system is one that rewards in accordance (i.e. in relative proportion) to the worth of the personal contribution of the individual, as measured by how others value that contribution. Free market capitalism doesn't do that.

>Also, the point of millionaires being self-made men is that they became rich because of their efforts, not because they inherited it.

Can you not get it into your skull THAT THAT IS NOT THE CASE. Read this short article from the Harvard Business School,
http://hbswk.hbs.edu/archive/2906.html

Now go and look at all the econophysics models that put Gaussian distribution of talent etc. in and get Pareto distribution of rewards coming out. For example read this.
http://www.newscientist.com/article/dn7107
(pic related)

"Fairness" is over-rated. You know the old saying...

>>187103
Fairness is inextricably linked to the correct allocation of resources. This is one reason why Georgism would be both fairer and more productive and efficient.

>>186488
Oh look, its this shit again.

OP, stop making multiple thread about free market herp derp. You are not getting paid for it, make better use of your time please.

>The analogy also holds because money is like energy, in that it has to be conserved. "It's like a fluid that flows in interactions, it's not created or destroyed, only redistributed," says Yakovenko.

derp entry-level economists who don't understand the difference between money and wealth (as implied; their statements are correct). Let's set up a meeting of wannabe social engineers and see what they come up with! Great idea bro.

You can bawww about "fairness," but I'm OK knowing that in a free market there are only mutually beneficial trades. Besides that, this idea that they can decide what is "fair" and take away others' freedom is quite disgusting.

>>187181

>You can bawww about "fairness," but I'm OK knowing that in a free market there are only mutually beneficial trades. Besides that, this idea that they can decide what is "fair" and take away others' freedom is quite disgusting.

You are stuck in the idea that free market capitalism is the only system whereby only mutually beneficial trades occur. This is simply not true. e.g. Georgism is,
a) not free market capitalism
b) another system whereby only mutually beneficial trades occur

There can be many more such systems by altering the "bundle of rights" at the core of property law. You can make the system fairer without reducing anyone's freedom, but by simply changing the rules of the game. So that we're playing normal soccer (say) and not soccer where the size of your goalposts halves every time you score a goal, doubles every time you concede a goal, and your goalpost size carries over to the next game in the season (which is what the so called "fairness" of free market capitalism is actually like). Who the hell would pay to watch a "free" and "fair" sport like that?

Take another analogy. Some argued that the new high-tech swimsuits made olympic swimming unfair,
http://bigpondnews.com/articles/Sport/2010/02/20/Michael_Phelps_to_quit_swimming_430997.html
in that like Formula One, it was the swimsuit makers competing to see who was the best as much as it was the individual swimmers.

The olympic committee have now decided to ban these swimsuits to make the game fairer. Point being you can make things fairer by changing the rules, but that doesn't take away anyone's freedom any more than the property laws do in the first place. Have olympic swimmers had their freedom taken away? No more so than the ban on them wearing flippers takes their freedom away, or a ban on me squatting on land owned by someone else takes my freedom away in free market capitalism.

>>187087
>A fair system is one that rewards in accordance (i.e. in relative proportion) to the worth of the personal contribution of the individual, as measured by how others value that contribution. Free market capitalism doesn't do that.

Actually, it does... Since it's based on voluntary trades you only get what other people want to pay you.

As for econophysics, as much as I respect the contributions of Physics to mankind, they know about as much of Economics as Economists know of Physics. Econophysics are full of shit.

>>187087
> Now go and look at all the econophysics models that put Gaussian distribution of talent etc. in and get Pareto distribution of rewards coming out.

No shit. When you have a fair free market (wealth = value produced) with a Gaussian distribution of population vs. value produced, you will always end up with a Pareto distribution of wealth. I can't believe that there are idiots who can't see how this is tautological and are trying to create all sorts of "complex models" to explain this.

Free market means China wins. So I have nothing against it.

>>187349
Preventing mutually beneficial trades is just as bad. Isn't Georgism about taxing land and giving ownership to whomever works the land? If a land owner wants to rent his land and someone else wants to rent it, why shouldn't they be able?

And I never really understood the argument about land rent. What's special about land? Doesn't any scarce good accrue "unearned" value (precious metals, money, baseball cards, etc.)? I doubt you can get rid of economic rent, and it would probably do more harm than good anyway.

For most goods, yes. Some things however simply do not function within the market. Health insurance is a good example. Health insurance companies have to provide coverage for healthy individuals in order to make a profit. However, in bad economic times many healthy individuals will drop their coverage, while sick individuals will not. This means that insurance companies will have to increase premiums in order to continue making a profit. This increase in premiums will cause more healthy individuals to drop their coverage and force yet another increase in premiums, creating a cycle that is known as the 'death spiral.' For goods as inelastic as health care (life itself, essentially) you cannot expect a profit seeking market to produce the best outcomes for society.

This is why health care reform is important.

Anyone that sages this thread is an obvious marxist

don't listen to them


Also
anyone that believes the US healhcare system is a free market deserves ti be shot

>>187493
The only reason everyone uses insurance is because the US government almost forces them to. This makes prices skyrocket.

The only reason health care is too high is because of regulations.

Fact.

>>187493
In my country, private health insurance works quite well.

>>187363
>>A fair system is one that rewards in accordance (i.e. in relative proportion) to the worth of the personal contribution of the individual, as measured by how others value that contribution. Free market capitalism doesn't do that.

>Actually, it does... Since it's based on voluntary trades you only get what other people want to pay you.

But you don't only get paid for what you trade, but also for what you own without trade (no ownership passing).

So the income distribution in free market capitalism has very little to do with the value of a person's labor to others except at the level of the plebs. In the top half of wealth it's nearly all about extracting wealth from plebs due to ownership of land and capital.

>>186745
This is why we don't want to live under communism.

>>187493
If your replace "health" with "food" in that argument, you will make the case that the production and sale of food should not be left up to the free market because people must eat and farmers can charge whatever they want. Yet somehow, this doesn't seem to be the case.

>>187574
Farm subsidies.

Hate the free market?

I say again. Build a computer from scratch. Build the motherboard, hard drive, monitor, power supply etc all by yourself.

you have 1 year and 1000 dollars. do it.

>>187574
Also, food stamps.

>>187574

Sorry, growing a tomato is nowhere near as expensive as treating somebody for pancreatic cancer.

Try again faggot.

>>187581
> Farm subsidies.
Which are the main cause of poverty in the third world.

>>187586
> Also, food stamps.
Which drive up the price of food.

>>187528
What? Dude, I will give you an advice. Buy a book on Econ 101. If you dislike righties you can buy the one by Paul Krugman, that is a quite nice book.

Just one explanation: capital is also needed for the production of stuff.

>>187581
>>187586
Are you guys trolls or illiterates in Economics?

>>187603
> Sorry, growing a tomato is nowhere near as expensive as treating somebody for pancreatic cancer.

.. because of government monopolies like the AMA that keep medical treatments expensive.

>>187603
Just shows how incompetent and dependent poor people are due to the welfare state. How much do you spend on food a year? Like $5000? That's plenty to cover all catastrophic illnesses. And really everyone should be saving a few thousand dollars every year so eventually they are not dependent on insurance companies either.