Nice to see this channel pass the million subscriber mark! It will be two million in no time. Thank you always for the great content and well spoken words. Each one is a treasure.
You are awesome at what you are doing here. I wish I had the money to help support you, but I'm told that I owe the government a few thousand dollars because I made income this year.
Jaidenati Yes. He was asked for that when he started making money in a way that required use of public infrastructure requiring maintenance . His implicit response was yes, I do consider the cost needed to maintain these roads worth the deduction from my salary, for else I wouldn't earn it in the first place. Just a general pointer, if any socio-economic position you hold comes to the conclusion that fucking *roads* are a bad thing please start questioning whatever inane bullshit you're currently believing.
The earned income credit was an awful deal and the real world outside today would undeniably be different if Friedman's Negative Income Tax would have been implemented instead. Rather than Free To Choose the US got stuck with Pay To Play corrupt policies again. Why should I be forced to pay for drugs to be illegal? Why should anyone, much less everyone, without informed consent? The only sense that makes is nonsense. The war on drugs was never about drugs though. There are two markets, political and economical. The political one is the black market and the economical is the one we see before our eyes everyday all around US. Nobody spends somebody else's money more carefully than you can yourself. The Federal Reserve should be abolished along with all formats of licenses (medical & auto too) as well as insurances that match. Bad job creation from the hill and all that. Where has everyone been at? We are governed of the people, by the bureaucrats, for the bureaucrats. I demand that Congress and POTUS be replaced by an app, STAT! The only thing you know is that you know nothing. just like everyone else including me. Lots of people have opposing positions, none more valid than another. Carpe Diem.
You define a free market in terms of free decision making "as long as they do not initiate force or fraud against others". How exactly is this condition to be enforced if not by manner of laws and regulations?
2:40 The problem with free markets, at least by the definition used here, is that they require a state to defend; they might arise spontaneously but require some level of top-down control to maintain. Without the threat of state violence (whether that state is a government or a private security company; both would fit either Marx or Weber's definition of the state), no capitalist economy would successfully function, as the owners would not be able to defend their claims to property by themselves. Individuals or groups of workers would just take what they wanted from the property owners. We can see this in history: the rise of city-states was primarily a result of the need for neolithic people to defend land claims, as agriculture had just taken off and many hunter-gatherers still existed who didn't recognize or respect this property. I like the idea of spontaneous order, but its not compatible with capitalism. Maybe mutualism, if you want to hold on to free markets. Cooperatives could be considered forms of spontaneous order, formed from voluntary individuals freely associating, creating products to trade on a free market.
One thing is missing tho. You have to include that this form of coercive control is applied in such a way that by using taxing, a gubment can have leverage over the price of the goods and services being traded. The provider of the goods and services, being motivated to sell and having control over the abundance can be easily destroyed with this leverage. Just increase tax and the provider will be forced to drive down prices. A given government can take goods and services for free using tax too. Socialism failed because during it, only a small clique was allowed to practice capitalism. The establishment method was updated since. Allow everyone to practice capitalism while a government imposing taxation. It's a win win
During wartime centralized planning works extraordinary well (ex: world war II). It's something to do with depending on others to make/maintain a life worth surviving for. However during peacetime it seems to become everyone for themselves. It seem nothing inspires mankind more to cooperate with each other than death knocking at their door.
Yeah because only central planners would be dumb enough to start a war. A top down system isn’t really co-operation, its coercion. Really, it’s slavery.
Pair this video with the one comparing free market entrepreneurs and political entrepreneurs and you've got something going on. the only role government has is to "keep the peace" among those participating in the production of spontaneous order, and this peace-keeping mission itself must needs be produced in a spontaneously ordered manner by those over whom this order, that is, order of peace-keeping mission, shall be imposed. That is to say, even a beneficent government cannot be so should it be an imposition.
"State is the name of the coldest of all cold monsters." Friedrich Nietzsche There is a vast difference between Assistance and Overseeing, and governments make no distinction between the two...
+SeftR Yes. The core idea of spontaneous order, popularized by Hayek to say about the markets, are used to explain a lot o things also in the natural sciences. Hayek said that these ideas, originally developed by the scots, served as inspirations even for Darwin's theory of evolution by natural selection. And Hayek, to develop his ideas, much loaned from the studies on biological evolution and the incipient cybernetics. Today, these ideas are being used, for example, in ecology: papers.ssrn.com/sol3/papers.cfm?abstract_id=2501745 "The notion of a spontaneous order has a long history in the philosophy of economics, where it has been used to advance a view of markets as complex networks of information that no single mind can apprehend. Traditionally, the impossibility of grasping all of the information present in the spontaneous order of the market has been invoked as grounds for not subjecting markets to central planning. A less noted feature of the spontaneous order concept is that when it is applied to ecosystems it yields a reasonably strong environmental ethic. Thinking of ecosystems as spontaneous orders generates a presumption against interfering with their natural functioning in a manner that results in anthropogenic species loss. Such a presumption will permit some interventions in nature while precluding others. Environmental ethics could potentially make valuable use of the spontaneous order idea, without necessarily endorsing its traditional application to markets."
+SeftR Well the market is a self-selecting organic system based upon economic competition - a very Darwinian institution. So yes, it is very analogous.
Have you done a video on the drug war around the world yet? 'Cause that would be awesome. Also, watching your videos makes me feel like I need to read books.
In population ecology there is a pattern that plays out where populations follow a sine wave. When a species is left unchecked they can quickly grow only to exhaust their resources and collapse. This tends to impact the entire ecosystem where it could take decades for a new equalibrium to be established. The same is true with free market systems, when left unchecked there is market failure. Trying to exert complete control over the market never works for the reasons listed in the video, however, we've learned through trial and error that certain trends preceed a market failure and government can be used to prevent or minimize that failure. Government can also restrain the market to achieve non-economic goals such as clean air, social policies, etc. The key is to find the proper balance of intervention and free market policies. where that balance is depends on what you think the role of the government is and what type of society you want to live in. The extremes, which few people really want, are anarchy and totalitarianism.
+gobblox38 'When a species is left unchecked' You fail to mention the prior action or occurrence that must have taken place to incur the possibility of a species going 'unchecked'.
Yes indeed..social policies, let's see where that leads..face masks..no rights to work..lockdowns.. no right to travel..fear. Restrain the markets.. control resources..hmmm in 2030 you will own nothing and be happy..aka the great reset.gobal warming etc. Oh yes central government will do all this "for the greater good". I'll have my spontaneous order any day over centralized control...where I think for my self and take responsibility for my actions.
I take a number of issues with this video, (and with Austrian economics in general, which this video is clearly partial towards). 1. The claim that prices convey information efficiently is a logical fallacy. I've written about this elsewhere, so I'll refrain from explaining unless asked to elaborate. 2. The video incorrectly defines 'socialism' as the government operating all production, which was not the intention of Marx or its other founders, nor is it the goal of modern-day socialists. Socialism is better defined as a system in which decisions made about production and profits are made by everybody involved in production (and sometimes consumers as well) rather than just a very small number of employers. This can be top-down (if the government is deemed to be an adaquate representation of workers, although usually it isn't) or it can be bottom-up (as in firms that are organized as worker cooperatives rather than capitalistm firms). To date, most countries claiming to operate a socialist system would really be better described as "state capitalism," in which the employer/employee relation stays the same, except the employer is now the state instead of a private person. 3. The video is indicating that socialist (read, state capitalist) countries have not done very well, but this is false. In the case of both Russia and China, these nations were able to convert from a primarily agrarian and illiterate society into the world's second super-power in 50 years. I could be wrong, but I think those are the fastest episodes of economic growth in all of recorded history, and they were both accomplished under top-down systems. 4. Although it's true that systems like markets exhibit spontaneous order and structure, there's really no reason to think that the natural processes that these structures end up operating will be beneficial to society. An analog for this might be what you would call "design flaws" while studying evolution: vestigial organs, and ather maladaptive problematic tendencies that are endemic to natural selection, because there is no process to solve these problems. For instance, free market capitalism has a well documented tendency of transfering wealth from the poor to the rich, and has no process to reverse this. Just because an order is spontaneous, there's no reason to think that system will be sustainable, equitable, or otherwise morally tenable. 5. Although the free market capitalist system appears to be one in which all power and control are given to individuals, in reality it's not. Far from being unplanned, large corporations are in fact planned from the top-down. Austrians would say that it is individuals always who are making the choices, not the company itself, but this is only somewhat true: most companies have a very small number of people making all the decisions, and the rest of the people must obey them. Sure, those people have the choice to quit and get another job, but then they'd just face the same situation at a different company. They don't have a real choice, because they *must* participate in the system, or else die. How that isn't "coercion" is beyond me. 5. Even if you thought top-down control was a bad thing (which I don't), that's not the only way in which a government can operate. To acheive spontaneous order, all you need is that individuals make choices that make sense for them. A government could still intervene by adjusting what the set of choices are, towards ones that do better for society as a whole. It could even intervene by adding more choice, for instance by breaking down monopolies, or improving the safety net so that employees aren't afraid of starving to death if they quit, and are thus more free to choose to look for a new job. There's no reason that the government must intervene by determining the outcome of every decision.
Since writing that I have discovered this page, which ought to keep you busy for quite some time: socialdemocracy21stcentury.blogspot.com/2012/06/debunking-austrian-economics-101.html However, there are many reasons why prices do not necessarily convey information about the real circumstances underlying the economy. For instance, for that to be true, it would have to be the case that nobody has market power, and that no forces in the economy tend towards market power, which are fairly self-evidently not the case. It also only applies if firms everywhere face rising marginal costs, but empirical studies shows that they don't; most firms aim to operate so as to have flat marginal costs so that they can quickly respond to spikes in demand without increasing prices. But even more fundamental than that, it doesn't apply to any market where the supply and demand curves are not independent. Suppose that an increase in production leads to a fall in the price of gas. This will reduce the income of all the people who produce gas, and this will reduce their consumption of everything, including gasoline. This will reduce the demand for gasoline, shifting the demand curve and putting downward pressure on the price. So, a change in the supply curve caused a change in the demand curve, meaning there is no equilibrium price. It's possible that this could become a negative feedback loop, further reducing output, employment and income until the market is depressed for no real reason other than hysteresis.
"Suppose that an increase in production leads to a fall in the price of gas. This will reduce the income of all the people who produce gas" A fall in the price of gas would not reduce the income of all the people who produce gas, this is because as the price of gas falls the demand for gas goes up and therefore more gas is sold. That is why people strive to get prices as low as possible because the lower the price of their product the more product they will sell. People would not strive to lower prices if it lowered their income. And I was going to go on to the next part but it all seems to be based on this fallacy.
"A fall in the price of gas would not reduce the income of all the people who produce gas, this is because as the price of gas falls the demand for gas goes up and therefore more gas is sold" There are two parts to your statement: 1) a fall in the price of gas will increase demand for gas, and 2) the increase in quantity purchased is enough to offset the income from a fall in price. Neither of those are necessarily true. For one, it depends on the elasticity of demand. If the price of gas drops $0.01, how much extra gas will you buy? For a large number of consumers, potentially the majority of them, the answer will be zero. They'll still buy just enough to fill their tanks based on their current commuting patterns. Yet a $0.01 drop in price at the same quantity is potentially millions of dollars of revenue to a producer. Also, the reason that producers strive for lower prices is not to increase demand, but to increase market share. If it's a competitive market, then raising your price will make your customers abandon you for your competitors. But if all the producers raise their prices, then there's nowhere else for customers to go. And, if it's not a very competitive market then you can raise prices and your customers have no choice but to stick with you (until they are able to substitute to a different good or service to fill whatever need you're serving).
Obviously your model is flawed because it is not supported by real world phenomenon. Your model predicts a negative feedback loop, but obviously the price of gas and other goods fall all the time without causing a negative feedback loop
Yeah, that's just it though private property is a involuntary coercive institution and involves centralized top down control in order for markets to even function.
+GoldenEye50 Yes. No one ever doubted that was necessary institutions to the functioning of the spontaneous order. The stablishment of the private property and abstract rules is needed. But inside these institutions, through this laws, the man is free to act, and acting (in his own interest) generate this order, which is "the result of human action, but not of human design" - "design" = deliberate intervention in the motion of the single elements of this order.
Historically people have been treated like property. Hence the institution of slavery. It can be said that our bodies are property. In a free society, the key difference is the only person allowed ownership of your body is you, the individual. No one else has a right or mastery over you. Each is his own sovereign. Your organs for example. Only you have the right to sell or transplant them to another person...depending on what country you live in....In a slave society, self-ownership is not a property right that is respected. Or perhaps it is more accurate to say: not distributed equally to all persons?
Corporations are not into free markets and are not democratic.. they naturally grow into centralized monopolies to maximize profit for shareholders (and human rights are not profitable) if the government is too weak, democracy and the free market would fail
"Big government" fails, not because the leaders are necessarily corrupt, but because they cannot effectively plan for millions, or even dozens of people, but one person can generally plan well for one person. Kudos. I guess government should be relegated to finding when one person's plans are to harm another or society as a whole, and make a plan for that person.
Corruption by greedy people and groups destroys every system, even "free" trade / enterprise. Humans prevent this freedom, though often proponents of each system do not mention the corruption.
Freemarket is only possible among free people "SO LONG AS THEY DO NOT INITIATE FORCE OR FRAUD". The force and fraud part is the purpose of government regulation; to protect people from force and fraud. Most people who argue for less regulation are those who intend to use force or fraud and those who have been blinded to defend them.
Isn't that ironic tho? Government is essentially what causes fraud and force to protect people from fraud and force. It makes government paradoxical in nature. It cannot protect people from fraud and force when it uses the same thing. It invalidates its own existence therefore making it unnecessary.
The tendency of libertarian capitalists to assume that spontaneous organization is always good, is much like the hippie tendency to assume that all natural things are good. In both instances, it only requires a couple steps back, to see the error.
One sided look on the topic. Praising spontaneous order, you forget that it can create a disorder at the same time. And isn't an order is a vision of some one, and thus cannot be random? I mean if I say my room is clean and in order, isn't that subjective? Some may say: no its not how things should be.
+Yurtex "Order", in this sense, has the same meaning of "pattern", i.e, facts which presents certain regularities: "Questions will arise at first only after our senses have discerned some recurring pattern or order in the events. It is a re-cognition of some regularity (or recurring pattern, or order), of some similar feature in otherwise different circumstances, which makes us wonder and ask 'why?" (Hayek) The world is made up by a lot of different kind of patterns: "Many such regularities of nature are recognized 'intuitively' by our senses. We see and hear patterns as much as individual events without having to resort to intellectual operations." (Hayek) There are different kinds of pattern (or orders). Some we can predict every single elements resulting from them, and some we can just explain their "principle", excluding some properties which could arise from them: "The circumstances or conditions in which the pattern described by the theory will appear are defined by the range of values which may be inserted for the variables of the formula. All we need to know in order to make such a theory applicable to a situation is, therefore, that the data possess certain general properties (or belong to the class defined by the scope of the variables). Beyond this we need to know nothing about their individual attributes so long as we are content to derive merely the sort of pattern that will appear and not its particular manifestation. Such a theory destined to remain 'algebraic', because we are in fact unable to substitute particular values for the variables, ceases then to be a mere tool and becomes the final result of our theoretical efforts." "It is, indeed, surprising how simple in these terms, i.e., in terms of the number of distinct variables, appear all the laws of physics, and particularly of mechanics, when we look through a collection of formulae expressing them. On the other hand, even such relatively simple constituents of biological phenomena as feedback (or cybernetic) systems, in which a certain combination of physical structures produces an overall structure possessing distinct characteristic properties, require for their description something much more elaborate than anything describing the general laws of mechanics" "Probably the best illustration of a theory of complex phenomena which is of great value, although it describes merely a general pattern whose detail we can never fill in, is the Darwinian theory of evolution by natural selection." The orders of society (language, culture, market as the better examples), areexamples of these "complex patterns": "For this reason economic theory is confined to describing kinds of patterns which will appear if certain general conditions are satisfied, but can rarely if ever derive from this knowledge any predictions of specific phenomena. This is seen most clearly if we consider those systems of simultaneous equations which since Léon Walras have been widely used to represent the general relations between the prices and the quantities of all commodities bought and sold. They are so framed that if we were able to fill in all the blanks, i.e., if we knew all the parameters of these equations, we could calculate the prices and quantities of all the commodities. But, as at least the founders of this theory clearly understood, its purpose is not 'to arrive at a numerical calculation of prices', because it would be 'absurd' to assume that we can ascertain all the data" "The prediction of the formation of this general kind of pattern rests on certain very general factual assumptions (such as that most people engage in trade in order to earn an income, that they prefer a larger income to a smaller one, that they are not prevented from entering whatever trade they wish, etc., - assumptions which determine the scope of the variables but not their particular values); it is, however, not dependent on the knowledge of the more particular circumstances which we would have to know in order to be able to predict prices or quantities of particular commodities." All these quotes came from "The Theory of Complex Phenomena", by F. A. Hayek. If you read the essay you will probably see an explanation with more depth: www.libertarianismo.org/livros/fahtcp.pdf
+Guilherme Resende Than I don't understand, the spontaneous part. If its a pattern, then shouldn't there be a prerequisite conditions, that needed for it to happen, else there would have been no attempts to influence it, as we don't try to change the weather or rotation of the earth. And if it has conditions, than its controllable.
+Yurtex "Spontaneous order" is just order undesigned; i.e, a pattern which was not consciously and deliberately created by man, like language, culture and market. But the fact remains that the single elements of this order are the man's acting. The best example is the "invisible hand" of Adam Smith, a metaphor to an order ('hand' - market and prices) which was not deliberately created by anyone ('invisible'), but is the result of the actions of man seeking his own interests (not necessarily aware that are part of a broader order). The attempt of the state to put an individual to seek some especific purposes is an interference in this spontaneous order, whereas this order depends on the free action of every element which is it's part. The single thing it's elements have to obey are some abstract rules, which will become the pattern of this order. Inside this pattern, the individual is free. So that the attempt of the state to deliberately organized the aims of the actions of the citizens is something which try to make this undeliberatelly order deliberate, which is prejudicial. It's like a game, in which the referee, rather than enforcing the general rules, tries to deliberatelly change the course of the game. It's almost like Adam Smith said in The Theory of Moral Sentiments: "The man of system... seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder."
+Yurtex, Nope. A pattern needs certain laws to be created. Darwinian evolution is an spontaneous order, once organism tends to adapt over time through few prerequisites: mutation and selection of the enviromnent. So it needs laws. But it is an spontanoeous, self generating system. For instance, in chemistry, spontaneous reaction is: "a reaction that occurs in a given set of conditions without intervention. A spontaneous reaction proceeds to completion without any outside help." study.com/academy/lesson/spontaneous-reaction-definition-examples-quiz.html It is the same thing with spontaneous order. It doesn't come from outside. The elements have not its positions and actions ordened by a superior, from outside. Their elements arranges based on certain pre established laws. It's the same thing with chemical spontaneous reaction. It obeys certain chemical laws, but it is even sponatneous. "the weather or rotation of the earth" also obeys the laws of physics. What we can do for spontenoues orders is establish the laws which they have to obey. But if we try to command the position and behavior of every element, it's not more a spontanoeous order, but a planned order, an organization or an hierarquical order.
This is taking the the account of realism . . . the etiquette of equality in the power of money and need. I would say that socialism can do this in small steps, yet it has to let it go and cannot keep it as law when the goal is reached; giving power back to the people . . . especially with the bad laws we have on the books, I would say that they need a period of time and then it does not become law unless it is voted back as one. This is the biggest problem with democracy today, it does not know it is becomes all powerful and does not know when to give power back to people! Defining power as the open steps of freedom in this case to bring in the change that people have been without!
Oh dear, I do wish that one day, in the not to distant future, that people will prefer to listen to this excellent stuff, instead of gov propaganda issued through the TV. "The fools flickering lantern"
+Gaidex Viller I guess you would have to define state for me. I'm guessing you mean government. And I was really looking for a specific inventor or group (aka state) claiming to invent the market. Because if it was not a person or one specific group of collaborative thinkers, it would seem to be spontaneous order brought about by necessity, mutual benefit, and convenience.
Can the knowledge problem be overcome today due to the rise of advanced computer systems? And as Milton Friedman proposed, we can simply use these supercomputers to govern the economy.
Is the argument that central control is more destructive than so called spontaneous order? Corporations have huge power to lobby and enact laws that favour them. Corporate structures are no mistake, they are heirarchical in nature and have centralized control. The slant is very libertarian/anrcho-capitalist and even aguing against technocracy as it is too hard to govern by experts because "they can't disseminate all knowledge". Sure as hell doesn't sound like a democratic outcome to just let order happen.
Hayek's argument is that spontaneous order incorporates more information and thus is more productive. The empirical record strongly supports this claim. It might be added that even if all the information about raw materials, machinery, skills, transportation routes, local conditions and people's subjective desires were somehow collected in one place, the combinatorial optimization problem would be computationally intractable. Spontaneous order scales in a way that central control cannot, since it is massively parallel. Do corporations have political power? Absolutely. But consider first that corporations are legal fictions, they are creatures of the state. They also confer social benefits -- for how did they become so wealthy, unless people paid them money? And why would they be paid, unless they offered a good or service worth the price? Keep in mind that there are two questions here, frequently conflated. 1) How does the economy work? 2) What is the best policy to govern economic actions and their consequences? Hayek's spontaneous order is a descriptive theory that answers question 1. You may dislike some of its implications, but that is no strike against it as a scientific account that seeks to explain a set of phenomena.
Why then, are countries like Somalia or DRC which have weaker/multiple/ non existant authorities so dangerous to live in? Places like Australia, where a strong and legitimate central authority exists are better in every aspect. Central authority keeps a check on the greedy and selfish tendencies of people. It's also important for allocation of resources in places like India where resources are limited, but people are 1.3 billion and growing. If central intervention is taken out of India, the big businessmen and feudal overlords will want to own the best pieces of land, will want to own water and rivers, and will use their power to violently finish off any opposition. Human order always emerges due to millions of transactions and interactions amongst everyday people. It's never imposed by an authority. However, this order needs to be controlled to keep it orderly. This "control" has to be designed in a specific manner. That is where intellectuals come in. Everyday people are not philosophers. A lot of them are power hungry psychopaths and sometimes they are also gifted with incredible intellect. They can, with enough manipulation gather power for themselves and become authorities in themselves. Eventually they will create a central authority in such situations and such authorities are weaker and more ineffective to maintain order compared to nation states. It's just my opinion...
It would be nice to see a better version of capitalism than the one we have currently. I think that’s why a lot of people are attracted to socialism, not that the attraction makes much sense. Really no matter what side you’re on, it seems like the powers that be are against us
The major flaw with this video is that it completely ignores the public goods which either would not be provided by the free market, or would be provided at a much higher cost and lower quality. Let's think about roads. Sure, maybe some streets within a city would be built by the local citizens, but how about inter-city highways? They don't pass by anyone's front lawn, so who will be responsible for building and maintaining them? City X would not want to pay the whole cost since City Y also benefits, and viceversa. So how about every citizen in both cities pool some money together for building the roads, and set up a committee who investigates the costs involved and decides how much needs to be paid? Well my my, it seems that our process of "spontaneous order" has just come up with a proto-government with it's own tax income, leaders and budget as the most effective method to solve a market deficiency. This video inexplicably treats government as some sort of alien invention that was just plopped onto people and not the response to a demand, same as the corner-shop selling umbrellas. Not only are there some absolutely crucial services governments provide which some hippie anarchist commune would by definition have no way of providing (such as infrastructure, order, stable currency, justice, defense, healthcare, care in old age etc). Not only that but many government interventions fix clear market failures. Say I sell good apples for $1 each and a guy opens a stand next to me selling shitty apples covered in a bag at $0.5 each. Sure the market would eventually figure out not to buy from that guy, bit chances are by the time they do so I will have been outcompeted out of the business and have to recourse to either also selling shitty apples or going bankrupt. Wouldn't both I the honest trader and you the innocent consumer have been better off if the government declared hiding the quality of the apples you're selling illegal and hence prevented the whole ordeal to begin with? And lo and behold there's a role for government regulation. Far from me to say that governments are perfect, they never over-regulate or they never get things wrong. But this video is downright manipulative by describing the effects of governments intervening in the most invasive and ineffective ways possible and using that as an argument against net positive or downright crucial government services, whose benefits are barely mentioned or inexplicably taken for granted in the video.
Of course authoritarianism isn't necessarily better. But we shouldn't judge a system by the size of its government... We should judge a system by its *results.*
@@elietheprof5678 incidentally, near omnipresent goverment is a hallmark of the socialist movements that brough about so much misery in countries like mao's China or pol pot's Cambodia.
I was a bit disappointed by how you used the word "socialism" in this video. By itself, the word means nothing more than democratic workers' control of the means of production. Unfortunately, over the century its meaning has become severely obfuscated, especially in the US, in part due to capitalist and Soviet propaganda. I'm pretty sure that most socialists today are libertarian (meaning anti-authoritarian, not necessarily pro-capitalist -- here's another word that's largely misunderstood)* -- and therefore opposed to centralized control. Much of historical socialism has also been libertarian and populist, but, unfortunately, the authoritarians won. These authoritarians believed that a strong state was necessary to establish socialism and communism. They had the pretense of representing the proletariat and of wanting to establish a legitimate workers' state, yet in reality their states weren't even remotely democratic. As a result, libertarians see countries like the Soviet Union as having practiced a form of state capitalism, where capitalism-like class relations continued to exist, though the identity of the ruling class was different. Instead of capitalists, it was the state that set wages, owned private property, extracted profit (a disproportionate amount of which ended up in the pockets of officials), and bossed workers around in undemocratic workplaces. en.m.wikipedia.org/wiki/State_capitalism#Use_by_socialists The state socialist argument is that representative state control is workers' control by proxy. Even with with a democratic state, this is weak, as so-called representative democracies don't afford enough control to the citizenry (they're really more like limited oligarchies, aren't they? -- a system where you merely get to elect your rulers). Libertarian socialists advocate socialism within a system of direct democracy, where the means of production are owned directly and locally, where local distribution is achieved either through markets or through communal stores, and where intercommunal distribution is coordinated either by the market or by agreements made between members of a federal association of syndicates or communities. So it's inaccurate to define "socialism" as central planning or to say that centralism is inherent to socialism. In fact, socialism isn't even antithetical to the free market, as in the cases of market socialism and mutualism. (However, most socialists, even the libertarian ones, are communists and therefore not pro-market.) The market may be an example of spontaneous order. However, I'd argue that capitalism isn't. Capitalism is characterized by the following: markets, bosses, exploitation of workers, production for profit, and private property (defined as property from which one can profit without performing labor; not to be confused with personal property, which means everything else). This last item is the biggest thing: If the population has sufficient class consciousness, private property rights must be upheld by force. If you own a plantation, hire workers, and pay them less than the value that they produce, that's private property -- and unless you can convince the workers that their situation is just, they'll want to take over the business. This is why modern capitalism depends upon the violence of the state (as well as ideology and propaganda) and why it's argued that anarcho-capitalism would lead to neo-feudalism, as the capitalists would have to use hired violence to defend their property rights. Anyway, I'd love it if you made some videos that had the effect of clearing up some misconceptions about socialism and communism. Even if you're not a socialist, it's an important topic that deserves elucidation in the face of enormous definitional ignorance. * I know this may seem like a stupid source, but I think that it's rather telling that on Reddit the libertarian socialist subreddit r/Anarchism has slightly more subscribers than r/Socialism (which encompasses all forms of socialism, of which anarchism is only one), implying that socialism is now predominantly libertarian, at least among young males.
+Joshua Chen I'm sorry Joshua, but you make no sense. The only way he used the word socialism was to talk about how the government fails when tries to substitute the price system generated by spontaneous order with centralized control of the means of production (which is exactly what you are saying he didn't do). You don't need to take my word for it. I'll leave here the part where he specifically mentions socialism (extracted from the transcripts of the video): "An ordered, and hence prosperous, economy, requires that market participants make use of what Hayek called knowledge of particular place and time, or in other words contextual knowledge held by specific market participants about the goods and services which they as consumers or producers are interested in. A price system, being a decentralized mechanism, is able to make use of this dispersed knowledge as it is reflected in the patterns of buying and selling of interconnected market participants. A centralized body on the other hand faces insurmountable difficulties obtaining and making proper use of this knowledge. In addition to the fact that much of the knowledge needed to coordinate an economy is dispersed among a huge number of different people, much of the knowledge used by market participants is incommunicable being implicit in their actions and attitudes, or as Karl Polanyi put it “We can know more than we can tell.” In effect government control of an economy [SOCIALISM] replaces a mechanism that makes use of the knowledge of millions or billions of people, depending on the extent of the market, with control by a relatively small group of politicians and bureaucrats whose knowledge is severely limited. With nothing effective to replace the price system with, socialist countries - as evidenced by the collapse of the Soviet Union and the despair that exists in countries such as North Korea - can never be as prosperous as countries which have freer markets. Ironically, while many who support socialism are also champions of economic equality, history has shown that when countries try to stamp out the spontaneous wealth generating process associated with free markets they create the worst type of inequality possible; a society where the masses starve while the central planners live like royalty".
I wonder if it's possible to discuss these topics from libertarian POV, but without insane strawmen arguments against socialism everywhere. Maybe with enough spontaneous order, we could achieve even that
I feel like this video misses a few critical points. First, there are some things that are too critical to leave to the free market (think of nuclear plants for example, but there are many markets we depend upon that can't just 'fail'). Second, unregulated free markets will produce monopolies which are terrible. Finally, let's not assume that because it failed in the past, it will fail in the future. Also I think your usage of evolution as support for free market is super fallacious. Yes order comes out of evolution, and order would probably come out eventually from free markets. But monopolies for example is form of order, just not what we want. Order is not everything we care about.
Actually regulated markets produce monopolies. You have it back wards. A monopoly can exist in a free market but only for so long. A business can exist only for as long as it satisfies its customers. In a regulated market however Businesses and Governments collude with one another. Once subsidized by taxpayer dollars these institutions can remain no matter how what shady practices or immoral acts they commit (2008 housing market crash cough cough). "too big to fail" lets bail themn out says the governemnt. Its not that they're "too big to fail" it's that theyr'e bed buddies with one another. This is where "crony capitalism" comes into play and it is no longer a free market. In a free market whether a business succeeds or fails is left to an impartial market to decide not centralized bureaucrats who are slave to special interests.
I don't think he's necessarily advocating unregulated markets, he's just using it as an example of spontaneous order, as it's a macrostructre we are all familiar with (whether we like it or not).
There are so many problems with this when we look at reality. In every major economically successful culture: language, currency, standard weights and measures, and bodies of law had to be put in place first. Mass trade is impossible without these things. How can you conduct business with 10 partners if you can't agree on currency rates, don't know what they are saying, or want to measure things differently? These did NOT develop naturally or spontaneously. There is zero evidence of that. There is clear historical record going all the way back to Babylon and Sumer that show government set standards. - See the Greeks, Romans, Chinese, Indians, etc. Enforceable language standards were especially required for comprehensible fair dealing, because contracts are necessary (See 2. below). The idea that we need a standard is natural, the implementation and enforcement of a standard is not. People can naturally say "We should have standards" but it's the government, the ruling body, that selects what those standards are and enforces them for the sake of uniformity. All this so meaningful trade CAN HAPPEN on a large scale. Easy in a village where I know you and you know me, but not so between nations, states, or even cities. And this video contains within it, right near the beginning (approx. at 2:54), the real reason governments must step in and regulate "...so long as they do not initiate force or fraud against the person or property of others." 1. What happens to common property? No single person wants to pay for ALL of the road, because everyone uses it. That which no one wants to care for but everyone demands to use must be maintained, even if it must be compulsorily done rather than voluntary (i.e. taxes). 2. People DO institute fraud and force against each other. That is why business dealings, disclosure, and contracts are regulated. Many people are NOT ethical and will not logically play according to the rules of game theory-will hurt and defraud others and will cover it up. This just in! Human beings are irrational creatures and many are selfish and stupid. Monitoring is required. 3. When trade becomes complex enough to involve one-time transactions between players, game theory (which was used to support this "natural order" argument) speaks loudest and it says something wholly different in that case- *"Screw the other person"* is the best strategy if you know they will not be playing a second round with you. Does that make everyone comfortable? 4. We can't wait and let the consequences pile up over the long-term and let the "market" alone correct itself for three reasons: a) It presumes there is an "acceptable level" of harmed or cheated customers (who will suffer unless/until the market corrects the seller) and their rights do not matter. In the case of violence/murder/theft for profit, this can never be permissible, if we value an orderly society. b) The market does not know man is horrible. The market is not a real person. It is an ambivalent force, much like Nature- What a man can do-and get away with- is all that matters. And mass knowledge (what everyone can agree on) is the wisdom of the crowd. If you're putting your faith in that, you should go watch the excellent video from Academy of Ideas on Conformity. The concept of price is just an agreed upon Wisdom of the masses. Though I would argue, it's the product of a true mini-oligarchy (worse!), not even the masses, because only the biggest players get a say in setting price in reality. c) It presumes the "market" mass knowledge will discover the bad behavior from the seller through ordinary non-regulatory means. Nothing supports this at all. People dismiss as rumor what lacks evidence. There's no way to gather evidence if we can't legally compel an audit or prosecute under law (because government would be doing those things.) Angry customer reviews do not a fraudster make.
Standards are not necessary for trade to exist. Yes, standards and enforcement facilitate trade. Yes, trade flourishes within the state. But the material and intellectual resources of the state would not be possible without trade. The first writing (cuneiform) was invented to keep accounts, while advances in pottery, agriculture and metallurgy were carried along trade routes before civilization even existed.
"only the biggest players get a say in setting price." Have you never used eBay or Craigslist? Prices are set by the interactions of "small players" all the time. Who is the "big player" that "gets a say" in setting the price of a 1998 Honda Civic? Or a vintage Commodore 64? Who gets to set the price of a pack of No. 2 pencils? Of crude oil? There are relatively few markets in which one or a few participants set prices as they please. Producers have to balance the competing interests of their suppliers, their employees, and their customers. It's a highly complex web that is constantly adjusting to new circumstances.
You are correct, order can arise spontaneously. And you are correct, common social behaviors can arise spontaneously through evolution. However, the free market is a fairy tale for the greedy. The reason we have government is because the free market drives people to do greedy things for money that are not in the best interest of the society as whole. Tragedy of the commons is not because of government, it is the result of greedy people acting greedy. If you are suggesting that greedy behavior is a random phenomena that can somehow manifest in a structured system that magically benefits everyone, then you are balls deep in your fairy tale.
+bobgrinshpon We need institutions which turn this greedy into well-being for society. It's like Adam Smith said. He did not exclude the "greedy" of man in his analyses. But tried to find a system in which this greedy turns into good for society: Every individual… neither intends to promote the public interest, nor knows how much he is promoting it… he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. The Wealth Of Nations, Book IV, Chapter II, p. 456, para. 9. It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages. The Wealth Of Nations, Book I, Chapter II, pp. 26-7, para 12.
Government is actually what the greedy love. It allows them a means by which to enforce regulations on the market that almost always benefit them in someway (or are simply nearsighted and end up being harmful in the long run. Evidence shows that free markets do not make people greedy, rather they actually become substantially more charitable. What is good for the individual is not necessarily bad for society as a whole, and markets are one of the best ways for someone to pursue their selfish desires while simultaneously helping their fellow man. Whatever isn't beneficial to society is often what adversely affects people's property (pollution, etc.) and can be dealt with without government. The tragedy of the commons is neither the result of greed nor government, but a lack of individual property rights. When a resource is collectively owned, there is not benefit to preserving the resource, as your efforts are wasted and leave you with nothing to show for it. If you have your own private property, say a field, preserving it benefits you directly. Finally, your last assertion is true. Free markets don't magically benefit everyone, they benefit everyone that innovates, works hard, and takes risks.
+TheApache412 "Whatever isn't beneficial to society is often what adversely affects people's property (pollution, etc.) and can be dealt with without government." Some problems can obviously be dealt with without government, but we do still need government to solve all the rest. You can't even have private property without government, and any time the free market makes obviously bad decisions we need people who have the power to overrule it. For example, climate change is exactly the sort of problem that the free market would completely ignore. Surely there are many situations where the free market is actively harmful. In any transaction there are two people whose interests are represented, the buyer and the seller. They are both benefited by each transaction and that's very good since those sorts of transactions make up a huge part of our lives. Unfortunately, if anyone else is affected by the transaction there is nothing to ensure that it will be beneficial. Building a tower can be great for the people who own the land and the people who use the building, but it can destroy the view from the street, cripple tourism, and ruin businesses that had no say in the building of the tower. Similarly if a factory dumps toxic waste in a river its costs will be lower, its profits will be higher and its customers will be happier for having to pay smaller prices, but everyone else will suffer from having a toxic river and they'll have no way to stop it in a free market. The free market is a powerful tool that is capable of immense good and it is the source of all prosperity, but like any tool it can be dangerous if used carelessly. We wouldn't want to trust _every_ decision to the free market.
You seem to make the mistake of assuming the enforcement of private property rights = the state or regulation. Or you assume that free market means that you can do whatever you want regardless of how it affects other people. Private companies are capable of enforcing rights (private security outnumbers cops in the US for example). If a factory dumps toxic waste in a river, they are directly polluting the land of anyone who lives on that river and violating their rights in the process. Similarly factories dumping loads of CO2 into the atmosphere, regardless of what the severity of the effects are, does effect other people's property, meaning they have a legitimate right to stop them from doing so. On the issue of climate change, even though I don't see it as the huge looming apocalypse many people seem to think it's going to be, the problem has a lot to do with oil companies patenting the technology to alternative energy sources that would be miles ahead of where they are today if not so hindered. I argue that this is violating other people's rights to do with their property as they wish. Regardless of all this, free markets don't make decisions. Individuals in free markets make decisions. Even if there were a benefit to having a centralized power to correct the "mistakes" of people who aren't violating anyone else's rights, it's not worth the fact that the people who want this power almost unanimously abuse it. It does more harm than good in my opinion.
TheApache412 "You seem to make the mistake of assuming the enforcement of private property rights = the state or regulation." Are you saying that the enforcement of property rights could be done by something other than a government? "You assume that free market means that you can do whatever you want regardless of how it affects other people." No, the free market is just allowing people to freely trade property with each other. This is great for inspiring people to build industries and satisfy people's needs. Unfortunately it also inspires people do very bad things like dumping toxic waste and emitting enormous amounts of greenhouse gas. This is why the free market needs to be managed to keep its dangerous aspects in check. "If a factory dumps toxic waste in a river, they are directly polluting the land of anyone who lives on that river and violating their rights in the process." Exactly, and the free market has no mechanism for dealing with that problem. There are two obvious solutions. For one, the people who own land on the river could band together to form an army and destroy the source of the toxic waste. This is in violation of the rules of private property, so it will be a war between the river land owners and whoever is charged with enforcing private property. The other obvious solution is for everyone in the market to band together to create and support an organization for the purpose of protecting our common interests, enforcing our rights, and preventing us from going to war against each other whenever the free market alone cannot resolve a problem. "Factories dumping loads of CO2 into the atmosphere, regardless of what the severity of the effects are, does effect other people's property, meaning they have a legitimate right to stop them from doing so." The point is that legitimate rights are meaningless in a free market. The only way legitimate rights mean anything is when there is some power that recognizes those rights and enforces them. In other words, we have rights because we have governments; the free market contributes nothing to our rights and only respects our rights to the extent that the government forces it to respect our rights. "Private companies are capable of enforcing rights (private security outnumbers cops in the US for example)." Those private companies cannot enforce rights without the help of the cops, no matter the numbers. The only thing that distinguishes private security companies from mercenary armies is the fact that private security companies are ruled by the law. If we didn't have police, then the private security companies would just enforce whatever "rights" they feel like enforcing based on how much people are willing to pay. Unfortunately they will fail because the other side has decide it also has certain rights and its own private security company to enforce its version of the rights. Instead of rights, all people would have would be war. "Regardless of all this, free markets don't make decisions. Individuals in free markets make decisions." That doesn't mean that the free market is not responsible. The individuals who make decisions in a free market are being manipulated by the free market. The system makes people want money with the promise of almost limitless rewards from having money. A situation like that seems perfectly designed to cause even good people to be willing to do bad things. This is why we need laws, rights, regulations, and so on to make sure that people don't abuse the free market. For example, false advertising is very damaging to the free market, but at the same time the free market encourages people to false advertise. To help the free market run smoothly, we have regulations to restrict false advertising. "It's not worth the fact that the people who want this power almost unanimously abuse it." Centralized control is not perfect. Abuses will always happen. We can try for a system that makes the abuse of power difficult. Democracy seems to work quite well sometimes, but there's no perfect solution. Unfortunately there is no way to run an effective free market without centralized control to manage it, so we just have to try to make the best of it.
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“But having cast away the god of nature, these people have turned around and made a god of the state.” Well said!
Yes, absolutely brilliant.
@HanselManCan you seem confrontational. Why?
@@johnnybanana8562 Yeah, i agree fully, and why does he do it?
@@martinwarner1178 because he is lost.
@@johnnybanana8562 You got it one smart fellow.
"Free minds + Free markets = Free people."
Beautiful analysis and delivery.
Very good video man, been a fan for years and you just keep bringing the goods.
Nice to see this channel pass the million subscriber mark!
It will be two million in no time.
Thank you always for the great content and well spoken words. Each one is a treasure.
Great work. Dr Ron Paul would agree.
Been subbed about 2 years keep coming back to this channel,great content,thanks for keeping my mind opened.
This video explains the desperate need by the powers to "know" everything we know through observation.
Awesome once again, glad to see this channel growing, it deserves it.
This topic was absolutely aced in this video. Well done. Love your channel
Thanks so much for providing script as well!
Excellent presentation of a simple concept, spontaneous order...
One of your best videos!
Thank you a lot for your effort and content. We really appreciate it!
That very last statement was 👌
You are awesome at what you are doing here. I wish I had the money to help support you, but I'm told that I owe the government a few thousand dollars because I made income this year.
tradecenter7 Do you use roads to get to your work? Do you think those roads materialize out of thin air?
Did he ask for these roads?
Jaidenati Yes. He was asked for that when he started making money in a way that required use of public infrastructure requiring maintenance . His implicit response was yes, I do consider the cost needed to maintain these roads worth the deduction from my salary, for else I wouldn't earn it in the first place.
Just a general pointer, if any socio-economic position you hold comes to the conclusion that fucking *roads* are a bad thing please start questioning whatever inane bullshit you're currently believing.
Do you have discord? Or would you rather continue discussing this in youtube comments.
The earned income credit was an awful deal and the real world outside today would undeniably be different if Friedman's Negative Income Tax would have been implemented instead. Rather than Free To Choose the US got stuck with Pay To Play corrupt policies again.
Why should I be forced to pay for drugs to be illegal? Why should anyone, much less everyone, without informed consent? The only sense that makes is nonsense.
The war on drugs was never about drugs though. There are two markets, political and economical. The political one is the black market and the economical is the one we see before our eyes everyday all around US.
Nobody spends somebody else's money more carefully than you can yourself. The Federal Reserve should be abolished along with all formats of licenses (medical & auto too) as well as insurances that match. Bad job creation from the hill and all that. Where has everyone been at?
We are governed of the people, by the bureaucrats, for the bureaucrats. I demand that Congress and POTUS be replaced by an app, STAT!
The only thing you know is that you know nothing. just like everyone else including me. Lots of people have opposing positions, none more valid than another. Carpe Diem.
See ilya prigogine, order out of chaos. Definitive guide to spontaneous order.
Get the transcript: academyofideas.com/2016/03/spontaneous-order-vs-centralized-control/
+Academy of Ideas Can you please add your transcripts to the youtube captioning system?
+BigBadWolf Yes I will do so for future videos.
You define a free market in terms of free decision making "as long as they do not initiate force or fraud against others". How exactly is this condition to be enforced if not by manner of laws and regulations?
Very timely subject examined today!
Another great video. So much wisdom to be found in this one. As always, I am grateful guys.
Beautifully done. Work that saves society’s. Your philosophical video essays are a true manifestation of philosophy.
2:40 The problem with free markets, at least by the definition used here, is that they require a state to defend; they might arise spontaneously but require some level of top-down control to maintain. Without the threat of state violence (whether that state is a government or a private security company; both would fit either Marx or Weber's definition of the state), no capitalist economy would successfully function, as the owners would not be able to defend their claims to property by themselves. Individuals or groups of workers would just take what they wanted from the property owners. We can see this in history: the rise of city-states was primarily a result of the need for neolithic people to defend land claims, as agriculture had just taken off and many hunter-gatherers still existed who didn't recognize or respect this property.
I like the idea of spontaneous order, but its not compatible with capitalism. Maybe mutualism, if you want to hold on to free markets. Cooperatives could be considered forms of spontaneous order, formed from voluntary individuals freely associating, creating products to trade on a free market.
Thank you for these very informative and interesting videos, great channel
One thing is missing tho. You have to include that this form of coercive control is applied in such a way that by using taxing, a gubment can have leverage over the price of the goods and services being traded. The provider of the goods and services, being motivated to sell and having control over the abundance can be easily destroyed with this leverage. Just increase tax and the provider will be forced to drive down prices. A given government can take goods and services for free using tax too.
Socialism failed because during it, only a small clique was allowed to practice capitalism. The establishment method was updated since. Allow everyone to practice capitalism while a government imposing taxation. It's a win win
Imminent threat on security gives consesus of total controls usually no?
During wartime centralized planning works extraordinary well (ex: world war II). It's something to do with depending on others to make/maintain a life worth surviving for. However during peacetime it seems to become everyone for themselves. It seem nothing inspires mankind more to cooperate with each other than death knocking at their door.
Yeah because only central planners would be dumb enough to start a war. A top down system isn’t really co-operation, its coercion. Really, it’s slavery.
Pair this video with the one comparing free market entrepreneurs and political entrepreneurs and you've got something going on. the only role government has is to "keep the peace" among those participating in the production of spontaneous order, and this peace-keeping mission itself must needs be produced in a spontaneously ordered manner by those over whom this order, that is, order of peace-keeping mission, shall be imposed. That is to say, even a beneficent government cannot be so should it be an imposition.
"State is the name of the coldest of all cold monsters." Friedrich Nietzsche There is a vast difference between Assistance and Overseeing, and governments make no distinction between the two...
Excellent video. Seems spontaneous order is a sort of exaptation, in the broad sense. Could there be a bridge between between biology and market?
+SeftR
Yes. The core idea of spontaneous order, popularized by Hayek to say about the markets, are used to explain a lot o things also in the natural sciences.
Hayek said that these ideas, originally developed by the scots, served as inspirations even for Darwin's theory of evolution by natural selection.
And Hayek, to develop his ideas, much loaned from the studies on biological evolution and the incipient cybernetics.
Today, these ideas are being used, for example, in ecology: papers.ssrn.com/sol3/papers.cfm?abstract_id=2501745
"The notion of a spontaneous order has a long history in the philosophy of economics, where it has been used to advance a view of markets as complex networks of information that no single mind can apprehend. Traditionally, the impossibility of grasping all of the information present in the spontaneous order of the market has been invoked as grounds for not subjecting markets to central planning. A less noted feature of the spontaneous order concept is that when it is applied to ecosystems it yields a reasonably strong environmental ethic. Thinking of ecosystems as spontaneous orders generates a presumption against interfering with their natural functioning in a manner that results in anthropogenic species loss. Such a presumption will permit some interventions in nature while precluding others. Environmental ethics could potentially make valuable use of the spontaneous order idea, without necessarily endorsing its traditional application to markets."
+SeftR Well the market is a self-selecting organic system based upon economic competition - a very Darwinian institution. So yes, it is very analogous.
+SeftR Maybe with mutualism/mutual aid (the anarchistic theories of course) but definitely not capitalism
Have you done a video on the drug war around the world yet? 'Cause that would be awesome. Also, watching your videos makes me feel like I need to read books.
+mrcdplay That would be an interesting topic!
+Academy of Ideas Look at the Count the Costs initiative. The drug war is nasty. It will be an interesting topic indeed.
In population ecology there is a pattern that plays out where populations follow a sine wave. When a species is left unchecked they can quickly grow only to exhaust their resources and collapse. This tends to impact the entire ecosystem where it could take decades for a new equalibrium to be established.
The same is true with free market systems, when left unchecked there is market failure. Trying to exert complete control over the market never works for the reasons listed in the video, however, we've learned through trial and error that certain trends preceed a market failure and government can be used to prevent or minimize that failure. Government can also restrain the market to achieve non-economic goals such as clean air, social policies, etc. The key is to find the proper balance of intervention and free market policies. where that balance is depends on what you think the role of the government is and what type of society you want to live in. The extremes, which few people really want, are anarchy and totalitarianism.
+gobblox38 'When a species is left unchecked' You fail to mention the prior action or occurrence that must have taken place to incur the possibility of a species going 'unchecked'.
Several prior actions could cause that situation, should I list every specific example even though I am using it as a generalized analogy?
Yes indeed..social policies, let's see where that leads..face masks..no rights to work..lockdowns.. no right to travel..fear. Restrain the markets.. control resources..hmmm in 2030 you will own nothing and be happy..aka the great reset.gobal warming etc. Oh yes central government will do all this "for the greater good". I'll have my spontaneous order any day over centralized control...where I think for my self and take responsibility for my actions.
I take a number of issues with this video, (and with Austrian economics in general, which this video is clearly partial towards).
1. The claim that prices convey information efficiently is a logical fallacy. I've written about this elsewhere, so I'll refrain from explaining unless asked to elaborate.
2. The video incorrectly defines 'socialism' as the government operating all production, which was not the intention of Marx or its other founders, nor is it the goal of modern-day socialists. Socialism is better defined as a system in which decisions made about production and profits are made by everybody involved in production (and sometimes consumers as well) rather than just a very small number of employers. This can be top-down (if the government is deemed to be an adaquate representation of workers, although usually it isn't) or it can be bottom-up (as in firms that are organized as worker cooperatives rather than capitalistm firms). To date, most countries claiming to operate a socialist system would really be better described as "state capitalism," in which the employer/employee relation stays the same, except the employer is now the state instead of a private person.
3. The video is indicating that socialist (read, state capitalist) countries have not done very well, but this is false. In the case of both Russia and China, these nations were able to convert from a primarily agrarian and illiterate society into the world's second super-power in 50 years. I could be wrong, but I think those are the fastest episodes of economic growth in all of recorded history, and they were both accomplished under top-down systems.
4. Although it's true that systems like markets exhibit spontaneous order and structure, there's really no reason to think that the natural processes that these structures end up operating will be beneficial to society. An analog for this might be what you would call "design flaws" while studying evolution: vestigial organs, and ather maladaptive problematic tendencies that are endemic to natural selection, because there is no process to solve these problems. For instance, free market capitalism has a well documented tendency of transfering wealth from the poor to the rich, and has no process to reverse this. Just because an order is spontaneous, there's no reason to think that system will be sustainable, equitable, or otherwise morally tenable.
5. Although the free market capitalist system appears to be one in which all power and control are given to individuals, in reality it's not. Far from being unplanned, large corporations are in fact planned from the top-down. Austrians would say that it is individuals always who are making the choices, not the company itself, but this is only somewhat true: most companies have a very small number of people making all the decisions, and the rest of the people must obey them. Sure, those people have the choice to quit and get another job, but then they'd just face the same situation at a different company. They don't have a real choice, because they *must* participate in the system, or else die. How that isn't "coercion" is beyond me.
5. Even if you thought top-down control was a bad thing (which I don't), that's not the only way in which a government can operate. To acheive spontaneous order, all you need is that individuals make choices that make sense for them. A government could still intervene by adjusting what the set of choices are, towards ones that do better for society as a whole. It could even intervene by adding more choice, for instance by breaking down monopolies, or improving the safety net so that employees aren't afraid of starving to death if they quit, and are thus more free to choose to look for a new job. There's no reason that the government must intervene by determining the outcome of every decision.
Can I get for a link for #1 and great job on this
Since writing that I have discovered this page, which ought to keep you busy for quite some time: socialdemocracy21stcentury.blogspot.com/2012/06/debunking-austrian-economics-101.html
However, there are many reasons why prices do not necessarily convey information about the real circumstances underlying the economy. For instance, for that to be true, it would have to be the case that nobody has market power, and that no forces in the economy tend towards market power, which are fairly self-evidently not the case. It also only applies if firms everywhere face rising marginal costs, but empirical studies shows that they don't; most firms aim to operate so as to have flat marginal costs so that they can quickly respond to spikes in demand without increasing prices.
But even more fundamental than that, it doesn't apply to any market where the supply and demand curves are not independent. Suppose that an increase in production leads to a fall in the price of gas. This will reduce the income of all the people who produce gas, and this will reduce their consumption of everything, including gasoline. This will reduce the demand for gasoline, shifting the demand curve and putting downward pressure on the price. So, a change in the supply curve caused a change in the demand curve, meaning there is no equilibrium price. It's possible that this could become a negative feedback loop, further reducing output, employment and income until the market is depressed for no real reason other than hysteresis.
"Suppose that an increase in production leads to a fall in the price of gas. This will reduce the income of all the people who produce gas"
A fall in the price of gas would not reduce the income of all the people who produce gas, this is because as the price of gas falls the demand for gas goes up and therefore more gas is sold. That is why people strive to get prices as low as possible because the lower the price of their product the more product they will sell. People would not strive to lower prices if it lowered their income.
And I was going to go on to the next part but it all seems to be based on this fallacy.
"A fall in the price of gas would not reduce the income of all the people who produce gas, this is because as the price of gas falls the demand for gas goes up and therefore more gas is sold"
There are two parts to your statement: 1) a fall in the price of gas will increase demand for gas, and 2) the increase in quantity purchased is enough to offset the income from a fall in price. Neither of those are necessarily true.
For one, it depends on the elasticity of demand. If the price of gas drops $0.01, how much extra gas will you buy? For a large number of consumers, potentially the majority of them, the answer will be zero. They'll still buy just enough to fill their tanks based on their current commuting patterns. Yet a $0.01 drop in price at the same quantity is potentially millions of dollars of revenue to a producer.
Also, the reason that producers strive for lower prices is not to increase demand, but to increase market share. If it's a competitive market, then raising your price will make your customers abandon you for your competitors. But if all the producers raise their prices, then there's nowhere else for customers to go. And, if it's not a very competitive market then you can raise prices and your customers have no choice but to stick with you (until they are able to substitute to a different good or service to fill whatever need you're serving).
Obviously your model is flawed because it is not supported by real world phenomenon. Your model predicts a negative feedback loop, but obviously the price of gas and other goods fall all the time without causing a negative feedback loop
I'm from the future, 2022. This video aged well.
God damnit I love this channel!
Very nice vid. Quick question: aren't top-down control systems such as governments an emergent property of spontaneous order from a time without them?
Yeah, that's just it though private property is a involuntary coercive institution and involves centralized top down control in order for markets to even function.
+GoldenEye50 Yes. No one ever doubted that was necessary institutions to the functioning of the spontaneous order. The stablishment of the private property and abstract rules is needed. But inside these institutions, through this laws, the man is free to act, and acting (in his own interest) generate this order, which is "the result of human action, but not of human design" - "design" = deliberate intervention in the motion of the single elements of this order.
+GoldenEye50 Not at all. Private property is an inherent extension of the conclusion of self-ownership.
+IntoTheWest self ownership is bs people can't be property
Historically people have been treated like property. Hence the institution of slavery. It can be said that our bodies are property. In a free society, the key difference is the only person allowed ownership of your body is you, the individual. No one else has a right or mastery over you. Each is his own sovereign. Your organs for example. Only you have the right to sell or transplant them to another person...depending on what country you live in....In a slave society, self-ownership is not a property right that is respected. Or perhaps it is more accurate to say: not distributed equally to all persons?
both private property and communal property are socially constructed norms and can be created by either voluntary or coercive means
I CAN’T BELIEVE I’VE READ ONE OF THE BOOKS YOU REFERENCED!!!
That makes 1 out of about 4,000.
Hot damn!!
In addition to the coercion of The State. What about the coercion of multinational corporations that don't pay taxes?
Corporations are not into free markets and are not democratic.. they naturally grow into centralized monopolies to maximize profit for shareholders (and human rights are not profitable)
if the government is too weak, democracy and the free market would fail
Very intresting, love your videos.
Love the structure of your lectures, and the eloquent delivery. Please continue your wonderful work! Thanks!
Very Good.
I was going to say "This is exactly why I dont understand why my fellow biologists dont get it." but then you addressed that even.
I feel that in the day and age of the internet the difference between special knowledge and mundane knowledge lies only in an individual's motivation.
Cue 1984 10 years ago. Great video.
Inhibited by not just the knowledge problem but also apparently the dunning-kruger effect and a severe rectal cranial inversion (head up ass) 😂😂😂
"Big government" fails, not because the leaders are necessarily corrupt, but because they cannot effectively plan for millions, or even dozens of people, but one person can generally plan well for one person. Kudos. I guess government should be relegated to finding when one person's plans are to harm another or society as a whole, and make a plan for that person.
So in other words: End the Fed
100% end all fractional reserve central banks . good luck doing it though they killed kennedy
amazingly well spoken. Great job man 😊👍
Corruption by greedy people and groups destroys every system, even "free" trade / enterprise. Humans prevent this freedom, though often proponents of each system do not mention the corruption.
Superb. An authentic Libertarian gem.
I feel like you should have considered or at least acknowledged market failure that arises as a result of completely free markets.
Stellar, you never disappoint!! :)
Check out Curt Doolittle/propertarianism.
A.I might give them a functional centralization
Freemarket is only possible among free people "SO LONG AS THEY DO NOT INITIATE FORCE OR FRAUD". The force and fraud part is the purpose of government regulation; to protect people from force and fraud. Most people who argue for less regulation are those who intend to use force or fraud and those who have been blinded to defend them.
Isn't that ironic tho? Government is essentially what causes fraud and force to protect people from fraud and force. It makes government paradoxical in nature. It cannot protect people from fraud and force when it uses the same thing. It invalidates its own existence therefore making it unnecessary.
I must say I liked your less ideologically influenced videos more.
+one2play4 Interesting how in our times ideas which promote individual freedom are considered "ideologically influenced".
i love your vids man
The tendency of libertarian capitalists to assume that spontaneous organization is always good, is much like the hippie tendency to assume that all natural things are good. In both instances, it only requires a couple steps back, to see the error.
Ah I recognized the new market in Rotterdam at 9:02. Have you visited that place? :)
3:00..in, perfect!!
This video needs to be shown at every city council meeting and every county board of supervisors meeting
awesomenal
One sided look on the topic. Praising spontaneous order, you forget that it can create a disorder at the same time. And isn't an order is a vision of some one, and thus cannot be random? I mean if I say my room is clean and in order, isn't that subjective? Some may say: no its not how things should be.
+Yurtex
"Order", in this sense, has the same meaning of "pattern", i.e, facts which presents certain regularities:
"Questions will arise at first only after our senses have discerned some recurring pattern or order in the events. It is a re-cognition of some regularity (or recurring pattern, or order), of some similar feature in otherwise different circumstances, which makes us wonder and ask 'why?" (Hayek)
The world is made up by a lot of different kind of patterns:
"Many such regularities of nature are recognized 'intuitively' by our senses. We see and hear patterns as much as individual events without having to resort to intellectual operations." (Hayek)
There are different kinds of pattern (or orders). Some we can predict every single elements resulting from them, and some we can just explain their "principle", excluding some properties which could arise from them:
"The circumstances or conditions in which the pattern described by the theory will appear are defined by the range of values which may be inserted for the variables of the formula. All we need to know in order to make such a theory applicable to a situation is, therefore, that the data possess certain general properties (or belong to the class defined by the scope of the variables). Beyond this we need to know nothing about their individual attributes so long as we are content to derive merely the sort of pattern that will appear and not its particular manifestation. Such a theory destined to remain 'algebraic', because we are in fact unable to substitute particular values for the variables, ceases then to be a mere tool and becomes the final result of our theoretical efforts."
"It is, indeed, surprising how simple in these terms, i.e., in terms of the number of distinct variables, appear all the laws of physics, and particularly of mechanics, when we look through a collection of formulae expressing them. On the other hand, even such relatively simple constituents of biological phenomena as feedback (or cybernetic) systems, in which a certain combination of physical structures produces an overall structure possessing distinct characteristic properties, require for their description something much more elaborate than anything describing the general laws of mechanics"
"Probably the best illustration of a theory of complex phenomena which is of great value, although it describes merely a general pattern whose detail we can never fill in, is the Darwinian theory of evolution by natural selection."
The orders of society (language, culture, market as the better examples), areexamples of these "complex patterns":
"For this reason economic theory is confined to describing kinds of patterns which will appear if certain general conditions are satisfied, but can rarely if ever derive from this knowledge any predictions of specific phenomena. This is seen most clearly if we consider those systems of simultaneous equations which since Léon Walras have been widely used to represent the general relations between the prices and the quantities of all commodities bought and sold. They are so framed that if we were able to fill in all the blanks, i.e., if we knew all the parameters of these equations, we could calculate the prices and quantities of all the commodities. But, as at least the founders of this theory clearly understood, its purpose is not 'to arrive at a numerical calculation of prices', because it would be 'absurd' to assume that we can ascertain all the data"
"The prediction of the formation of this general kind of pattern rests on certain very general factual assumptions (such as that most people engage in trade in order to earn an income, that they prefer a larger income to a smaller one, that they are not prevented from entering whatever trade they wish, etc., - assumptions which determine the scope of the variables but not their particular values); it is, however, not dependent on the knowledge of the more particular circumstances which we would have to know in order to be able to predict prices or quantities of particular commodities."
All these quotes came from "The Theory of Complex Phenomena", by F. A. Hayek. If you read the essay you will probably see an explanation with more depth: www.libertarianismo.org/livros/fahtcp.pdf
+Guilherme Resende Than I don't understand, the spontaneous part. If its a pattern, then shouldn't there be a prerequisite conditions, that needed for it to happen, else there would have been no attempts to influence it, as we don't try to change the weather or rotation of the earth. And if it has conditions, than its controllable.
+Yurtex
"Spontaneous order" is just order undesigned; i.e, a pattern which was not consciously and deliberately created by man, like language, culture and market. But the fact remains that the single elements of this order are the man's acting. The best example is the "invisible hand" of Adam Smith, a metaphor to an order ('hand' - market and prices) which was not deliberately created by anyone ('invisible'), but is the result of the actions of man seeking his own interests (not necessarily aware that are part of a broader order).
The attempt of the state to put an individual to seek some especific purposes is an interference in this spontaneous order, whereas this order depends on the free action of every element which is it's part.
The single thing it's elements have to obey are some abstract rules, which will become the pattern of this order. Inside this pattern, the individual is free. So that the attempt of the state to deliberately organized the aims of the actions of the citizens is something which try to make this undeliberatelly order deliberate, which is prejudicial. It's like a game, in which the referee, rather than enforcing the general rules, tries to deliberatelly change the course of the game.
It's almost like Adam Smith said in The Theory of Moral Sentiments:
"The man of system... seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder."
+Yurtex, Nope. A pattern needs certain laws to be created. Darwinian evolution is an spontaneous order, once organism tends to adapt over time through few prerequisites: mutation and selection of the enviromnent. So it needs laws. But it is an spontanoeous, self generating system. For instance, in chemistry, spontaneous reaction is: "a reaction that occurs in a given set of conditions without intervention. A spontaneous reaction proceeds to completion without any outside help." study.com/academy/lesson/spontaneous-reaction-definition-examples-quiz.html
It is the same thing with spontaneous order. It doesn't come from outside. The elements have not its positions and actions ordened by a superior, from outside. Their elements arranges based on certain pre established laws. It's the same thing with chemical spontaneous reaction. It obeys certain chemical laws, but it is even sponatneous.
"the weather or rotation of the earth" also obeys the laws of physics.
What we can do for spontenoues orders is establish the laws which they have to obey. But if we try to command the position and behavior of every element, it's not more a spontanoeous order, but a planned order, an organization or an hierarquical order.
wtf
Thanks for dropping the knowledge bomb : )
Brilliant
I suggest you read the birth of biopolitics by Foucault.
This is taking the the account of realism . . . the etiquette of equality in the power of money and need. I would say that socialism can do this in small steps, yet it has to let it go and cannot keep it as law when the goal is reached; giving power back to the people . . . especially with the bad laws we have on the books, I would say that they need a period of time and then it does not become law unless it is voted back as one. This is the biggest problem with democracy today, it does not know it is becomes all powerful and does not know when to give power back to people! Defining power as the open steps of freedom in this case to bring in the change that people have been without!
Scarcity is not inevitable it is a human construct
This is organic growth. Nature.
So no images of Thomas sowell?
Oh dear, I do wish that one day, in the not to distant future, that people will prefer to listen to this excellent stuff, instead of gov propaganda issued through the TV. "The fools flickering lantern"
markets are something that originally created by the state.Markets are human contracts.
+Gaidex Viller so this is not Spontaneous Order.
What state exactly invented the matket?
tradecenter7 The markets come from afro-Eurasia many different states. I rather a freed market or no market at all.
+Gaidex Viller I guess you would have to define state for me. I'm guessing you mean government. And I was really looking for a specific inventor or group (aka state) claiming to invent the market. Because if it was not a person or one specific group of collaborative thinkers, it would seem to be spontaneous order brought about by necessity, mutual benefit, and convenience.
tradecenter7 A hierarchical system that imposes on people in different ways such as violence or nonsensical laws or a culture to control people.
Now connect this to Jaron Lanier's work and critiques regarding Big Data in "Who Own the Future".
You’ve linked so many things really nicely! 👍🏼
Can the knowledge problem be overcome today due to the rise of advanced computer systems? And as Milton Friedman proposed, we can simply use these supercomputers to govern the economy.
Where did Friedman say that supercomputers could plan the economy?
from PERSIA with Passion
Is the argument that central control is more destructive than so called spontaneous order? Corporations have huge power to lobby and enact laws that favour them. Corporate structures are no mistake, they are heirarchical in nature and have centralized control. The slant is very libertarian/anrcho-capitalist and even aguing against technocracy as it is too hard to govern by experts because "they can't disseminate all knowledge". Sure as hell doesn't sound like a democratic outcome to just let order happen.
Hayek's argument is that spontaneous order incorporates more information and thus is more productive. The empirical record strongly supports this claim. It might be added that even if all the information about raw materials, machinery, skills, transportation routes, local conditions and people's subjective desires were somehow collected in one place, the combinatorial optimization problem would be computationally intractable. Spontaneous order scales in a way that central control cannot, since it is massively parallel.
Do corporations have political power? Absolutely. But consider first that corporations are legal fictions, they are creatures of the state. They also confer social benefits -- for how did they become so wealthy, unless people paid them money? And why would they be paid, unless they offered a good or service worth the price?
Keep in mind that there are two questions here, frequently conflated. 1) How does the economy work? 2) What is the best policy to govern economic actions and their consequences? Hayek's spontaneous order is a descriptive theory that answers question 1. You may dislike some of its implications, but that is no strike against it as a scientific account that seeks to explain a set of phenomena.
Love these videos man keep it up. more psychology though please
7:50 my noot
How vital and how beautifully stated...
Why then, are countries like Somalia or DRC which have weaker/multiple/ non existant authorities so dangerous to live in? Places like Australia, where a strong and legitimate central authority exists are better in every aspect.
Central authority keeps a check on the greedy and selfish tendencies of people. It's also important for allocation of resources in places like India where resources are limited, but people are 1.3 billion and growing. If central intervention is taken out of India, the big businessmen and feudal overlords will want to own the best pieces of land, will want to own water and rivers, and will use their power to violently finish off any opposition.
Human order always emerges due to millions of transactions and interactions amongst everyday people. It's never imposed by an authority. However, this order needs to be controlled to keep it orderly. This "control" has to be designed in a specific manner. That is where intellectuals come in. Everyday people are not philosophers. A lot of them are power hungry psychopaths and sometimes they are also gifted with incredible intellect. They can, with enough manipulation gather power for themselves and become authorities in themselves. Eventually they will create a central authority in such situations and such authorities are weaker and more ineffective to maintain order compared to nation states. It's just my opinion...
A tyrannical government is also a spontaneous order, caused by thousands of people just doing their jobs...
Aka moral relativism.
@@Hedgehog3342 - Nope. I'm highlighting the fact that not all spontaneous orders are good.
So, politicians do not know what they are talking about. Got it.
Ordo an chao, chaos ordo venit esse.
It would be nice to see a better version of capitalism than the one we have currently. I think that’s why a lot of people are attracted to socialism, not that the attraction makes much sense. Really no matter what side you’re on, it seems like the powers that be are against us
Both can be cruel.
The major flaw with this video is that it completely ignores the public goods which either would not be provided by the free market, or would be provided at a much higher cost and lower quality. Let's think about roads. Sure, maybe some streets within a city would be built by the local citizens, but how about inter-city highways? They don't pass by anyone's front lawn, so who will be responsible for building and maintaining them? City X would not want to pay the whole cost since City Y also benefits, and viceversa. So how about every citizen in both cities pool some money together for building the roads, and set up a committee who investigates the costs involved and decides how much needs to be paid? Well my my, it seems that our process of "spontaneous order" has just come up with a proto-government with it's own tax income, leaders and budget as the most effective method to solve a market deficiency.
This video inexplicably treats government as some sort of alien invention that was just plopped onto people and not the response to a demand, same as the corner-shop selling umbrellas. Not only are there some absolutely crucial services governments provide which some hippie anarchist commune would by definition have no way of providing (such as infrastructure, order, stable currency, justice, defense, healthcare, care in old age etc). Not only that but many government interventions fix clear market failures. Say I sell good apples for $1 each and a guy opens a stand next to me selling shitty apples covered in a bag at $0.5 each. Sure the market would eventually figure out not to buy from that guy, bit chances are by the time they do so I will have been outcompeted out of the business and have to recourse to either also selling shitty apples or going bankrupt. Wouldn't both I the honest trader and you the innocent consumer have been better off if the government declared hiding the quality of the apples you're selling illegal and hence prevented the whole ordeal to begin with? And lo and behold there's a role for government regulation.
Far from me to say that governments are perfect, they never over-regulate or they never get things wrong. But this video is downright manipulative by describing the effects of governments intervening in the most invasive and ineffective ways possible and using that as an argument against net positive or downright crucial government services, whose benefits are barely mentioned or inexplicably taken for granted in the video.
Spontaneous order is *not* always good, and it's certainly not God.
Nothing is perfect. It’s human action.
@@truanarchy6315 - It doesn't have to be perfect, but it has to *at least* be less deadly than the alternatives. I'm not convinced.
Prisoners' Dilemmas are real. Same with Tragedies Of The Commons.
Natural doesn't equal good.
Of course authoritarianism isn't necessarily better.
But we shouldn't judge a system by the size of its government...
We should judge a system by its *results.*
@@elietheprof5678 incidentally, near omnipresent goverment is a hallmark of the socialist movements that brough about so much misery in countries like mao's China or pol pot's Cambodia.
I was a bit disappointed by how you used the word "socialism" in this video. By itself, the word means nothing more than democratic workers' control of the means of production. Unfortunately, over the century its meaning has become severely obfuscated, especially in the US, in part due to capitalist and Soviet propaganda.
I'm pretty sure that most socialists today are libertarian (meaning anti-authoritarian, not necessarily pro-capitalist -- here's another word that's largely misunderstood)* -- and therefore opposed to centralized control. Much of historical socialism has also been libertarian and populist, but, unfortunately, the authoritarians won. These authoritarians believed that a strong state was necessary to establish socialism and communism. They had the pretense of representing the proletariat and of wanting to establish a legitimate workers' state, yet in reality their states weren't even remotely democratic. As a result, libertarians see countries like the Soviet Union as having practiced a form of state capitalism, where capitalism-like class relations continued to exist, though the identity of the ruling class was different. Instead of capitalists, it was the state that set wages, owned private property, extracted profit (a disproportionate amount of which ended up in the pockets of officials), and bossed workers around in undemocratic workplaces. en.m.wikipedia.org/wiki/State_capitalism#Use_by_socialists
The state socialist argument is that representative state control is workers' control by proxy. Even with with a democratic state, this is weak, as so-called representative democracies don't afford enough control to the citizenry (they're really more like limited oligarchies, aren't they? -- a system where you merely get to elect your rulers). Libertarian socialists advocate socialism within a system of direct democracy, where the means of production are owned directly and locally, where local distribution is achieved either through markets or through communal stores, and where intercommunal distribution is coordinated either by the market or by agreements made between members of a federal association of syndicates or communities.
So it's inaccurate to define "socialism" as central planning or to say that centralism is inherent to socialism. In fact, socialism isn't even antithetical to the free market, as in the cases of market socialism and mutualism. (However, most socialists, even the libertarian ones, are communists and therefore not pro-market.)
The market may be an example of spontaneous order. However, I'd argue that capitalism isn't. Capitalism is characterized by the following: markets, bosses, exploitation of workers, production for profit, and private property (defined as property from which one can profit without performing labor; not to be confused with personal property, which means everything else). This last item is the biggest thing: If the population has sufficient class consciousness, private property rights must be upheld by force. If you own a plantation, hire workers, and pay them less than the value that they produce, that's private property -- and unless you can convince the workers that their situation is just, they'll want to take over the business. This is why modern capitalism depends upon the violence of the state (as well as ideology and propaganda) and why it's argued that anarcho-capitalism would lead to neo-feudalism, as the capitalists would have to use hired violence to defend their property rights.
Anyway, I'd love it if you made some videos that had the effect of clearing up some misconceptions about socialism and communism. Even if you're not a socialist, it's an important topic that deserves elucidation in the face of enormous definitional ignorance.
* I know this may seem like a stupid source, but I think that it's rather telling that on Reddit the libertarian socialist subreddit r/Anarchism has slightly more subscribers than r/Socialism (which encompasses all forms of socialism, of which anarchism is only one), implying that socialism is now predominantly libertarian, at least among young males.
+Joshua Chen I love you, great comment :D Libertarian socialism all the way. We need to take care of each other.
+Ungrowing
Fuck off. Take care of yourself, parasite!
So you think everyone should take care of himself? What if someone is not able? He/she should die? You seem to lack compassion.
+Joshua Chen I'm sorry Joshua, but you make no sense. The only way he used the word socialism was to talk about how the government fails when tries to substitute the price system generated by spontaneous order with centralized control of the means of production (which is exactly what you are saying he didn't do).
You don't need to take my word for it. I'll leave here the part where he specifically mentions socialism (extracted from the transcripts of the video):
"An ordered, and hence prosperous, economy, requires that market participants make use of what Hayek called knowledge of particular place and time, or in other words contextual knowledge held by specific market participants about the goods and services which they as consumers or producers are interested in. A price system, being a decentralized mechanism, is able to make use of this dispersed knowledge as it is reflected in the patterns of buying and selling of interconnected market participants.
A centralized body on the other hand faces insurmountable difficulties obtaining and making proper use of this knowledge. In addition to the fact that much of the knowledge needed to coordinate an economy is dispersed among a huge number of different people, much of the knowledge used by market participants is incommunicable being implicit in their actions and attitudes, or as Karl Polanyi put it “We can know more than we can tell.”
In effect government control of an economy [SOCIALISM] replaces a mechanism that makes use of the knowledge of millions or billions of people, depending on the extent of the market, with control by a relatively small group of politicians and bureaucrats whose knowledge is severely limited. With nothing effective to replace the price system with, socialist countries - as evidenced by the collapse of the Soviet Union and the despair that exists in countries such as North Korea - can never be as prosperous as countries which have freer markets. Ironically, while many who support socialism are also champions of economic equality, history has shown that when countries try to stamp out the spontaneous wealth generating process associated with free markets they create the worst type of inequality possible; a society where the masses starve while the central planners live like royalty".
Ungrowing
If you don't succeed, you die. That's the way of the world.
👍🏾
I wonder if it's possible to discuss these topics from libertarian POV, but without insane strawmen arguments against socialism everywhere.
Maybe with enough spontaneous order, we could achieve even that
👍👍👍👍
I feel like this video misses a few critical points.
First, there are some things that are too critical to leave to the free market (think of nuclear plants for example, but there are many markets we depend upon that can't just 'fail').
Second, unregulated free markets will produce monopolies which are terrible.
Finally, let's not assume that because it failed in the past, it will fail in the future.
Also I think your usage of evolution as support for free market is super fallacious. Yes order comes out of evolution, and order would probably come out eventually from free markets. But monopolies for example is form of order, just not what we want. Order is not everything we care about.
Actually regulated markets produce monopolies. You have it back wards.
A monopoly can exist in a free market but only for so long. A business can exist only for as long as it satisfies its customers. In a regulated market however Businesses and Governments collude with one another. Once subsidized by taxpayer dollars these institutions can remain no matter how what shady practices or immoral acts they commit (2008 housing market crash cough cough). "too big to fail" lets bail themn out says the governemnt. Its not that they're "too big to fail" it's that theyr'e bed buddies with one another.
This is where "crony capitalism" comes into play and it is no longer a free market.
In a free market whether a business succeeds or fails is left to an impartial market to decide not centralized bureaucrats who are slave to special interests.
I don't think he's necessarily advocating unregulated markets, he's just using it as an example of spontaneous order, as it's a macrostructre we are all familiar with (whether we like it or not).
He is. It's anarcho capitalism
AND THAT S WHY BITCOIN IS AWESOME!
There are so many problems with this when we look at reality. In every major economically successful culture: language, currency, standard weights and measures, and bodies of law had to be put in place first. Mass trade is impossible without these things. How can you conduct business with 10 partners if you can't agree on currency rates, don't know what they are saying, or want to measure things differently? These did NOT develop naturally or spontaneously. There is zero evidence of that. There is clear historical record going all the way back to Babylon and Sumer that show government set standards. - See the Greeks, Romans, Chinese, Indians, etc. Enforceable language standards were especially required for comprehensible fair dealing, because contracts are necessary (See 2. below). The idea that we need a standard is natural, the implementation and enforcement of a standard is not. People can naturally say "We should have standards" but it's the government, the ruling body, that selects what those standards are and enforces them for the sake of uniformity. All this so meaningful trade CAN HAPPEN on a large scale. Easy in a village where I know you and you know me, but not so between nations, states, or even cities.
And this video contains within it, right near the beginning (approx. at 2:54), the real reason governments must step in and regulate "...so long as they do not initiate force or fraud against the person or property of others."
1. What happens to common property? No single person wants to pay for ALL of the road, because everyone uses it. That which no one wants to care for but everyone demands to use must be maintained, even if it must be compulsorily done rather than voluntary (i.e. taxes).
2. People DO institute fraud and force against each other. That is why business dealings, disclosure, and contracts are regulated. Many people are NOT ethical and will not logically play according to the rules of game theory-will hurt and defraud others and will cover it up. This just in! Human beings are irrational creatures and many are selfish and stupid. Monitoring is required.
3. When trade becomes complex enough to involve one-time transactions between players, game theory (which was used to support this "natural order" argument) speaks loudest and it says something wholly different in that case- *"Screw the other person"* is the best strategy if you know they will not be playing a second round with you. Does that make everyone comfortable?
4. We can't wait and let the consequences pile up over the long-term and let the "market" alone correct itself for three reasons:
a) It presumes there is an "acceptable level" of harmed or cheated customers (who will suffer unless/until the market corrects the seller) and their rights do not matter. In the case of violence/murder/theft for profit, this can never be permissible, if we value an orderly society.
b) The market does not know man is horrible. The market is not a real person. It is an ambivalent force, much like Nature- What a man can do-and get away with- is all that matters. And mass knowledge (what everyone can agree on) is the wisdom of the crowd. If you're putting your faith in that, you should go watch the excellent video from Academy of Ideas on Conformity. The concept of price is just an agreed upon Wisdom of the masses. Though I would argue, it's the product of a true mini-oligarchy (worse!), not even the masses, because only the biggest players get a say in setting price in reality.
c) It presumes the "market" mass knowledge will discover the bad behavior from the seller through ordinary non-regulatory means. Nothing supports this at all. People dismiss as rumor what lacks evidence. There's no way to gather evidence if we can't legally compel an audit or prosecute under law (because government would be doing those things.) Angry customer reviews do not a fraudster make.
Standards are not necessary for trade to exist. Yes, standards and enforcement facilitate trade. Yes, trade flourishes within the state. But the material and intellectual resources of the state would not be possible without trade. The first writing (cuneiform) was invented to keep accounts, while advances in pottery, agriculture and metallurgy were carried along trade routes before civilization even existed.
"only the biggest players get a say in setting price." Have you never used eBay or Craigslist? Prices are set by the interactions of "small players" all the time. Who is the "big player" that "gets a say" in setting the price of a 1998 Honda Civic? Or a vintage Commodore 64? Who gets to set the price of a pack of No. 2 pencils? Of crude oil? There are relatively few markets in which one or a few participants set prices as they please. Producers have to balance the competing interests of their suppliers, their employees, and their customers. It's a highly complex web that is constantly adjusting to new circumstances.
You are correct, order can arise spontaneously. And you are correct, common social behaviors can arise spontaneously through evolution. However, the free market is a fairy tale for the greedy. The reason we have government is because the free market drives people to do greedy things for money that are not in the best interest of the society as whole. Tragedy of the commons is not because of government, it is the result of greedy people acting greedy. If you are suggesting that greedy behavior is a random phenomena that can somehow manifest in a structured system that magically benefits everyone, then you are balls deep in your fairy tale.
+bobgrinshpon We need institutions which turn this greedy into well-being for society.
It's like Adam Smith said. He did not exclude the "greedy" of man in his analyses. But tried to find a system in which this greedy turns into good for society:
Every individual… neither intends to promote the public interest, nor knows how much he is promoting it… he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.
The Wealth Of Nations, Book IV, Chapter II, p. 456, para. 9.
It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages.
The Wealth Of Nations, Book I, Chapter II, pp. 26-7, para 12.
Government is actually what the greedy love. It allows them a means by which to enforce regulations on the market that almost always benefit them in someway (or are simply nearsighted and end up being harmful in the long run. Evidence shows that free markets do not make people greedy, rather they actually become substantially more charitable. What is good for the individual is not necessarily bad for society as a whole, and markets are one of the best ways for someone to pursue their selfish desires while simultaneously helping their fellow man. Whatever isn't beneficial to society is often what adversely affects people's property (pollution, etc.) and can be dealt with without government. The tragedy of the commons is neither the result of greed nor government, but a lack of individual property rights. When a resource is collectively owned, there is not benefit to preserving the resource, as your efforts are wasted and leave you with nothing to show for it. If you have your own private property, say a field, preserving it benefits you directly. Finally, your last assertion is true. Free markets don't magically benefit everyone, they benefit everyone that innovates, works hard, and takes risks.
+TheApache412 "Whatever isn't beneficial to society is often what adversely affects people's property (pollution, etc.) and can be dealt with without government."
Some problems can obviously be dealt with without government, but we do still need government to solve all the rest. You can't even have private property without government, and any time the free market makes obviously bad decisions we need people who have the power to overrule it. For example, climate change is exactly the sort of problem that the free market would completely ignore.
Surely there are many situations where the free market is actively harmful. In any transaction there are two people whose interests are represented, the buyer and the seller. They are both benefited by each transaction and that's very good since those sorts of transactions make up a huge part of our lives. Unfortunately, if anyone else is affected by the transaction there is nothing to ensure that it will be beneficial. Building a tower can be great for the people who own the land and the people who use the building, but it can destroy the view from the street, cripple tourism, and ruin businesses that had no say in the building of the tower.
Similarly if a factory dumps toxic waste in a river its costs will be lower, its profits will be higher and its customers will be happier for having to pay smaller prices, but everyone else will suffer from having a toxic river and they'll have no way to stop it in a free market.
The free market is a powerful tool that is capable of immense good and it is the source of all prosperity, but like any tool it can be dangerous if used carelessly. We wouldn't want to trust _every_ decision to the free market.
You seem to make the mistake of assuming the enforcement of private property rights = the state or regulation. Or you assume that free market means that you can do whatever you want regardless of how it affects other people. Private companies are capable of enforcing rights (private security outnumbers cops in the US for example). If a factory dumps toxic waste in a river, they are directly polluting the land of anyone who lives on that river and violating their rights in the process. Similarly factories dumping loads of CO2 into the atmosphere, regardless of what the severity of the effects are, does effect other people's property, meaning they have a legitimate right to stop them from doing so. On the issue of climate change, even though I don't see it as the huge looming apocalypse many people seem to think it's going to be, the problem has a lot to do with oil companies patenting the technology to alternative energy sources that would be miles ahead of where they are today if not so hindered. I argue that this is violating other people's rights to do with their property as they wish. Regardless of all this, free markets don't make decisions. Individuals in free markets make decisions. Even if there were a benefit to having a centralized power to correct the "mistakes" of people who aren't violating anyone else's rights, it's not worth the fact that the people who want this power almost unanimously abuse it. It does more harm than good in my opinion.
TheApache412 "You seem to make the mistake of assuming the enforcement of private property rights = the state or regulation."
Are you saying that the enforcement of property rights could be done by something other than a government?
"You assume that free market means that you can do whatever you want regardless of how it affects other people."
No, the free market is just allowing people to freely trade property with each other. This is great for inspiring people to build industries and satisfy people's needs. Unfortunately it also inspires people do very bad things like dumping toxic waste and emitting enormous amounts of greenhouse gas. This is why the free market needs to be managed to keep its dangerous aspects in check.
"If a factory dumps toxic waste in a river, they are directly polluting the land of anyone who lives on that river and violating their rights in the process."
Exactly, and the free market has no mechanism for dealing with that problem. There are two obvious solutions. For one, the people who own land on the river could band together to form an army and destroy the source of the toxic waste. This is in violation of the rules of private property, so it will be a war between the river land owners and whoever is charged with enforcing private property.
The other obvious solution is for everyone in the market to band together to create and support an organization for the purpose of protecting our common interests, enforcing our rights, and preventing us from going to war against each other whenever the free market alone cannot resolve a problem.
"Factories dumping loads of CO2 into the atmosphere, regardless of what the severity of the effects are, does effect other people's property, meaning they have a legitimate right to stop them from doing so."
The point is that legitimate rights are meaningless in a free market. The only way legitimate rights mean anything is when there is some power that recognizes those rights and enforces them. In other words, we have rights because we have governments; the free market contributes nothing to our rights and only respects our rights to the extent that the government forces it to respect our rights.
"Private companies are capable of enforcing rights (private security outnumbers cops in the US for example)."
Those private companies cannot enforce rights without the help of the cops, no matter the numbers. The only thing that distinguishes private security companies from mercenary armies is the fact that private security companies are ruled by the law.
If we didn't have police, then the private security companies would just enforce whatever "rights" they feel like enforcing based on how much people are willing to pay. Unfortunately they will fail because the other side has decide it also has certain rights and its own private security company to enforce its version of the rights. Instead of rights, all people would have would be war.
"Regardless of all this, free markets don't make decisions. Individuals in free markets make decisions."
That doesn't mean that the free market is not responsible. The individuals who make decisions in a free market are being manipulated by the free market. The system makes people want money with the promise of almost limitless rewards from having money. A situation like that seems perfectly designed to cause even good people to be willing to do bad things.
This is why we need laws, rights, regulations, and so on to make sure that people don't abuse the free market. For example, false advertising is very damaging to the free market, but at the same time the free market encourages people to false advertise. To help the free market run smoothly, we have regulations to restrict false advertising.
"It's not worth the fact that the people who want this power almost unanimously abuse it."
Centralized control is not perfect. Abuses will always happen. We can try for a system that makes the abuse of power difficult. Democracy seems to work quite well sometimes, but there's no perfect solution. Unfortunately there is no way to run an effective free market without centralized control to manage it, so we just have to try to make the best of it.
Gnosis reveals the Invisible Hand of God.
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