Hong Kong will be interesting to watch over time. Even in the free-wheeling British daya, they still had a bit of interference from the Crown. Norway & Sweden may be pretty lax with tariffs and such, but anytime you have state-run industries (utilities, media, energy), that is enough government interference for me. Same with Britain and Germany, though the EU has cut back on many of the tariff/trade issues among member states.

I think we’ve both established that we agree on the feasibility of a truly free market, and that’s a lot of common ground.

Thanks again!

Just for the record, the antisocialist is no Republican — young, starch-collared, or otherwise — and in fact loathes the right almost as much as he loathes the left. Actually, the term “classic liberal” is probably best-suited to the antisocialist’s politics, in tradition of, for example, Bastiat or Ludwig von Mises.

The last thing we want to do here is stomp all over Bagel’s box (and, Bagel, I never thought I’d live long enough to see the day I’d be saying that) with yet another boring economic dithyrambic. You did, however, say one thing that warrents a quick response.

Soylent Ape wrote: > For that matter, show me a decent-sized economy that has a truly neutral government sector.

Hong Kong, until fairly recently, was for many years a stupendous example of the inherent harmony of free-markets. Also, Elizabeth’s England. Norway and Sweden both have long histories of phenomenally successful economies that were, by and large, free. But of course, no country has seen such economic prosperity in such a short amount of time as the United States of America in its early days, when, based upon the primacy of individual rights, including property rights, it was the most liberty-drunk country the world has ever known.

That fact in and of itself is, in the antisocialist’s opinion, all the argument one needs for getting government out of business, just as they should stay out of religion, and for the exact same reasons.

Thank you again.

A decade ago, you and I would be fellows. I was a starch-collared, Young Republican, business major who learned about the glories of the free market. I took to heart the concept of the market as a self-regulating organism of supply and demand forces. It was all dreamily ideal.

Then, I had a revelation: I’ve never lived in a free-market economy. In my life, the trend has been overwhelmingly toward deregulation, and “antitrust” has become less and less a problem. (The last real smackdown seemed to be the Internet Explorer case, in which MS prevailed. This would seem to bring things closer to equilibrium, but the other factors did not remain stagnant. Over time, government has provided more and more incentives to the supply side of the trade equation. This goes far beyond laissez-faire. Smith’s “invisible hand” would seem to be handing GM and Google a check. If making a bet on capital vs. demand power in this environment, the smart money is on capital. Which side will prevail in the GM/UAW strike? Whichever can afford to hold out longer.

I would like to see a viable, truly free market model in action. Unfortunately, there are none to be found. Anarcho-capitalism would be a free market to the Nth Degree. No boundaries, restrictions or counterbalances. In fact, Everything would be a function of the market. However, I am not aware of such a model on a significantly large scale. For that matter, show me a decent-sized economy that has a truly neutral government sector. Having the government incentivize market suppliers is but a few steps away from a centrally-planned economy–and we know how disastrous they can be. I think we’re both on the same page about free markets, only I know that we’ll never be able to overcome the influence of large companies over the state’s purse strings. Tariffs offset the corporate welfare without getting in its way. Unions support them, and their influence somewhat offsets that of companies and their lobbyists, so that seems like a logical way ’round.

The DiLorenzo claim seems a bit dubious. Not on his part but on the part of GM when, years later, they had the luxury of saying “we didn’t want our product to be too well-made or too inexpensive, or else the Big, Bad FTC would come and break us up.” Face it, Japanese cars were not so high-quality upon their initial introduction into the U. S. market. (For instance, how many ‘76 Toyota Coronas or Datsun 200 pickups do see on the road these days? Probably fewer than ‘76 Chevy Caprices or Chevy Silverado trucks.) Also, thanks to tariffs, the price gap was not as huge as might have been. The popularity of Japanese cars in the 60s-80s was a benevolent accident when a looming energy crunch and infationary market forces made having a light, fuel-efficient car a desirable thing. Today, Toyotas and Hondas are just as big and comfy as American gas guzzlers. I have not seen (though my research is far from exhaustive) an official documentation of GM’s market share policy dated from that time.

I’m glad you agree that the Fed is completely wack. Ricardo tells us that inflation is foremost a function of how much money and credit is available. The Reserve has been printing money like coked-up Romanian counterfeiters and the cut last week was the last straw for many foreign investors, confidence-wise. Bernanke put us in a position where he couldn’t raise the interest rate without having hari-kiri in the streets and couldn’t drop ‘em (adequately) without causing a market bloodbath. It almost seems like the Reserve wanted to destroy the dollar, in order to replace it with a new currency. A precious metal standard is crucial, Keynes be damned! That being said, there are other factors involved in inflation, as you know. Hence, my advocacy of tariffs.

Thanx again for coming by. I love me some economics!

amazing what a little education and $1.35 a day wage scale will do for a company isn’t it?

In a nutshell, our government stuck a dick in us, and we continue to consent to the ravaging.

Soylent Ape wrote: > In the ’70s and ’80s, their metaphorical gums bleeding from their brief showdown with the Germans and Japanese, American auto manufacturers moved a great deal of production to Canadian plants to increase profits, thus saving their dinosaur asses for a coupla extra decades.

With respect, Soylent Ape, you’re forgetting, it seems, several crucial factors motivating this move — for starters, the exact thing you advocate in your next paragraph: namely, mercantilism (i.e. tariffs and trade restrictions).

Starting in 1890, antitrust legislation, which is mercantilism writ large, has been destroying American businesses piecemeal — or if not destroying them outright, causing them to spend millions and millions and millions of dollars in fatuous lawsuits. From Alcoa, to the Brown Shoe Company, to IBM (the Microsoft of 1969), to RCA, to Pan Am, to hundreds more (see Dominick Armentano’s landmark book on the subject), antitrust legislation, has, for over a century now, made American businesses more and more afraid of doing business in their own country. Why? These companies are statedly afraid of “arbitrary governmental decree.”

GM’s official policy, from 1937 until 1956, was never to let its market share top 45 percent. Thus, division managers were instructed to make sure that GM cars were not too high quality or too low priced. “This fear of antitrust prosecution made GM a less competitive company, and it was therefore incapable of effectively competing when Japanese and German automakers began dominating the U.S. auto market in the 1970s” (Doctor Thomas Dilorenzo).

That, continues Doctor Dilorenzo, is only part of the story: virtually every American industry was financially strangulated by protectionist laws (thousands on the books since the 1970’s), in addition to the threat of bureaucratic legislation and the very real fear of antitrust lawsuits (this, mind you, is not just the car industry we’re talking about but American industry in general, all of which industries are interdependent) — so much so that it’s become unprofitable and risky to mass manufacture in this country. But you, sir, make it sound as if the American consumer is suddenly to blame for not wanting to spend a lot more hard-earned money on goods (”Finally, we, the American people, can’t walk away from this with clean hands. By buying dirt-cheap Chinese-made products, we have helped to explode the nearly-unfathomable trade deficit and sending American manufacturers abroad”). The antisocialist, for one, cannot always afford the more expensive products you now tell us we must buy (or be culpable), but in fact you are dangerously over-simplifying the economic factors at work here. If you doubt it, ask yourself this: what as a businessman would you yourself do in such a dicey scenario? Would you want to risk, day in and day out, being sued for millions and millions? Would you not want to cut your manufacturing costs? Could you afford not to? As a consumer yourself, do you really expect all of us who are struggling, to varying degrees, to make ends meet, suddenly now to start spending $20,000.00 on our cars instead of $7,000.00, simply because you say we don’t have enough restrictions in place? The antisocialists believes that you do greatly misrepresent the scenario when you do not mention at all the glut of government regulations and restrictions already in place, all of which, almost without exception, have only served to make it very difficult to produce inexpensively in the United States.

In virtually the same breath, then, you call for still more government regulation as the solution to our problems. To wit, you say that Canada is partly to blame for not “helping to maintain a level of scarcity (restricting imports) which would have kept their economic growth in check. The U. S. Government, particularly under the Bush administration, has a big hand in this, as well, by allowing U. S. companies to make products abroad with little or no tariffs or other considerations, not regulating the credit industry …”

Markets, in other words, aren’t capable of regulating themselves; rather, government bureaucrats, with their attendent army of lobby groups and pressure groups, must do it for us.

The current ethanol industry alone, I would think, would be enough to sour you on these tariffs you call for. Corn syrup, for example, is used in about every soft drink and candy imaginable. It’s also used in over fifty percent of food products. Thus, right now corn that’s normally used for other things, such as tortillas or Coca-Cola, is going into ethanol manufacturing. Therefore, any products containing corn are increasing in price. And since the corn normally used for these things is being diverted, via government subsidies (which you and I are also paying for), we’re having in addition to pay more for our food products.

Corn farmers, corn producers, and ethanol engineers all, of course, want the ethanol bandwagon to keep on rolling, rolling, rolling. Which is understandable since they’re all getting fat off our subsidies, which environmentalism is also in large part responsible for. Not coincidentally, these same ethanol producers are also demanding — and getting — high tariffs placed on ethanol imports, despite the fact that home-grown ethanol is rife with ramifications, and despite the fact that ethanol can be produced much more efficiently from sugarcane, which we can import from South America far cheaper than we can produce ethanol at home. Do you begin to see? The problem is the usual problem: lobby groups, political pandering, and big bureaucracy, which you seem to advocate. There is a very simple solution: ax all import tariffs on ethanol including, most importantly, Brazilian sugarcane import tariffs; simultaneously do away with all subsidization of all ethanol production.

Let free markets be.

The whole history of tariffs and trade restrictions has been pure poison to every economy that implements them. Indeed, this was the whole impetus behind the American Revolution, and the framers of the Constitution specifically addressed the unconstitutionality of tariffs and protectionism by swearing into law the Commerce Clause, which “outlaws protectionist tariffs,” thereby making the United States a “free-trade zone.” The Constitution also specifically prohibits export taxes “to encourage international commerce.” The Due Process Clause of the Fifth Amendment was also put into place as a safeguard against “arbitrary government usurpations of property.” One could easily argue, in other words — and I’m prepared to do it — that these tarrifs and restrictions you want are entirely unconstitutional.

You are, however, correct in impying that this big (leftwing) governmental monster The Federal Reserve, printing money not backed by anything of actual value, is very much to blame. Indeed, The Fed should be done away with as soon as humanly possible.

Thank you very, very much for your indulgence.

LK

Check the lolfeeds for this.