republican economics

[rob]

I don't think it requires an abstract theory of either human nature or economics to conclude that people were engaging in production and exchange long before there was...written language...much less a formalized theory to tell them how or why to do either.

 

Market processes don't require market theories in order to function. This fact seems to be quite disconcerting to a broad class of activists and intellectuals, who do require market theories in order to function.

 

Markets aren't an inherent thing. They are social constructs, and therefore need rules. They are not a natural process and the uncontrolled practice of it is not superior. If you just "leave it alone" things won't get better, because greed and selfishness ARE inherent, and they regularly interfere with and undermine human enterprise.

 

So - there was complete anarchy before we had abstract models and formalized mathematical representations of them administered by a central authority who had the foresight to translate them into a set of laws?

 

Per your definition, nothing that humans engage in is a natural process since everything from sex to defecation to eating is governed by an ornate set of rules and norms associated with a local and mutable social context.

 

Humans have been engaged in production and exchange as long as there have been humans. There has never been a time when they have done so in the absence of a complex set of rules and norms that governed the said activities.

 

The idea that all of the rules and norms that govern human interactions owes its existence to a formal rule-making body that imposed them on society in a top down fashion is as ahistorical as it is irrational. Where do you think things like commercial contracts, letters of credit, titles, liens, fractional reserve banking, stocks, bonds, liability, etc came from? Do you really think that they were designed in a room somewhere by a committee of intellectuals who were able to look into the future and determine that they'd be necessary to regulate commerce someday?

 

 

 

Who said anything about anarchy? Just because something is not optimal doesn't mean it's anarchistic. Anarchy doesn't really exist, there are always rules, implicit or otherwise. It's not black and white.

 

Are you saying that markets were born pure? Give me a break, you can't really believe that.

 

As we become more advanced, we can learn things we are doing that are not efficient and we can improve upon them. Democracy is not inherent; we invented it, and improved upon it over the course of thousands of years. We can also improve upon markets, by figuring out what works well and what doesn't. That sounds a lot better to me than leaving everything to chance, and letting the most powerful agents rise to the top, and then trusting that "everything will work itself out."

 

Why have rules at all? Why not just let EVERYTHING "work itself out" ?? If you want to have free markets and believe that the free market system will police itself, why not have free EVERYTHING. Abolish ALL laws. It will all just work out, right?

Edited September 17, 2010 by rob

[Mal_Con]

Real Republican Economics pretty similar to real Democratic economics, both just sustain the corporate interests who pay for their ads. Their public statements are different as are the Dems what really matters is how they act. Both parties SAY it will be different this time.

[Jim]

Why have rules at all? Why not just let EVERYTHING "work itself out" ?? If you want to have free markets and believe that the free market system will police itself, why not have free EVERYTHING. Abolish ALL laws. It will all just work out, right?

 

Seems that the financial experiment of the last 10 years is a pretty good indicator of trying Plan B - some regulation is needed. Duh.

[j_b]

it's not the last 10 years, it's the last 30+ years, including the Clinton and Carter administrations policies of deregulation.

[rob]

Free markets and communism are opposite ends of the spectrum, but similar in that they both sound good on paper, but don't actually work in real life.

[JayB]

I don't think it requires an abstract theory of either human nature or economics to conclude that people were engaging in production and exchange long before there was...written language...much less a formalized theory to tell them how or why to do either.

 

Market processes don't require market theories in order to function. This fact seems to be quite disconcerting to a broad class of activists and intellectuals, who do require market theories in order to function.

 

Markets aren't an inherent thing. They are social constructs, and therefore need rules. They are not a natural process and the uncontrolled practice of it is not superior. If you just "leave it alone" things won't get better, because greed and selfishness ARE inherent, and they regularly interfere with and undermine human enterprise.

 

So - there was complete anarchy before we had abstract models and formalized mathematical representations of them administered by a central authority who had the foresight to translate them into a set of laws?

 

Per your definition, nothing that humans engage in is a natural process since everything from sex to defecation to eating is governed by an ornate set of rules and norms associated with a local and mutable social context.

 

Humans have been engaged in production and exchange as long as there have been humans. There has never been a time when they have done so in the absence of a complex set of rules and norms that governed the said activities.

 

The idea that all of the rules and norms that govern human interactions owes its existence to a formal rule-making body that imposed them on society in a top down fashion is as ahistorical as it is irrational. Where do you think things like commercial contracts, letters of credit, titles, liens, fractional reserve banking, stocks, bonds, liability, etc came from? Do you really think that they were designed in a room somewhere by a committee of intellectuals who were able to look into the future and determine that they'd be necessary to regulate commerce someday?

 

 

 

Who said anything about anarchy? Just because something is not optimal doesn't mean it's anarchistic. Anarchy doesn't really exist, there are always rules, implicit or otherwise. It's not black and white.

 

Are you saying that markets were born pure? Give me a break, you can't really believe that.

 

As we become more advanced, we can learn things we are doing that are not efficient and we can improve upon them. Democracy is not inherent; we invented it, and improved upon it over the course of thousands of years. We can also improve upon markets, by figuring out what works well and what doesn't. That sounds a lot better to me than leaving everything to chance, and letting the most powerful agents rise to the top, and then trusting that "everything will work itself out."

 

Why have rules at all? Why not just let EVERYTHING "work itself out" ?? If you want to have free markets and believe that the free market system will police itself, why not have free EVERYTHING. Abolish ALL laws. It will all just work out, right?

 

What I was arguing against was the notion that without an abstract model of the economy to guide our thinking, the economy would cease to operate.

 

Economy activity predates our ability to do much abstract thinking about it at all, and certainly predates the arrival of formal models that seek to explain how it operates. Moreover - the formal legal and informal social mechanisms that govern exchange have been around for a long time. Quite a bit longer than there have been any formalized theories to guide either.

 

It's far from clear that the simple existence of a formal theory of the economy is actually beneficial in all cases. The economic model at the heart of communism and socialism, which attempts to substitute a central bureaucracy for market mechanisms, is worse than nothing. It has been an unmitigated disaster wherever it has been implemented according to the official playbook.

 

Bureaucracies are great for enforcing rules, they aren't so good at determining the "right" price for carrots, or determining how many screwdrivers can be imported in a given year, which crops a farmer should plant, etc, etc. That's assuming they operate free of political incentives, which they don't. Once you factor that reality in, the picture gets even worse - and you get gems like the Corn Ethanol Subsidy, "Cash for Clunkers," the mortgage interest deduction, etc, etc, etc.

 

The corn ethanol program is worse than nothing. Cash for clunkers was worse than nothing. Farm subsidies are worse than nothing. I could go on forever.

 

Given a choice between a model of the economy that fosters the delusion that the government can determine, say - the "right" price of corn - no model whatsoever I'd gladly choose the latter.