"Smaller government means more efficient use of the resources of the economy" - This sentence reveals the fundamental answer to this question. The premise here is that the resources to be managed belong to the economy, not the people, not even society. At first glance, this looks ok, because we often define "economy" to mean the exchange and transformation of material values. In that sense, resources naturally belong to the economy. But at second glance, this is a rather obscene view, because when you distinguish between government and economy, then the government is the entity that manages the distribution of material resources between people and economy. The view that these resources belong to the economy in first place and the government can at best introduce inefficiencies and at worst steal resources from the economy is rather cynical. Likewise, the question "is the market more efficient than the government" is equally as misleading, because it implies that the goal of the government is the same as that of the economy. Again, as long as the economy is understood in that wide scope, the government and the people forming the economy together with businesses would be a unit. If the economy is distinct from both the government and the people, what then are the goals of these three entities respectively and which efficiency are we looking at? Then there is the issue that "the market" is much less clearly defined than it seems. A market that is dominated by monopolies is just another form of government, not employing the mechanisms of an efficient or compteitive marketplace. That can easily be seen if you compare pharma pricing in various countries. If you look at the US market from the perspective of a pharma company, this is the globally most efficient situation. From the perspective of a diabetes patient, it is not. From the perspective of someone suffering from a rare disease that does not promise a sufficient return of investment in R&D the same dissonance results from these loosely defined terms.
"There are thing only the government can do", "defense, law and order, social welfare" - Looking at the USA, all of these things can obviously be done privately, at least in part. Again, depending on whom you ask, it's better or worse. If you ask mercenary companies, private prisons, private health insurance, private educators, they will have a lot to say about benefits of freedom of choice and quality of service. Others will say that this only works for those who can afford it and best for those who don't need these services and wouldn't have to engage in solidarity. It should be obvious that categories are not the only possible division of where free markets and regulations work best, respectively. Regulations and free markets can work together, in that regulations set a framework that balance the interests of various parts of society and employ market mechanisms in the limits of regulations. The most prominent reason for why this does not work as well as could be expected is international competition (the absence of an effective government, much less an efficient one) and corruption. It's possible that a harmonious cooperation between markets and government is systematically impossible, but we have yet to test it. It's interesting to see that a highly deregulated country like the USA has an export deficit with a highly regulated country like Germany.
Scouting around the issue of extreme level of concentration across many aus industries. Got nothing to do with "wishy washy" changes in social views. Give us a break!!!
Where are the sources of waged income? and what is happening in that space? If there is no waged income available nor likely then the only solution is the intervention of the governments "novel investment" in perpetuity with the dangers of those actions managed or altered by the use of AI so that governments can explain to people why their income for that year must go down or rise. We are heading for an age of next to zero waged incomes provided by the corporate identity. Corporates' prefer AI precision waged income unless they cannot count.
"France is not very successful" - I would argue that Germany and France are very similar in their degree of regulation and taxation. Germany keeps bouncing back and forth between being the power house or the sick man in Europe. I would argue that the difference between France and Germany is probably a larger number of highly specialized family businesses in Germany that result from its decentralized structure and the long term consequences of a lack of colonies. But I would definitely not see France as a failure. Businesses in Europe certainly have to cope with more taxation and more regulation while they have to compete with both the USA and China. This is a rather tough and all but fair competition from a business perspective. Considering this, they do rather well. How much better would they do on a level playing field? How much better is a jobless person doing in the USA or France? Is it better to enjoy a private education with decades of debt burden in the USA or a clean balance in Europe?
@@mr.cromwell9472 You're right in the sense that governments should "always" assume the responsibility of regulating the market. But the reality is that insufficiently regulated markets tend toward monopoly: the big fish swallow the smaller fish. (You don't have to reach total domination by one or two entities for this monopolistic trend to concentrate wealth to a significant degree.) And as that monopolistic trend takes hold, powerful private forces essentially take over the government, resulting in government shirking its responsibility to tax wealth and regulate the market in the interest of the whole people. That leads to market excesses that create all sorts of inequities and crises--and those crises are the fault of the inadequately regulated market.
@@lawsonj39 literally everything you just said is wrong. Beginning with the very word monopoly, it means getting the grant of being the sole manufacturer/distributor/.. of a product by the GOVERNMENT. Free markets lead to competition, creative destruction etc. Unless government severely intervenes there won't be any monopoly at all and any big company eminent in their field will be so because of product excellence and or good prices. The fact that businesses 'take over the government' i.e. lobby simply underwriters the point to take power away from the government so that there is nothing to lobby about and have, you guessed it, more free market. Regulations are always useless/inefficient/unfair and should not exits. At all. Let the consumer vote with their wallet.
Efficient in what way? At outsmarting government regulation? Yes At delivering the services society needs? Yes At ensuring society maintains a stable economic system? No (but governments aren't any good at that either!) The problem is that taxation isn't redistributive, it brings in revenue that government can use to provide services but doesn't make the lowest paid wealthier - in fact it does the opposite as governments tend to buy from large companies! While taxation is also used to provide a safety net, that doesn't create opportunity for the poorest to accumulate capital (and ideas such as Universal Basic Income would only make it worse as it inflates the monetary system driving further accumulation by those with capital.) Inequality is natural in all systems, that's very different to "it's necessary" and prospect of reward isn't the key driver for effort; people naturally want to do what they are good at and add value, expecting reward for doing so is natural but not the cause of the effort. The issues society faces are driven by poor structuring of the markets by government, which is because of poorly structured aggregation of democratic authority, because of party politics. Solving that leads to better governance, a better civil service, better regulation, better markets... As an example, it's easy to fix wealth/income discrepancy - tax corporations based on wage discrepancy, the greater the discrepancy the more they pay. That not only flattens the wage curve but it increases the wealth of those lower down the hierarchy in a corporation enabling them to leave and start up their own company to compete with the large incumbent, driving efficiency in the market. Or alternatively, zero cost of basic living (as opposed to Universal Basic Income) allows people to take on risk, start up their own company, drive efficiency in the market... It's a failure to look at such alternatives that is the problem with governance, but the question "are markets more efficient than government" is the wrong question. Markets are very efficient at driving inefficiency as much as they are allowed to by government/regulation - because inefficiency is profit! It's ironic that he can't recognise the leftward drift which is the cause of his pessimism is due to the failure of governments to regulate the markets properly and deliver for society, because of a lack of understanding of how markets work by economists such as him and a dearth if ideas!
"Risk takers, Innovators have to be rewarded for success" - Wow. Sure, nobody would take risks without rewards. Thus more inequality means more innovation. It really sounds surprisingly convincing. But the assumption here is that innovation and risk taking is actually rewarded. It also assumes that more rewards result in more innovation. But what if you have sufficient funds such that it is more efficient for you to bribe someone than to innovate? What if inequality is so significant, that innovation is only accessible to the wealthy, but the wealthy have no incentive to innovate? What if it's advantageous for the wealthy monopolist to stone wall innovation in a field? What if the lazy brad and bully has all the opportunities to innovate but no brains and no motivation?
The real question is: who creates money? Banks create money each time they provide a credit. Government is coerced (by the modern system) to start its spending cycle by borrowing money (instead of creating it in the pre-modern systems). Understanding this problem can help us decide whether the market is more efficient than government or not.
NO IT DOES NOT HAVE TO TAX!. WHENEVER THERE IS A WAR IN THE OFFING GOVERNMENT GET LICENSE TO SPEND WITHOUT RESERVE, MOST OF WHICH IS NEVER PAID BACK NOR TAXED!
Such a good interview.
Market is not more efficient. Natural monopolies are everywhere
Why even bother asking this question when China literally answered this very question years ago!
CIS is sooo out of touch with the world...
"Smaller government means more efficient use of the resources of the economy" - This sentence reveals the fundamental answer to this question. The premise here is that the resources to be managed belong to the economy, not the people, not even society.
At first glance, this looks ok, because we often define "economy" to mean the exchange and transformation of material values. In that sense, resources naturally belong to the economy.
But at second glance, this is a rather obscene view, because when you distinguish between government and economy, then the government is the entity that manages the distribution of material resources between people and economy. The view that these resources belong to the economy in first place and the government can at best introduce inefficiencies and at worst steal resources from the economy is rather cynical.
Likewise, the question "is the market more efficient than the government" is equally as misleading, because it implies that the goal of the government is the same as that of the economy. Again, as long as the economy is understood in that wide scope, the government and the people forming the economy together with businesses would be a unit. If the economy is distinct from both the government and the people, what then are the goals of these three entities respectively and which efficiency are we looking at?
Then there is the issue that "the market" is much less clearly defined than it seems. A market that is dominated by monopolies is just another form of government, not employing the mechanisms of an efficient or compteitive marketplace. That can easily be seen if you compare pharma pricing in various countries. If you look at the US market from the perspective of a pharma company, this is the globally most efficient situation. From the perspective of a diabetes patient, it is not. From the perspective of someone suffering from a rare disease that does not promise a sufficient return of investment in R&D the same dissonance results from these loosely defined terms.
"There are thing only the government can do", "defense, law and order, social welfare" - Looking at the USA, all of these things can obviously be done privately, at least in part. Again, depending on whom you ask, it's better or worse. If you ask mercenary companies, private prisons, private health insurance, private educators, they will have a lot to say about benefits of freedom of choice and quality of service. Others will say that this only works for those who can afford it and best for those who don't need these services and wouldn't have to engage in solidarity.
It should be obvious that categories are not the only possible division of where free markets and regulations work best, respectively. Regulations and free markets can work together, in that regulations set a framework that balance the interests of various parts of society and employ market mechanisms in the limits of regulations. The most prominent reason for why this does not work as well as could be expected is international competition (the absence of an effective government, much less an efficient one) and corruption.
It's possible that a harmonious cooperation between markets and government is systematically impossible, but we have yet to test it.
It's interesting to see that a highly deregulated country like the USA has an export deficit with a highly regulated country like Germany.
Scouting around the issue of extreme level of concentration across many aus industries. Got nothing to do with "wishy washy" changes in social views. Give us a break!!!
Where are the sources of waged income? and what is happening in that space? If there is no waged income available nor likely then the only solution is the intervention of the governments "novel investment" in perpetuity with the dangers of those actions managed or altered by the use of AI so that governments can explain to people why their income for that year must go down or rise. We are heading for an age of next to zero waged incomes provided by the corporate identity. Corporates' prefer AI precision waged income unless they cannot count.
"France is not very successful" - I would argue that Germany and France are very similar in their degree of regulation and taxation. Germany keeps bouncing back and forth between being the power house or the sick man in Europe. I would argue that the difference between France and Germany is probably a larger number of highly specialized family businesses in Germany that result from its decentralized structure and the long term consequences of a lack of colonies. But I would definitely not see France as a failure.
Businesses in Europe certainly have to cope with more taxation and more regulation while they have to compete with both the USA and China. This is a rather tough and all but fair competition from a business perspective. Considering this, they do rather well. How much better would they do on a level playing field?
How much better is a jobless person doing in the USA or France?
Is it better to enjoy a private education with decades of debt burden in the USA or a clean balance in Europe?
Market more efficient !? Are we talking about the same market that created global financial crisis in 2007 !? Complete delusion 😊
The market got the government's incentives and efficiently acted upon them. It's not the market's fault for any big crisis, it is the state's. Always.
@@mr.cromwell9472 You're right in the sense that governments should "always" assume the responsibility of regulating the market. But the reality is that insufficiently regulated markets tend toward monopoly: the big fish swallow the smaller fish. (You don't have to reach total domination by one or two entities for this monopolistic trend to concentrate wealth to a significant degree.) And as that monopolistic trend takes hold, powerful private forces essentially take over the government, resulting in government shirking its responsibility to tax wealth and regulate the market in the interest of the whole people. That leads to market excesses that create all sorts of inequities and crises--and those crises are the fault of the inadequately regulated market.
@@lawsonj39 literally everything you just said is wrong. Beginning with the very word monopoly, it means getting the grant of being the sole manufacturer/distributor/.. of a product by the GOVERNMENT. Free markets lead to competition, creative destruction etc. Unless government severely intervenes there won't be any monopoly at all and any big company eminent in their field will be so because of product excellence and or good prices.
The fact that businesses 'take over the government' i.e. lobby simply underwriters the point to take power away from the government so that there is nothing to lobby about and have, you guessed it, more free market.
Regulations are always useless/inefficient/unfair and should not exits. At all. Let the consumer vote with their wallet.
Ok random TH-cam guy. I guess we should let the government create TH-cam and the iPhone you used. Completely delusional.
Efficient in what way?
At outsmarting government regulation? Yes
At delivering the services society needs? Yes
At ensuring society maintains a stable economic system? No (but governments aren't any good at that either!)
The problem is that taxation isn't redistributive, it brings in revenue that government can use to provide services but doesn't make the lowest paid wealthier - in fact it does the opposite as governments tend to buy from large companies! While taxation is also used to provide a safety net, that doesn't create opportunity for the poorest to accumulate capital (and ideas such as Universal Basic Income would only make it worse as it inflates the monetary system driving further accumulation by those with capital.)
Inequality is natural in all systems, that's very different to "it's necessary" and prospect of reward isn't the key driver for effort; people naturally want to do what they are good at and add value, expecting reward for doing so is natural but not the cause of the effort.
The issues society faces are driven by poor structuring of the markets by government, which is because of poorly structured aggregation of democratic authority, because of party politics. Solving that leads to better governance, a better civil service, better regulation, better markets...
As an example, it's easy to fix wealth/income discrepancy - tax corporations based on wage discrepancy, the greater the discrepancy the more they pay. That not only flattens the wage curve but it increases the wealth of those lower down the hierarchy in a corporation enabling them to leave and start up their own company to compete with the large incumbent, driving efficiency in the market.
Or alternatively, zero cost of basic living (as opposed to Universal Basic Income) allows people to take on risk, start up their own company, drive efficiency in the market...
It's a failure to look at such alternatives that is the problem with governance, but the question "are markets more efficient than government" is the wrong question. Markets are very efficient at driving inefficiency as much as they are allowed to by government/regulation - because inefficiency is profit!
It's ironic that he can't recognise the leftward drift which is the cause of his pessimism is due to the failure of governments to regulate the markets properly and deliver for society, because of a lack of understanding of how markets work by economists such as him and a dearth if ideas!
💯👍
Interesting
"Risk takers, Innovators have to be rewarded for success" - Wow. Sure, nobody would take risks without rewards. Thus more inequality means more innovation.
It really sounds surprisingly convincing. But the assumption here is that innovation and risk taking is actually rewarded. It also assumes that more rewards result in more innovation.
But what if you have sufficient funds such that it is more efficient for you to bribe someone than to innovate? What if inequality is so significant, that innovation is only accessible to the wealthy, but the wealthy have no incentive to innovate? What if it's advantageous for the wealthy monopolist to stone wall innovation in a field?
What if the lazy brad and bully has all the opportunities to innovate but no brains and no motivation?
No without fair regulation.
“FAIR”LOL
The regulators can be persuaded so easily
@@econrith and when there's only one system users cannot move
@@econrithbought and sold even
The real question is: who creates money? Banks create money each time they provide a credit. Government is coerced (by the modern system) to start its spending cycle by borrowing money (instead of creating it in the pre-modern systems). Understanding this problem can help us decide whether the market is more efficient than government or not.
20th century thinking.
NO IT DOES NOT HAVE TO TAX!. WHENEVER THERE IS A WAR IN THE OFFING GOVERNMENT GET LICENSE TO SPEND WITHOUT RESERVE, MOST OF WHICH IS NEVER PAID BACK NOR TAXED!
NDIS 😂
Yes.