Oct
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In absence of central planning and governmental interventions, the production remains in the hands of independent, self-interested, profit-seeking individuals.
In absence of forced laws and regulations, the independent self-interested producers follow the natural laws of market that brings the uniformity and systematically accelerated progress in the free society where the wastage of resources reaches to minimum and overall production tends to reach to maximum and hence the common ills of collectivism such as extreme poverty, unemployment, class differences etc gets the proper remedies in the individualistic, free-society systems.
Whenever government intervenes in such a society by means of central planning and interventionism, the chain of progress breaks and the retardation takes place that brings the common ills of collectivism back to the frame.
Uniformity of Profit
Naturally, every body works to gain profits, everybody lives to sustain and comfort his life, profit is the only motive for a free individual to put up his endeavours in production and prosperity. Yet, the laws of natural anarchy also ride profits and that is the Uniformity of Profit principle. The principle suggests the natural tendency of a free-society towards establishing a uniform rate of profit on capital invested in all the different branches of production, be it steel production, grains production, oil industry, the shoe business or whatever. Profit, obviously is the difference between the sales revenues and cost of production.
The reason for such tendency of natural uniformity is the profit seeking nature of the free-individual. Investors prefer to earn higher rates of profits on their investment rather than the lower rates. That is natural, rational behaviour of man to seek maximum possible profits. Thus, other things being equal, wherever the rates of profits are higher, investors tends to invest their additional wealth, and wherever the profits are lower, they tend to withdraw their previously invested capital from those production sectors. The additional investment that thus reaches to any high profits providing production sector tends to reduce the rate of profits in that sector.
This happens because the additional investment increases the production and hence supply and availability of the products and that brings down the selling prices of the product. As selling prices reaches closer to cost of production, profit rates comes down. On the other hand, the production sector that initially was providing lower profit rates suffers lack of investment and hence lack of production and supply, which throws the prices of the products of that sector higher. As the selling prices increases, the profit rates of that sector also increases and hence, that production sector again becomes the higher profit providing sector. This rolling up and down of investments in various production sectors tends to bring equilibrium where the rates of profit in various production sectors tends to be uniform.
Benefits of Natural Anarchy
In a free-society, as the profit rates tend to be uniform, every sector gains enough investors. As every investor is driven by his profit seeking nature, he remains alert about consumers demand and that reduces the chances of malinvestment and hence over-production or under-production. The natural anarchy thus provides a balance between the production of all the essential products for our life and progress. Anarchy not only prevents but also remedies the mistakes of over-production or under-production if committed. If at the threshold of a high profit-rates providing sector, investors commits mistake of over-investment, it tends to over-production that decreases the rates of profit and hence further investment reduces resulting in lesser production and hence providing the necessary cure to the mistake.
Because of individual freedom and uniformity of rates of profit, each sector not only gains enough investors, it also gains enough human resources in form of workers, specialists, managers, entrepreneurs and inventors and that leads to over-all increase in rate of production leading to reduce poverty and scarcity at all fronts.
As natural anarchy tends to bring the uniform rates of profit for investors, it tends to bring uniform rates of earnings, wages and increments to the producers, workers and innovators involved in various sectors of production and services and hence establish a developed division of labour. Since, the free-society tends to bring uniformity of profits and earnings, the ills of economic inequality tends to reduce to minimal1
because of which, class clashes, casteism, racism, and other sorts of irrational discriminations are reduced and that brings the environment of natural freedom for each individual being free to use his talents and endeavour to pursue happiness by earning it honestly and freely. Thus in a free-society, natural anarchy tends to bring happiness and progressive increase in production of each individual.
Ills of Interventionism and Central Planning
The government by means of central planning or interventionism often dislocates the harmony of free-market and hence breaks the chain of progress bringing chaos to the society. In presence of government interventions in forms of subsidies, taxation, prohibitions, licensing etc, the profit motive looses its essence, and instead of learning and leading the way of natural profit seeking tendency, investors are forced to invest based on government’s dictatorial interventions. This dependence reduces the investors’ incentive to invest and hence causes lack of investment. In absence of profit motive, neither the government, nor the investors by themselves get any chance to check the threshold of investment and production and that causes loss by means of malinvestment resulting in over-production in some sectors and under-production in different. Also, by means of subsidies, stimulus packages and forced production, government creates bubbles of boom that tends to burst ultimately causing malinvestment that results in loss of production, lack of investment, depression, scarcity, wastage of resources, corruption and unemployment. As the government interventions destroy the division of labour, society suffers lack of freedom, extreme differences between classes, casteism, discriminations and overall underproduction that bring in problems of poverty.
Conclusion: In a free-society, market follows the laws of natural anarchy and that provides freedom, progress, prosperity and increase in the productivity and profits of the free-individuals tending to solve out the social ills if present along with preventing and curing the economical mistakes by means of profit motive that works as a thermostat or the invisible hand to guide the society towards cumulative production and provide the individuals means to pursue their happiness honestly and freely. Government interventions prove to be fatal, destroying the profit motive that is the only possible means of checking the malinvestment, over-production and under-production. This results in economic chaos, making the birth bed for various social-ills by destroying the division of labour.2
- Economic inequality based on freedom of individuals to exploit their own intelligence and talent is significantly less visible than the economic inequality that results because of forced planning or government coercion. The fact is greater freedom results in greater prosperity of whole society and less extreme width of economic inequalities, Freedom Versus Egalitarianism [↩]
- Division of labour is the essential aspect of a free, prosperous and ever improving progressive society, Division of Labour [↩]
30 Responses to “The Market Anarchy”
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shumit Says:
October 30th, 2009 at 6:41 pmThis is all reasonable, but even where you get a free market in terms of government control, the larger corporations will naturally seek to dominate and control as much of the market share as possible.
This will lead to a natural law and order or heirarchy set by the bigger fish in the pond as it were, and only the allies of the big powers will survive the competition that ensues as a result of the power mongering of the larger entities.
The government regulations seek to curtail one group becoming too dominant and controlling and tries to instill fair practice rules that allow smaller groups to survive. Yes, by your reasoning this is against ‘natural law’ but I also think that allowing one group to dominate and devour all else is detrimental to growth and development of the economy and society.
Regulation is required to ensure that the big fish do not cheat their way into more and more profit. Your policy of open and honest earned profits can only be maintained by regulatory rules. In my view, Human nature by itself is irrational and therefore can never be trusted to maintain the order and discipline required to maintain a true free market.
Unpretentious Diva Says:
October 30th, 2009 at 6:50 pmAs a matter of fact, its not the big or small fish that controls the market, but the consumers are the controller/kings of the market at any instance.
And I am not talking of Oligarchy that you are presenting by your assumed fears, I am talking of Free-Market.
Free marker cannot be destroyed by anything else but government and free market always throws out the corrupt/cheats out of the market no matters how big are they, only government supports and safeguards the corrupts. That is reality. And when government safeguards those corrupts, we do not call it free market, we call it OLIGARCHY, the rule of some big fish in the market.
Well again, its the consumers who decides what is cheating and what is not, and if there are cheaters, there obviously is the space for honest marketeers, and why do you think the consumers will chose the cheaters in place of honest marketeers?
US, India, China, Russia, UK, Germany, all of them are Oligarchy’s where the governments safeguards the corrupts.
In a free market however, the government is not the governing authority, but the king is the consumer.
Why do you think a consumer will choose a corrupt or cheat marketeer while there are free honest individuals to give him honest goods and services?
And if consumer will prefer good and honest marketeer, as any one can be a marketeer in the free market, how can the cheat and corrupt market sustain its consumers count?
Without consumers, how can a marketeer howsoever big he is, remain in profits? if no profits how can he remain big or rich?
Corrupt persons are thrown out of free market as natural rule, and they are taught the right honest way.
The natural tendency of free market is reduction of corruption and cheatings to ZERO.
So, obviously market will throw out the cheaters, specially when the property rights are well defines in a market anarchy, cheaters can simply not stand.
Although I agree it never reaches zero, but it certainly is minimal, and it is extremely low if compared to case of government regulated states.
And please don’t preach anti-corruption attitude of government, we all know that corruption starts from government and ends with government. A free individual cannot sustain in free society if he is corrupt.
Apply your mind, and try to find out how can a corrupt person sustain his life in free society? he simply cannot.
Don’t you see the contradiction in your claim?
At one hand, you say that human beings are not apt or able to remain free, or you cannot trust a human who is free, so you want everyone including you to be enslaved/regulated by government. But what is government? Is it comprises of some supernatural beings driven out of heavens to rule over you and us?
If you cannot trust an individual to be free, how can you trust some individuals to rule over you?
You need to check your premises.
shumit Says:
October 30th, 2009 at 8:48 pmOK, I take your point that by setting up a system of government regulation inherently requires people to populate that government. Therefore, the government is no more trustworthy than the individual who is a member or the elector of that government.
But that’s not really the point I’m concerned about. My concern is over the situation in any market where one member/group dominates and then decides the rules, regulations, conditions for everybody else. Once one is in power then their interest switches to keeping that power using any means rather than simply using a rational process to keep developing and making themselves the market leader by legitimate means.
I’m saying that if any one group or individual becomes too successful then they will themselves choose to maintain that lead by imposing their own rules, effectively creating their own impromptu, unelected government. Oil and commodities barons would be a good example of this. They are not elected governments but frequently create their own rules and enforce them within the rest of the market using cartels and other organised means to control the market and hence the consumer.
In such cases, the power of the consumer is negated by the corruption of the ruling groups.
Other groups such as national governments then contribute to the situation by supporting these cartels and other organisations in the hope of profiteering at the expense of freedom of choice of the taxpayer.
This in itself corrupts the whole system of free market *in the real world*.
I guess that in the ideal world and ideal free market, the consumer would always be able to choose another supplier and therefore would be able to counter the power of any group or cartel. However, this is not the case in reality and therefore it’s not possible to create a true free market in the world as it is today.
I don’t think you need a government to create corruption. You just need the will of one individual to choose to subvert any given system to maximise their profit and power using whatever illegal or legal means necessary. Others will follow due to human nature and greed and then you have a different type of enslavement due to an unelected regime or dictatorship. No government required.
Unpretentious Diva Says:
October 30th, 2009 at 9:13 pmOk good if you get the point, it’s the starting.
No matter how big is a company in a free market, how can it avoid other companies to compete? The current rival companies, and the possible future companies, anyone can start providing the production and services in that sector of the company. Why won’t any one else start a new venture to gain profits?
If you have a shop of sweets that is extremely successful, how can you avoid other free individuals to open up their own sweet shops and corners?
Now you surely can make laws on your property, but if those laws doesn’t align with the choice, necessity and taste of the consumers, why won’t they go to the other sweet producers and shoppers? They will certainly go to other sweet shoppers and you will loose your market, you will not remain big.
As a matter of fact, in a free market, there is no other way but to keep innovating ways to satisfy consumers and provide them better services, why do you think Ford is still surviving the extreme competition of automobiles?
And you think that others are sheep and goats who will let the successful one to loot them of their property and property rights?
That is simply not possible in any case. Specially when free market consists of free security services providers too.
On the contrary, major oil and commodities barons either represents monopolistic government or oligarchic governments, I am not talking of Oligarchy, I am talking of Free market.
True, government always negates consumers power,
Again you are wrong, in fact if there is no government, those Oil barons even cannot control oil market. Even oil market isn’t omnipotent. What restricts the free individuals to find out and exploit new oil wells? Government, it actually helps the Oil barons to keep the oligarchy up.
Government not only corrupts free market, it destroys it.
It is not the case in reality because there is government which restricts the individuals (from the consumers) to become another suppliers producers and creators.
Lol, Dictatorship is a form of government, in absence of government, there are no possibilities of any form of government including dictatorship.
In absence of government although, there remains no other way to get success but to be honest, hardworking competitive and innovative.
There is simply no other way, you cannot provide even a hypothetical one. You may try.
As for example, lets say a group of people (say a community of muslims in a city) considers that Jua (Gambling) is halaal (immoral).
They do not want people to engage with Jua (Gambling) in their community/colony.
Government police cannot stop it, because it doesn’t want to stop, and even if it doesn’t stop, it won’t loose anything, as Muslims are forced to pay the taxes no matters police helps them or not.
On the other hand, a private security company will surely stop Jua (Gambling) in that community. Why?
because if they won’t stop Jua, the community members won’t pay them, and they will be out of the market.
Now lets say that, that private security company is fraud, and it takes money from consumers but doesn’t provide the expected service/security against Jua, so?
What will the consumers do? They will simply employ another private scurity company, anyone can start a private security company in free market, he doesn’t require license from government.
Now take the issue of stealing.
You want to steal from others, but you don’t want others to steal from you.
But that is not possible, unless you subscribe to a security provider that ensures you that your property won’t be stolen and if stolen you will get your insurance money back. Why won’t another people not subscribe to insurance and security company then? They also want security against robbers and thieves.
In case of government police and government sponsored insurance companies, stealing can never stop, as no matters you are robbed, you will have to pay taxes to keep the monopolistic government and its police.
YOU HAVE NO CHOICE>
But in case of free market, you always have choices.
if the company you are subscribed to steals your money, and doesn’t provide you compensation too, then it looses the consumers.
Why will anybody subscribe to that company which robbed you? Won’t it rob them too?
So consumers will opt for new company.
Now you will say the private company will install laws like there can not be another company, lol that is not possible.
its something like, a sweet shoppers saying there cannot be another sweet shopper.
Its impossible.
As a matter of fact, only the honest, innovative and better survives in free market as in free market, capital remains moving, it doesn’t stop, it keeps moving to those hands which can utilize and produce from it further more and maximum wealth.
Unpretentious Diva Says:
October 30th, 2009 at 9:43 pmShumit said
Lol. trust me, I never meant that. What I mean is under government, natural, objective, rational laws cannot exist, under government the real culprit can never be punished, government is to safeguard the corrupt and criminals.
In absence of government, not only the rational, natural objective laws survives and sustain themselves, the criminals, cheaters and corrupts are punished well too because that is the nature of Freedom, only the hardworking can survive and gain success. The mediocre/looter/robber/beggar/cheater may survive in hidden ways, he cannot gain success.
shumit Says:
October 31st, 2009 at 6:39 amOK, I’m still not convinced that government always protects the corrupt and criminals, but that is indeed the way that most of the world works today. So, you’re right for that matter.
I suppose what you’re saying is that natural objective laws always exert themselves in the absence of formal government as people themselves choose to self-determine the way they lead their lives. This natural law will indeed give rise to power bases, which will ultimately change hands once the general populace decides that it is too big, powerful, etc. Wars and conflicts will also arise from this, but again the process itself will remain fair, as there are no limiting factors or protection for mediocre producers/dictators/powers which will ultimately fail and be replaced by more successful ones.
This is natural consequence and is fair to all. So I understand where you’re coming from. Your point about Oil and commodities barons is correct too. It is Government ruling that stops individuals from simply going to dig their own wells in the absence of fair trade from OPEC and other producers. The international Governments are only too pleased to accept kickbacks from this and other groups and give them their stranglehold on the market in return. You’re quite right.
Government and it’s laws (or indeed any ruling group and it’s laws) tend to try to protect all parties regardless of whether they deserve that protection and often they practice bribery and breaking the laws they themselves impose on others.
This is not natural or fair and is therefore doomed to failure.
Unpretentious Diva Says:
October 31st, 2009 at 11:43 amTrue, you don’t need to be convinced, in fact, government laws are meant to protect all, but then, government system is monopolistic, it doesn’t provide a rescue for the consumer if he is being cheated.
On the other hand, in a free market, there is no monopoly, even the consumer being cheated has total power to oppose the cheater and actually punish him. Free market provides him choices further than the choices available in best form of government that is democracy.
In free market also, free market is supposed to protect all but the base is only one, the protection should be objectively based, otherwise, the protecting entity looses market and hence suffers losses and that results in its end.
While in government system, no matters how corrupt the government goes, it cannot end, it is monopoly.
As a matter of fact, if there is a system of two-or-poly-political-parties system, the current government of political party working on corrupt ways may get evaded and defeated by the other party coalition in next elections (that is after five years) but even then, the new government gets a limit to atleast get as much corrupt as the previous one was, and even then the new government may cry that it is better and is more justified. In essence no government is actually never justified, they always are relatively justified.
On the other hand, in free market, every consumer keeps voting at every instance, but his votes are not the mandate papers, his votes are his owned pennies, every penny is a vote, and if a company looses the democratic free choice competition, it either changes its ways and become honest or it stops existing (as there is no other way).
Thus, free market ends monopoly, monopoly is impossible in free market hence corruption cannot retain for long. While in government regulated system, monopoly can never end. The point is, human nature or human beings aren’t irrational, but the concept of government monopoly, or any other form of monopoly is irrational as it ends all choices.
So do you realize that it is not the human beings or Human nature that is irrational but the system of monopoly (government monopoly in this case) that makes every thing seemingly irrational because of its own inherent irrationality?
As Free Market avoids development of any sort of monopoly, it actually reduces (to the extents of ending) the chances of irrationalities, although I do not claim that there can never be any chance of irrationality in free market, but such instances doesn’t stand for long in free market as it is self-correcting.
On the other hand, I feel conflicts will never reach to that extent to be termed as devilish wars of destruction in a free society, because each group/individual would be actually based on mutually beneficial agreement base. As wars never provide any benefit to anyone in any circumstance an each party looses, the conflicts would naturally be solved on mutual agreement base again without actually going towards violent wars in a free market.
But see the contrast in government system, aren’t we always face either a war or a potential danger of wars between the various governments because of their monopoly?
Examples are, WW1, WW2,Gulf War, Persian war, Vietnam War, Palestine conflict, Kashmir Conflict, Indo-pak war1, 2 and 3, Indo_china war and many many more?
Amol Naik Says:
October 31st, 2009 at 5:33 pmI partly agree to what Shumit has said in his first comment. Although, I can accept that free market to total liberalization would guarantee profit eqality and market equilibrium, it is hard to imagine if under-invested sector would thrive again according to the cycle you have explained.
In that case, not only that the workers/labourer involved with the sector would extinct, but chain-effect could pose a vicious cycle running backwards. A “clean” government, hence, must streameline the process of investements, regularize profit sharing mechanisms, and provide attention to under-investement sectors. Of course, you may argue that this distupts the market equilibrium, but I suspect that the anarchy you’ve spoken would ensure it either.
The liberalization is process. So, one may argue by formulating the so-called investment up and down as phase, but at the macro level it is exactly what is happening with the efficient/non-efficient hierarchical goverments. As an example, if the automated goods are coming at cheaper price tag now, they were expensive earlier. The hand-made goods are expensive now, but they were much cheaper when there no machines, with or without market anarchy.
.-= Amol Naik´s last blog ..Media Fetishes =-.
Amol Naik Says:
October 31st, 2009 at 5:46 pmAnother point that I would like to raise here:
As you’ve rightly said:
The fundamental idea that would govern the ideal market anarchy is “innovate or perish.”
However ruthless it may sound, it would be the only chance of business/ventures to survive, forget gowing. Now, in a product when innovation is both horizontal and vertical, it’s survival would not only depend on its own capacity to innovate, but also on the its vendors. Arguably, if one or more vendor fells to do so, it can bring down the entire value chain. How justifiable is that?
Innovation can be done in two ways, either in necessary and urgent way, comfortable and luxurious way. Think of how APPLE does it, when its survival does not depend on it, and compare it with any other computer manufacturer…
.-= Amol Naik´s last blog ..Media Fetishes =-.
Unpretentious Diva Says:
November 1st, 2009 at 1:10 amAmol Said,
In case of regular commodities and their demand/supply dependence, it is simply inevitable that the underinvested sectors would thrive again.
They need to thrive again because due to high demand and less supply, prices will go higher (it is as true as sun rises from east) and with increase in selling prices, profit rates will increase, and hence investors will tend to invest again in that sector to gain higher profits. (It is as true as Sun if a ball of Hydrogen gas constantly turning to Helium). Nothing can contradict it.
But yes, in some cases, the under-invested sector may never get a redumption and it may reach extinction, just like horse trading was a major business venture before petroleum and automobiles were invented and developed. Every person used horses to travel hence there was high demand in horse trading. Once people started using motor bikes, cars, scooteys, trains, ships and aeroplanes, thre horse trading business started depleting and it is now on the verge of extinction.
Nothing can help the business of horse trading, it cannot get investors, it is not profitable because there is no demand of horses. Would you like to buy a horse? for what? Now when you do not want a horse, why will anybody invest in horses?
Obviously, the workers, trainers and businessmen involved in horse trading will need to innovate their talent to find out new streams of work, they may become automobile producer, mechanics, car dealers, spare parts dealer and so many other jobs. THat is, although because of Development, a business sector reached extinction, the development created many times more opportunities for the workers to produce.
Now if you want government just to help horose trainers so that they may not feel the need to use their talent in some other works and keep living on the alms and begging which government provides on behalf of the taxes it loots from common citizen, than you are wrong, because that will cause destruction of human resource and wealth.
That was the most idiotic statement, i didn’t expect that much foolishness here.
ZFirst of all, government can NEVER BE CLEAN. Not because politicians are deemed to be corrupt, but because the nature of government is collective, and collectivism can never be clean, it is forgery and loot in any circumstance.
Now see, the sector of pot-making is at depletion, nobody uses earthern pots and vessels now, people use stainless steel, they use refrigerators and water coolers.
WHy do you want government to force investor to waste their money in earthern vessel making?
They will never invest in that, if government forces them, either they will try to evade government or they will bribe it, that is, any force on beahlf of government will give rise to corruption. There is no other way in a government system to live clean ,but to bribe the government.
If you want progress in mixed economy, bribe government and government officials, because bribing decreases poverty of poor masses.
Unpretentious Diva Says:
November 1st, 2009 at 1:15 amLol, lets say for the new car of Ford, there are some 10,000 dealers in India, and say 100 dealers fails to provide an impetus to the sales of new car, and 9.000 other dealers gets average success, while 900 dealers gets extreme success.
What way you think the profits of FOrd car will go?
And anyways, the producer is obviously responsible for his options to choose the correct vendors, it is fully justified, afterall he checks the potential of vendors than only employs them.
About your other erroneous issue,
Necessity is the mother innovation. And government doesn’t provide a comfortable zone for innovation, as a matter of fact, it restrricts innovation. On the other hand free-market competition provides the necessary comfortable zone for innovations. What more comfort can be there other than the success itself? A successful venture is at comforts, and that is why he can innovate further, if he fails, he is responsible for losses, and the other innovator entrepreneur will take the share of profits, that is how capital moves in free market, it remains in those hands only that can use it best to maximize the production and profits, because only than the society may remain free of scarcity and poverty.
If Indians are poor, it is because there is government. The more free an economy goes, the rich it gets, US economy is richer than Chinese or Indian economy cos it is more free, the total free-market is hard to see any sort of poverty and scarcity.
Amol Naik Says:
November 1st, 2009 at 3:44 amSo, a simple trade based on give-and-take relationship with marginal profit decided by the market anarchy is NOT a collectivism at local level? Is that also a forgery and loot. You see, your argument is biased because of what you’ve seen so far on global/macro level. At micro, it is still feasible to build a governance that is abided to ensure security/guardianship in all forms. Taxes, sur-charges, can that be not seen as payment of the survices the government provides you? Consider the utopic sitation, same as you!
Intelligence here, anybody?
The 2008-09 financial crisis was caused by mainly banking de-regularization initialted by President Clinton in 2005. Compared to that Indian and Chinese banking sectors, and in turn econmies were much more stabilized because security blanckets provided by respective government and not by markets. If you think that Americans are thriving on free-market philosophy, then why are they now relying on partialy nationalized banks, and “conservative” economies? Why did they NOT liberalized policies any more?
.-= Amol Naik´s last blog ..Media Fetishes =-.
Unpretentious Diva Says:
November 1st, 2009 at 9:19 amDo you really know what you are talking about?
You are talking of free trade, where no body is forcing you to do anything, and you are free to take your own action. How can it be loot? Who is looting you? you yourself?
And if you are looting yourself, should anybody stop you?
On the other hand, collectivism means that you are not free, no matter what you want, but you are forced to do only that which the collective allows you to do.
That is why collectivism is always corrupt, and free trade can never be corrupt, because in free trade, nobody is actually looting you, onemay cheat you in any case, but than, he will be punished in free trade individualistic system, on the other hand, in collectivist system, the cheater can never be punished, as the cheater decides the law.
My comments are not biased, they hold objective truth at all level all situations all time.
Unpretentious Diva Says:
November 1st, 2009 at 9:29 amLol and who told you that? By the way what do you think of Dollar or FED? isn’t it collectivist system? It is meant to perish and be corrupt, no matter government controlled deregulation or whatever. Furthermore, your knowledge of recession is extremely corrupt as it is based on the same corrupt idiots.
About economic meltdown, the site is full of such articles explaining the real cause of meltdown (which obviously were the Government regulations)
Enjoy increasing your knowledge
http://www.reasonforliberty.com/anarcho-capitalism/economic-meltdown-explained.html
It was government regulations and interference in market that caused recession of 2008-2009 or any other recession in past.
By the way there are atleast 20 articles on economic meltdown including discussion over every major nation (India, US, China, UK).
By the way what causes Inflation? What causes deflation? What is Inflation?
Now take my advice, before commenting anything further, try to read out previous articles.
You even cannot say why the Gold Prices were and are reaching sky heights.
http://www.reasonforliberty.com/current-affairs/fiat-money-versus-gold-standard-privatization-of-currency.html
Read that.
Other articles you must read before saying anything about recession are
a) http://www.reasonforliberty.com/current-affairs/capitalist-asia-socialist-usa.html
b) http://www.reasonforliberty.com/current-affairs/falling-prices-is-the-cure-of-deflation.html
c) http://www.reasonforliberty.com/current-affairs/china-india-and-call-for-free-market.html
d) http://www.reasonforliberty.com/economy/economic-crisis-and-fiscal-stimulus-by-government.html
e) http://www.reasonforliberty.com/current-affairs/satyam-scandal-the-mixed-economy-scam.html
f) http://www.reasonforliberty.com/economy/the-dilemma-for-reserve-bank-of-india.html
g) http://www.reasonforliberty.com/current-affairs/governments-help-for-the-economic-crisis.html
h) http://www.reasonforliberty.com/current-affairs/an-enemy-of-capitalism.html
i) http://www.reasonforliberty.com/anarcho-capitalism/division-of-labor-productivity-prosperity.html
j) http://www.reasonforliberty.com/anarcho-capitalism/freedom-versus-egalitarianism.html
k) http://www.reasonforliberty.com/anarcho-capitalism/mixed-economy-or-interventionism.html
l) http://www.reasonforliberty.com/current-affairs/indian-health-care-an-overview.html
And allot more.
Why do you think you can comment on anything related to recession without actually knowing and checking on the base of rationality the real reason of recession?
Recession is and was the direct result of government regulations and nothing else.
ONE last thing for you Alok,
Shumit never agreed with you, or better say you never agreed with Shumit, both of you are opposite to each other completely.
What he was saying is, government may be necessary to confirm that market competition will remain intact, that the succesfull businessmen may not try to not to let new competitors to compete.
On the other hand, you were saying that government should be there so that there may not be any competition, because according to you competition is wrong.
Shanu Says:
November 1st, 2009 at 10:07 amAmol,
1) It is naive and childish to assume that a group of individuals can regulate something as complex as the economy. No sensible person can hold such a notion.
2) I don’t know what you mean by deregulation. The deregulation many economists talk of is an entirely different type of deregulation-In comparison to what Free Market thinkers would have called deregulation. It is not deregulation to permit banks to take risks guaranteeing Government insurance. Deregulation in the right sense would mean the establishment of a free market economy. Nothing like that happened in the United States. The problem has more to do with Government manipulation of money and credit than regulation or deregulation.
crusader Says:
November 5th, 2009 at 5:03 amhi unpretentious diva, I want to bring to ur notice one very basic thing which u r lacking in.The society u r talking is more of a possibility where in which population is very less(possibly in thousands only), everyone got good education,leading a happy & filled life( filled in the sense with material interests),no responsibilities or burdens lagging them,not even starved for a single day,those who know the value of money to invest but don’t know the value of a penny to save etc etc.They may be donating something to charity but that too only for tax concessions.
What u r talking is just an illusion , nothing sort of a reality.Its sounds like an extremism.Everything people owning, evrythng people wl decide…… thats not possible dear. there wl be some idiots & stupids in every society which we cant ignore.Who wl punish them? who wl regulate the vested interests? who wl act like a guardian of citizen’s rights? There is someone above everyone. That is the common need & point in setting up of govt’s in any society.
Whether they are malfunctioning or well functioning depends upon the mental state of people in that society.So kindly be optimistic & use ur ultimate knowledge( i came to know that u possess that) for the goodness of the society by setting up good, better & best govt’s but not moving away from the govt’s.
Our sense of discrimination & wisdom must be useful to the society at a large but not INSULATE PEOPLE FROM THE SOCIETY (as u feel & write).
regards
CRUSADER
Unpretentious Diva Says:
November 5th, 2009 at 9:19 amWell crusader, I am not lacking anything, rather you are the one who is lacking the proper idea.
The kind of education you are talking about is absolutely redundant and wastage, sincerely nobody needs it, it is nothing but indoctrination by the state and you are also a sufferer of that. Education doesn’t confirm happiness, there’s a big lot of well-educated unemployed mass, and just some months ago a group of well-educated youth performed the massacre at Hotel Taj. So you see, it’s not the kind of education one needs to be happy.
On the other hand, in a free-society, the individuals will get that rational knowledge and education which they really require to be happy, productive and prosperous by means of free education market and the division of labor. As explained earlier in this article and in the next one too, the collectivization of money always brings wastage, corruption and reduces the possibility of provision of services. The reason why in India people still are uneducated is the fact that Government intervenes in the Education Market. It is not as profitable as it should be, and that is the reason why it is not providing that much servi8ces which are required hence people are uneducated.
You need to read articles about education here- http://www.reasonforliberty.com/education/education-for-all.html
Read this article too and the comments, because there also someone put up similar kind of irrational comments like you did here http://www.reasonforliberty.com/objectivism/failure-of-democracy.html
And this too- http://www.reasonforliberty.com/government/abolition-of-cost-is-cause-of-corruption.html
Now second thing is of Population, do you really believe Population is a problem? Now that is the consequence of bastardized education you are a victim of. Government always victimizes people with such propagandas. You need to read this article to actually understand what is the proper problem of population and how it can be solved, what is poverty and how the problem of poverty can be reduced. Please read this— http://www.reasonforliberty.com/economy/population-poverty-and-production.html
If you will remain unbiased and will use free mind, you will realize that it is government and nothing else that is forcing poverty on the populace. In a free market on the other hand, poverty won’t remain to these extreme extent which we suffer under government.
Now about who will punish the defaulters? The Market punishes the defaulters. A free society certainly provides its own functional judiciary and security services too, afterall, it is a function of service market. Government is never required for that.
You need to read these articles- http://www.reasonforliberty.com/current-affairs/the-prospects-of-private-judicial-system.html and this
http://www.reasonforliberty.com/anarcho-capitalism/defending-anarchy.html
By the way whom do you want to punish?
if a person fires his own house, it is his right to do so, he can do whatever he wishes to his property. On the other hand if he tries to sabotage or harm any other person’s property, he will be punished, the owner of that property do have right to safeguard his property, he may punish him by himself, otherwise there are the private judiciary system and the private security and insurance firms too.
Crusader, trust me, you need to learn a lot, right now, you are like a child who just came to know about alphabets and is not ready to accept that proper sentences can be made by those alphabets.
Government niether is necessary, nor we can afford it. The reason for our poverty and the common ills of our society is ONLY GOVERNMENT, not the population, but the will of certain crooks to control and enslave the populace.
Why do you like slavery this much that you even do not find it viable to be free?
Its extreme sense of slavery that have been indoctrinated in you by the corrupt education of state.
Anyways, I will suggest you keep reading as many articles here as you can. You will find that each article stands on undeniable reason. You cannot refute them.
ranjit Says:
November 9th, 2009 at 12:52 amCrusader,
can you please explain what would be a best governement according to you will be like? and what does it take to have a best government?…just think over it yourself (pleae dont quote about famous philosophies, authors etc) and try to think out of box and avoid being emotional…just start the thinking process and you ll reach where libertarians and anarchists are now
Anarchy doesnt insulate person from society, infact it encourage people to have more interaction…one may see market as place where people buy and sell…but many (non)thinkers fail to see they are interacting though the langauge and media are different…clamping over market itself is discouraging interaction and insulating the persons from society…the mature the market is the higher degree of division of labour and higher the interaction
crusader Says:
November 9th, 2009 at 9:47 amdiva,I definitely agree to everything u said. But see the reality. You are just focussing on myths(yet to become realities) atpresent.
I still stand on my words in the earlier comment “The society u r talking is more of a possibility where in which population is very less(possibly in thousands only), everyone got good education,leading a happy & filled life( filled in the sense with material interests),no responsibilities or burdens lagging them,not even starved for a single day,those who know the value of money to invest but don’t know the value of a penny to save(for future needs)etc etc.They may be donating something to charity but that too only for tax concessions.”
Until & unless everyone there is totally aware of the thing happening around, ur idealogy can’t become a reality.But many people (am concerned about INDIA) are still starving, still struggling to make their both ends meet, still dnt know that a person can have all these in his lifetime, still running for the day,still don’t know wat & y they are working for. That’s the pity state of the country today & HOW CAN U EXPECT THEM TO BE GOVERNED BY THIR OWN TERMS? Can u justify it?
In these conditions, dnt we need an elder brother like government to take care of us? We keep on appreciating every social worker & every NGO organisation. But remember, THE GOVERNMENT IS THE LARGEST CIVIL & SOCIAL SERVICE ORGANISATION (if properly functioned with will & determination.
Lets try for that, not blaming & moving away from it.Infact DEMOCRACY itself guarantees individual liberty (liberty in the sense THE FUNDAMENTAL RIGHTS BESTOWED UPON BY OUR CONSTITUTION).I cant understand else what liberty u r talking about. Be optimistic yar. no one is tieing or beating u daily.
We are living in the best of all possible worlds. never forget that simple fact.
ranjit Says:
November 9th, 2009 at 2:38 pmcrusader
first of all you are emotional…thats what i find out from your post…i think you haven’t read my reply to your previous post or simple ignore it coz you refuse to think…
what makes you think people cant govern themselves?…take your own example…cant you make out what you want…cant you make out how to work and earn…how to interact with neighbors…how to help others?…don’t you know how to save…how to spend…don’t you know how to dream…how to defend…finally how to live?…even the least educated person and the poorest one also know these basics…why do we need a government for this?…why do you need your big brother to tell you how to live?…
constitution guarantees individual liberty? fundamental rights and constitution?do you know that there used to be a fundamental right called right to property when the constitution was written?…and it was later removed from the list of fundamental rights…see your big brother can change the rights at his will…and you comfortable assume that hes your protector of your liberty…don’t you come across movies been censored and many movies been forcibly scraped…isn’t it against freedom of expression?right to equality..the same constitution discriminates people based on caste and religion..example reservation quotas…right against exploitation…what are taxes?…
what else liberty you want?…thats what you have asked..right?…first of all government don’t give you the fundamental rights it promises…now imagine you want to build a house…its your house and you can build it the way you want…but your government says the plans to be approved…an architect is needed for design…you have your capital and want to start a business…any business…you need to run around government buildings for approvals…its your capital your business but still approval is needed…you have money and want to import a car or some luxury good…you need government clearance…if you are a shopkeeper you cant be open after 11 pm…why cant you have weapon and need a permission for it…why do one need to go to jail for having drugs?…where are your liberties?…aren’t these violations of liberty…i haven’t even start talking about law and order…
get out of the illusion of goverment
crusader Says:
November 10th, 2009 at 2:15 amI dnt want to argue with persons who dnt have a multi-dimensional thinking & divergent views.
ITS TIME TO BRIDLE THE LEAPS OF TECHNOLOGY TO ETHICAL BOUNDARIES. kindly keep this in mind.
Kindly note that the right to property was removed keeping in mind the land reforms.A person with his muscle & money occupied 1000 acres of land & another with his hard earned money can’t claim even 100 yards even after working for his entire lifetime. (Remember blood & sweat can’t claim crores)But appropriate justice is needed to be delivered.
Till now the movies or books banned by the govt. are those which created controversies & seem to be national hazards. Ours is a value-based society. Dnt forget our tradition & culture.As intellectuals, u need to support & struggle for them, not fighting against them.
Answer one simple straight question: can u show a porn movie to your kids instead of comics? If everything is made free & that available, we have to hung our head in shame.We cant even imagine the way society is functioning.
Next, if every individual is blessed with a weapon, no one can sleep happily in that society.Y not think vice-versa? no one will be having any harmful items. Thats sounds fine……
Next reservation: Am not a beneficiary of those quotas. Am not in the reservation net. Yet I feel its okay to some extent. The reason is instilling confidence in those deprived sections who are kept away for generations.Thats a grave injustice done to them.Reservations in some way are making them come forward to be active in the civil society.
To maintain a just order & peace + harmony in the society, once again I swear that an elder brother is needed to bless us & punish too when needed.As already said, there wl be idiots allover.We cant ignore that.
THE GOVERNMENT IS THE LARGEST CIVIL & SOCIAL SERVICE ORGANISATION (if properly functioned with will & determination.)—-this is a very dynamic sentence.Assimilate if u can.
Lastly,Nature didnt bless any paricular individual to have uncountable money, access to all luxuries,access to all its natural resources etc etc.
All are equal before nature(before law & before God too).Whenever someone tries to move against the principles of natural justice,it nullifies the effect in some way or the other.This has to be kept in mind of each & every individual.
Unpretentious Diva Says:
November 10th, 2009 at 3:36 amAs a matter of fact, only you are unable to have a multidimensional thinking.
Land reforms doesn’t need government, and most of libertarians support Land reforms. property rights are must for Land reforms, without property rights there can be no land reform.
As a matter of fact you are being fooled by government and the indoctrination you are suffering from.
Why don’t you try to look for what Land reform actually means by prominent economists like L.V Mises or Rothbard?
Anyways, when you do not want to explore the truth, than suffer your fate.
even after all those fake land reforms, farmers are committing suicide, aren’t they? And the cause of their deep frustration is the same Government. They have no right on their property to make best use of it.
Actually, your inability to have a multidimensional thinking is making you and them suffer.
about your blame of MYTHS.
Its you who is living in myths and illusions while ignoring the simple facts and truths.
Myth cannot reside on reason, my arguments are based on reason, they aren’t myth. They are not being applied yet because the MYTHS are still ruling over you and me and all others, we still are slaves and are being exploited, it doesn’t matter whether exploiters are Britishers or Indian politicians, we still are slave, not free.
And we need to be free.
ranjit Says:
November 10th, 2009 at 5:25 amCrusader
multi dimensional thinking lies in everyone looking after themselves…uni dimensional thinking lies in everyone thinking that government will look after them…what’s the difference between a kid and an adult when adult when adult refuse to look after themselves and depend on government?
i recommend you visit http://www.mises.org you can find loads of literature regarding philosophy, history and economics.please read them.for some Indian commentary you can visit http://sauvik-antidote.blogspot.com/.
@Diva
on a lighter note
don’t include people like crusader when you say “And we need to be free”. they don’t want to be free. beauty of anarchy is even these want to be slaves can get what they want. there will be service providers for who want to be slaves. alternative lifestyles
shyam Says:
November 29th, 2009 at 4:10 am@diva
“Land reforms doesn’t need government, and most of libertarians support Land reforms. property rights are must for Land reforms, without property rights there can be no land reform.”
No Austrian-minded person would ever support ‘land reforms’. Property rights, yes. Land ceilings, no. Vinoba Bhave’s land reforms were evil and were a code word for ‘land ceilings’. It has proved to be a hindrance for attaining economy of scale and deployment of modern technology. India has low farm productivity because of that. It also prevented migration of farmers to better paying jobs in industries. And now farmers are committing suicides because their small lands don’t produce enough.
@crusader
The government’s policy of license raj, land reforms, inflation and regulations is solely responsible for the endemic poverty and corruption in post-independence India. By preventing free markets from operating, it has caused more than half the population to live below poverty line. Is that freedom? Charity can only be given by producers and savers. The government does not produce anything. It merely takes from the productive and gives to the unproductive after taking it’s cut in form of bribes and wages. While it pretends to help the poor, it creates inflation. Ultimately, it robs the poor and middle class much more through inflation than it helps them. (The government does have a role to play in military, foreign policy, justice etc but not in economics. Interventions only increase poverty and inequality.)
.-= shyam´s last blog ..Peter Bernholz: Has the US Reached The Hyperinflation Tipping Point? =-.
Shanu Says:
November 29th, 2009 at 8:33 amShyam,
“No Austrian-minded person would ever support ‘land reforms’”
Ever read the views of Rothbard, Hoppe or Block on this subject? Aren’t they Austrians?
Government is not necessary for Military or Justice. All these services could be provided by free individuals.
Unpretentious Diva Says:
November 29th, 2009 at 8:46 amI am sorry to say but you are wrong. No Austrian economist oppose the idea of land reform. Although, they may differ at the process of land reform. Obviously, no one suppoorts the process which the current governments follows.
Ludwig Von Misses states in “Economic Freedom And Interventionism :
That is, the free market itself is a natural way for land reforms (or any other sort of property dispute reforms).
On the other hand, Rothbard writes in “Egalitarianism-As A Revolt Against Nature” that
Or of the man who might be the current possessor by purchasing the land from Henry Jones X? If Smith and his descendants are lost to antiquity, then title to the land properly and legitimately belongs to the current Jones (or the man who has purchased it from him), direct application of our theory of property titles.” “Suppose that centuries ago, Smith was tilling the soil and therefore legitimately owning the land; and then that Jones came along and settled down near Smith, claiming by use of coercion the title to Smith’s land, and extracting payment or “rent” from Smith for the privilege of continuing to till the soil. Suppose that now, centuries later, Smith’s descendants (or, for that matter, other unrelated families) are now tilling the soil, while Jones’s descendants, or those who purchased their claims, still continue to exact tribute from the modern tillers. Where is the true property right in such a case? It should be clear that here, just as in the case of slavery, we have a case of aggression against the true owners-the true possessors — of the land, the tillers, or peasants, by the illegitimate owner, the man whose original and continuing claim to the land and its fruits has come from coercion and violence. Just as the original Jones was a continuing aggressor against the original Smith, so the modern peasants are being aggressive against by the modern holder of the Jones-derived land title. In this case of what we might call “feudalism” or “land monopoly,” the feudal or monopolist landlords have no legitimate claim to the property. The current “tenants,” or peasants, should be the absolute owners of their property, and, as in the case of slavery, the land titles should be transferred to the peasants, without compensation to the monopoly.
So you see the point?
Renegade Division Says:
November 29th, 2009 at 10:00 am@Shyam said:
Actually no Austrian person would argue about ‘land reforms’ without defining land reforms first.
If government is redistributing private land -> bad land reform.
If private land is being returned to original owner which was redistributed by the govt -> good land reform.
If govt land is being given away to private homesteaders like Dharavi given to the respective slum dwellers -> good land reform.
and so on.
shyam Says:
November 29th, 2009 at 1:22 pm@renegade division
If you read my post, I did define ‘land reform’ (in quotes) as ‘imposition of land ceilings’. IMHO, this is also the definition that most Indians understand because of the various land reform acts.
But if you define ‘land reform’ as right to private property, then I do agree with you. However, as I stated, ‘land reforms’ in India have a particular meaning because of the land reform acts by central and state governments.
Let me state the question in more obvious terms-
Do you support or oppose ‘ agrarian land ceiling’ in India?
@diva
I do not agree with your example at all.
“Suppose that now, centuries later, Smith’s descendants (or, for that matter, other unrelated families) are now tilling the soil, while Jones’s descendants, or those who purchased their claims, still continue to exact tribute from the modern tillers.”
Smiths do not have to till the land at all. They are free to become software engineers or blacksmiths or acquire the land by paying a market price. And how do you know that Jones acquired the land centuries ago through coercion and not by paying a legitimate market price? Who will decide that?
@shanu
Please show me the overwhelming support for land ceilings by the various authors you cite. In India, ‘land reforms’ have always meant ‘agrarian land ceilings’.
.-= shyam´s last blog ..Peter Bernholz: Has the US Reached The Hyperinflation Tipping Point? =-.
Unpretentious Diva Says:
November 30th, 2009 at 3:45 amNo Objectivist can think or support for any other Definition of Land reform.
Let me explain this clearly, we do not represent any collective group known as Indians or Bhartiya or whatever. We are Individual Objectivists, we talk of various issues in objective perspective with NO subjectivity about it. Land reform simply means the allocation of land (property rights over it) to the genuine owner and that means privatization of natural resources, including forests, rivers, canals and all possible natural resources basically usable as means of production, obviously Land Reform is strictly based on principle of Homestead. Thanks to John Locke!
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