"When Corporations Hate Markets"

[Universe Prince]

No one knows how Libertarians propose to keep monopolistic companies from abusing the public.

Again you speak from a place of ignorance. Finding out what libertarians propose regarding monopolies and abuse is not difficult. You should put forth some effort to at least have the courtesy to ask questions rather than make ignorant and idiotic pronouncements.

Coke has a right to make deals with restaurants for lower prices on Coke products if it agrees to sell no Pepsi products. because the public can choose to go to another restaurant. The customer's right to order a 7-up is nullified by Coca Cola's desire to sell Sprite and Pepsi's desire to peddle Sierra Mist.

First of all, you're assuming that having specifically a 7-Up in a restaurant is a right. Feel free to set out that argument, but I doubt you can produce one with any substance. Second, yes, private businesses have a right to negotiate contracts they feel benefit them, and you have not provided a single reason why this should not be so. To present this as some sort of criticism of libertarian ideas, or any ideas other than your own, is at once ignorant and juvenile. Your complaint amounts to "It's not fair that I can't have my way all the time." Which is selfish, shallow and unrealistic.

Credit card companies can charge usurious fees because the consumer has the option of not using the card.

Or finding a different card, or using a debt card or a checking card. Yes, I get that you want someone hold your hand and make sure you never face any bad consequences. But that is ridiculous. And again, you speak from ignorance. I would be highly surprised if you had done any investigation into what various libertarians think about credit card fees and changing contracts. You seem to assume that if you don't know what the position is there must not be one, or that it is merely to allow any business to do whatever it pleases. A simple solution to this problem is for you to ask questions, but you don't to do this. You assume based on nothing more than your fictive conjecture.

Those EULA agreements we see on software, saying that the software is designed for no specific purpose and the consumer has no right to sue or get his money back if it does not work, wrecks other data on his computer or destrys the hard disk or any other equipment? They are also okay for Libertarians, because the consumer can choose not to buy Windows, and can choose not to agree to the terms of the EULA.

More ignorance on display. Libertarians generally take issue with EULAs ("EULA agreement" is redundant, like "ATM machine") because they are unfair in the sense the user is supposedly bound by an agreement to which he has not actually agreed and usually cannot even see until he has purchased the product in the first place.

If you are the expert on Libertarian principles that you seem to want us to think you are, you could actually EXPLAIN what it is that Libertarian principles actually are on these and other issues.

I make no claims of being an expert on anything. But clearly I have more knowledge than you do on libertarian positions. Having more knowledge than you do is all the authority I need to criticize your ignorant misrepresentations of libertarianism. But feel free to ask me questions about libertarianism. I'll be happy to answer as best I can and if I don't know the answer, I'll find one.

I agree with Libertarians on how the War on Drugs is a huge amount of wasted money, especially enforcing laws against pot, which is easy to detect. I agree that there is no reason why a license should be required to braid hair or do interior design. I am less sure about having no restrictions on those caring for children or the elderly, where ther possibility of harm goes beyond being bald or living in a hovel of bad taste.

I don't recall anyone suggesting there should never be any licensing for anything.

I disagree that laws against monopolies and guarantee competition are a bad thing.

Fine. No one says you have to agree. But one of the problems is the laws you seem to think guarantee competition do no such thing.

I think people have a right to expect more from a government than just protection from thugs and invading armies.

Most libertarians that are not also anarchists (which is to say, most libertarians actually) would agree with that.

[Xavier_Onassis]

I disagree that laws against monopolies and guarantee competition are a bad thing.


Fine. No one says you have to agree. But one of the problems is the laws you seem to think guarantee competition do no such thing.
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I did not say that I thought that current laws guarantee competition. Some don't seem to.
But it is possible to write laws that do, and such laws should be enacted and enforced.
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I would be highly surprised if you had done any investigation into what various libertarians think about credit card fees and changing contracts.
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Okay, so what would that be?

Look. Libertarians are so few in number and disagree with one another so often that no one knows what they think. I suppose you could reveal what you think, but you seem to me more interested in calling me names.

I think that cellphones contracts are unfair and that a customer has a right to decent service. If the service sucks and he gets one dropped call after another, then he should not have to pay. I don't think companies like Coke and Pepsi have any right to offer exclusive contracts on their products to intermediaries like restaurants. I also think that huge fees for a payment missed by a week or so are usury and should be banned.

If Libertarians disagree with this, they can go screw themselves. They are about as likely as Vegetarians or Prohibitionists to get elected, anyway. 

[Universe Prince]

I did not say that I thought that current laws guarantee competition. Some don't seem to.
But it is possible to write laws that do, and such laws should be enacted and enforced.

Possibly, if we're talking about laws that prevent government from onerous meddling. But I doubt that.

I would be highly surprised if you had done any investigation into what various libertarians think about credit card fees and changing contracts.
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Okay, so what would that be?

Pooh yi. The sort of contract change you speak of is something I doubt libertarians advocate. I've never seen them advocate something like that. I have little inclination to go look it up for you, but I'll see what I can find.

Look. Libertarians are so few in number and disagree with one another so often that no one knows what they think.

Yeah, except for all the people who write blogs and magazines and books about libertarian ideas. Here is a word for you: research. Libertarian thought is not so difficult to find as you make it out to be. Simple search on Google could get you started.

I suppose you could reveal what you think, but you seem to me more interested in calling me names.

I'm quite happy to reveal what I think, and I have on numerous occasions. If you're offended that I point you don't know what you're talking about, then try learning something about it.

I think that cellphones contracts are unfair and that a customer has a right to decent service. If the service sucks and he gets one dropped call after another, then he should not have to pay. I don't think companies like Coke and Pepsi have any right to offer exclusive contracts on their products to intermediaries like restaurants. I also think that huge fees for a payment missed by a week or so are usury and should be banned.

If Libertarians disagree with this, they can go screw themselves. They are about as likely as Vegetarians or Prohibitionists to get elected, anyway.

You make proclamations about what you think, providing not even a single argument to support your position, and then insist if libertarians disagree with you, "they can go screw themselves." Okay, so you're, what, 13 years old? Are you going to tell me next that you'll take your ball and go home? When you're prepared for life outside the sandbox, let me know.

[Universe Prince]

Steven Horwitz's part in the "When Corporations Hate Markets" discussion is up. An excerpt:

Second, in the cases where state-provided goods and services could be better supplied in the market, the real goal is not “privatization” but “de-monopolization.” What advocates of free markets should be arguing is that the monopoly privilege bestowed by government is the source of trouble, regardless of whether the organization receiving that privilege is public or private. Rather than selling off or contracting out these monopoly privileges, we should abolish them and reduce any other barriers to entry in the industries in question. Similarly, Long’s discussion of “de-regulation” can be applied to other examples. Removing limits on what private sector firms can do while simultaneously cushioning or completely bailing them out for their losses is not “de-regulation” as libertarians understand it. This pattern has been particularly common in the financial industry, which is itself a model of the sort of corporatism that both libertarians and the left should oppose, despite simplistic recent commentary referring to it as a “free market.” Long’s example of the current troubles is to the point, as I have argued elsewhere. The same argument has been made about the Savings and Loan crisis in the 1980s. S&Ls were indeed “de-regulated” in the sense that they were allowed to expand into commercial real estate. However, at the same time, the maximum level of deposit insurance was raised substantially, protecting the S&Ls from the full costs of taking on too much risk. Add in then-current laws that made it very difficult for S&Ls to branch across state lines and diversify their portfolios and thereby reduce their exposure to risk, and this combination of “more choice, less responsibility” turned disastrous. Making the fine distinctions Long is doing is absolutely critical to understanding both what a “freed market” would look like and why existing problems cannot be simplistically blamed on “free markets” or “de-regulation.” In fact, what is often missed in these discussions is that genuine market competition is a form of regulation. Competition disciplines firms to meet the wants of consumers at prices they can afford. Profits signal firms to continue in the same general direction, while losses guide them toward change. The prices, profits, and losses in a truly free market perform a variety of “regulatory” functions. Much of the discussion about markets and regulation would be improved if we focused more on comparative analyses of what sorts of institutions regulate firm behavior in what sorts of ways and toward what ends, rather than throwing around “de-regulation” in the sloppy ways it has been used.

[Xavier_Onassis]

Sure, competition is a form of regulation. The difficulty is that it is a flawed form of regulation when the actual value of the items being sold is vague. This was what happened with the bundled mortgages. They were rated as highly safe and insured by credit swaps, but in effect the ratings were bogus and the credit swaps were useless or at least inadequate as insurance.

[Universe Prince]

Sure, competition is a form of regulation. The difficulty is that it is a flawed form of regulation when the actual value of the items being sold is vague.

When is the actual value of an item ever not vague? Your criticism is meaningless.

[Universe Prince]

The final essay in this Cato hosted discussion comes from Dean Baker. An excerpt:

While there may be areas in which patents are an effective policy for promoting innovation, the abuses associated with patents for prescription drugs should be libertarians’ poster child for government policy gone crazy. The country is projected to spend almost $250 billion for prescription drugs this year (more than $800 per person). In the absence of government patent monopolies, we would spend close to one-tenth of this amount. Those generic drugs that Wal-Mart can profitably sell for $4 a prescription are not chemically distinct from the brand name drugs that can cost several hundred dollars. [...] In fact, progressives very often get the story quite wrong in characterizing issues as “government versus market.” Certainly the current financial crisis provides an obvious example of such confusion. No one was really pushing for “deregulation” in the sense of getting the government completely out of the market. The financial industry’s agenda was to get one-sided deregulation. They wanted to preserve the government security blanket of “too big to fail,” while removing prudential controls that limited their ability to take on risk. In effect, what the financial industry wanted (and got) was government insurance that they didn’t have to pay for. This surely is not the libertarian agenda; this is the agenda of a politically powerful industry (with allies in both major parties) that will get everything it can out of Washington.

[Xavier_Onassis]

When is the actual value of an item ever not vague? Your criticism is meaningless.
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I was referring, of course to those ostensibly "insured" bundled mortgages.

Are they worth the original amount borrowed? A $300K loan on a house whose value has sunk to $250K is obviously NOT worth $300K. To buy that loan, it would need to be unbundled and reevaluated, which would also have its costs, so it is probably not even worth $250K.

And the derivatives of these loans are also of dubious value.

So my criticism is NOT "meaningless", it is at the root of the problem. I suggest this is why Paulson did not try to buy back these loans as he said he was going to do--the value of them is too vague
, and the prce is controversial, to say the least.