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Hot Topic (More than 10 Replies) Does this prove Libertarianismists/free market preachers to be utter dickheads? (Read 656 times)
Limey
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Does this prove Libertarianismists/free market preachers to be utter dickheads?
Oct 9th, 2017 at 3:55pm
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Lol. Sorry West, TL,  Lomelis,  only teasing.


https://www.google.co.uk/amp/s/amp.theguardian.com/world/2017/oct/09/nobel-prize...

...however,  given the central plank of your craaaazy philosophy is the rationality of decision making, food for thought?


I can anticipate the immediate response,  and to prove how clever I am, I shall pm a brief version to a trustworthy neutral, our friend Patrick2.
  

Under Capitalism, Man exploits Man.

Under Communism, it's the exact opposite.
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The Wreath of Khan
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Re: Does this prove Libertarianismists/free market preachers to be utter dickheads?
Reply #1 - Oct 9th, 2017 at 4:08pm
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Dickheads?  Nooo.  To paraphrase Galbraith

The modern libertarian is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.
  
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TowardLiberty
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Re: Does this prove Libertarianismists/free market preachers to be utter dickheads?
Reply #2 - Oct 9th, 2017 at 5:03pm
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I have to say I love the thread topic. This is exactly the kind of thing that interests me.

To answer the general question "does this prove libertarians/ free market people wrong?"

I would answer with an emphatic, no.

And I have to say from the outset, I agree entirely with what Thaler is saying about rationality. I have books of his on my shelf. He is at the cutting edge of the field, hence his award.

Essentially, what he is saying is that people do not make decisions based on some perfectly rational utility calculus, nor do they calculate in terms of probability. Well some do but that's only for certain kinds of decisions. It's not how we decide what to eat for lunch, or what outfit to buy.

Many of our decisions are more gut instincts which reflect some cognitive processing we are not really aware of. Our brains do the work for us, as it were. But these gut reactions do reflect our underlying preferences. As our preferences change, our actions tend to change with them.

Essentially, the point is that humans do not act like perfectly rational maximizers the way neo-classical economic models suggest they do. In reality, there is a lot more room for bias, emotion and error inherently interwoven in our decision making.

I grant all of that. And truth be told, these ideas are very prominent in the Austrian school of economics. The Austrians stress a much more subjectivist and realistic understanding of rational decision making than the neo-classical model builders. They have a different terminology but in many ways there is overlap between their view of choice and the behaviorist view.

The Austrian view of choice stresses the subjective nature of decision making and that leaves the door wide open to bias and error. Austrian economics is fundamentally a disequibilbirum economics where as the neo-classical models tend to be centered on equilibrium. This is all to say I share the criticism Thaler has made of the neo-classical model of man as homo economicus.

So if I grant that, how can I not agree that the libertarian free market ideology is wrong? This quote by Steve Horwitz on just this very issue sums it up better than I could.

Quote:
Behavioural economics arguments for intervention ignore the cognitive biases of political actors, neglect the comparative perspective that results from such biases, and do not examine the ways in which markets are superior to politics in providing the information and incentives actors need to become aware of their errors and correct them. The existence of imperfectly rational agents, like the existence of imperfect markets, is therefore not a sufficient condition for government intervention into the market.
http://onlinelibrary.wiley.com/doi/10.1111/ecaf.12186/full

The paper is well worth the read, that's just a piece from the abstract.

The essential point is that markets have a feedback system and incentive system which help us discover and steer away from error. Political decision makers lack this and actually face a perverse incentive design. What I mean by that is that the incentives are aligned in such a way in politics as to fail to properly punish errors or deviations from the common good. In politics, the incentives are such that success is achieved by serving special interests at the expense of the common good.

Where as when entrepreneurs make investments and decide on a particular allocation of inputs and outputs, the system of price, profit and loss either confirms or falsifies their hypothesis. And if they failed there is no incentive to double down and every incentive to find a new plan- one that will hopefully be consistent with the needs of others.

So even granting that people are not rational actors, it still follows that a system of individual choice is superior to that where the few plan for the many. If humans are irrational then by all means let's not give any of these irrational people power over others. For if one cannot rationally plan their own life, it is very doubtful that they can do so for the lives of others.

That said I leave open the possibility that government policy can steer outcomes in a beneficial way. I just don't default to that view. I see it as a possibility but one that we should guard against accepting too easily given the inherent nature of politics and human rationality.
« Last Edit: Oct 9th, 2017 at 10:24pm by TowardLiberty »  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Re: Does this prove Libertarianismists/free market preachers to be utter dickheads?
Reply #3 - Oct 9th, 2017 at 7:01pm
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Limey wrote on Oct 9th, 2017 at 3:55pm:
Lol. Sorry West, TL,  Lomelis,  only teasing.


https://www.google.co.uk/amp/s/amp.theguardian.com/world/2017/oct/09/nobel-prize...

...however,  given the central plank of your craaaazy philosophy is the rationality of decision making, food for thought?


I can anticipate the immediate response,  and to prove how clever I am, I shall pm a brief version to a trustworthy neutral, our friend Patrick2.


As TL pointed out, what is best for someone is a subjective measure.  So when you say that his influence on cigarette taxes, for example, made people make a choice that was better for them (vaping instead of smoking cigarettes), I say, "so says you".  The smoker clearly disagreed until they were "nudged" with an added cost for smoking cigarettes.

A decision you see as irrational can easily be rational for someone who doesn't share your exact values.

Some people value the ability to decide based on their gut, rather than stopping in their tracks and carrying out an extensive calculation of whether it is economically the best choice.  Who are you to say that is an irrational decision?

I am reminded of a story I heard with regard to Bill Gates and Warren Buffett (or anyone with their level of wealth) that states that if they were to drop a $20.00 bill on the ground, financially, they are better off not wasting their time picking it up (based, I guess, on their earnings and the rate at which they earn).  But I bet there is a good chance that both of them would make the decision to pick it up.  Why?  Probably because their gut would tell them they should and their decision making process ends there.  Why?  Because they want it to.  They don't want to think any harder about it.  It doesn't make it an irrational decision, it just makes it a decision based on what THEY value, not what someone else (expert, government, voter, etc.) values.

Then there is the other point TL pointed out.  If the non-free market option amounts to no other choice but government or other intervention (what other options are there?), then what of the equally flawed (ie, just as flawed as the citizens generally) politicians and bureaucrats that would also be acting irrationally but doing so on a much larger scale than any one free market individual could?

TL;DR: Just because someone doesn't act perfectly in fulfillment of the interests projected on them by others, does not mean they are acting irrationally, nor does it dismiss free market economics, since the same issues arise in a non-free market environment.
  
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Re: Does this prove Libertarianismists/free market preachers to be utter dickheads?
Reply #4 - Oct 9th, 2017 at 7:20pm
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I've suggested many times that you, TL, are a Red Comrade welcome on the barricades... This is to disguise the uncomfortable feeling that I may be a bloody libertarianismist class traitor scumbag.


Food as so often for thought here.

Thanks for your post.

I will digest it and ask the Soviet what to say.
  

Under Capitalism, Man exploits Man.

Under Communism, it's the exact opposite.
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Re: Does this prove Libertarianismists/free market preachers to be utter dickheads?
Reply #5 - Oct 9th, 2017 at 8:49pm
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Limey wrote on Oct 9th, 2017 at 7:20pm:
I've suggested many times that you, TL, are a Red Comrade welcome on the barricades... This is to disguise the uncomfortable feeling that I may be a bloody libertarianismist class traitor scumbag.

Food as so often for thought here.

Thanks for your post.

I will digest it and ask the Soviet what to say.

Ah. Now it makes sense! Haha

Hey man, I'm honored to help you question it!
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Re: Does this prove Libertarianismists/free market preachers to be utter dickheads?
Reply #6 - Oct 9th, 2017 at 8:54pm
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wyattstorch2004 wrote on Oct 9th, 2017 at 7:01pm:
  If the non-free market option amounts to no other choice but government or other intervention (what other options are there?), then what of the equally flawed (ie, just as flawed as the citizens generally) politicians and bureaucrats that would also be acting irrationally but doing so on a much larger scale than any one free market individual could?

That's a good point. We're probably causing damage if we subject social life to the conscious control of Reason, if we also assume man is irrational.

That's like handing an AK-47 to a monkey.

  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Re: Does this prove Libertarianismists/free market preachers to be utter dickheads?
Reply #7 - Oct 9th, 2017 at 8:56pm
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Free Market!  They must be liberals
  

Definition of Stupid: 
Knowing the truth, seeing evidence of truth, but still believing the lie.
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Re: Does this prove Libertarianismists/free market preachers to be utter dickheads?
Reply #8 - Oct 9th, 2017 at 8:58pm
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Wadsworth wrote on Oct 9th, 2017 at 8:56pm:
Free Market!  They must be liberals

Indeed.
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Re: Does this prove Libertarianismists/free market preachers to be utter dickheads?
Reply #9 - Oct 9th, 2017 at 9:16pm
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Patrick.


Please.

I think I won my wager against myself,  but Mr. West and Mr. TL may disagree.


.....the neofascist Re-education camp candidate scumbags....
  

Under Capitalism, Man exploits Man.

Under Communism, it's the exact opposite.
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