The "Magic Market" Myth

[RodISHI]

Why do we need the government to step in on banking? You can't figure out how to handle your own money?

Because the current big banks are nothing more than low life thugs who have finagle their wares via payofffs at the highest levels and eveywhere they could get their foot in the door.

Because banks have used extortionate means to further their own agendas regardless the cost to this nation.

Because banks have made more paper shuffles and creative accounting to increase their own bottom lines while the CEO's filled their pocket books. They have gotten away with these bait and switch practices for so long now the banks believe they have that right and no one will stop them because they are to big to take on and purportedly would ruin the nation if they failed (what a crock of shit).

Because banks have throughally poisoned the nation with their illegitimate practices of switch and bait and creative accounting. They have became so accustom to dipping into the national cookie jar they believe that is now an absoulte right that they own everyones elses dollar in this nation and other nations too.

The banking/insurance agenda is a disease that needs to be treated with a shakedown that will break the bankers so hard that they do not have the ability or even the will to even considering a come back to do it again.

 

[Toro]

On the contrary, empirical evidence has borne out the reality that anything near perfect competition or a legitimately free market is a conceptual illusion, which is why I find it odd that anarchists and other libertarian socialists are portrayed as naive utopianists.

We are aware that socioeconomic afflictions increased during the neoliberal regimes of Reagan and Thatcher, yet we should also retain an awareness that the capitalist model has genuine efficiency problems, a fact recognized even by orthodox economists. To maximize both socioeconomic utility and standard forms of production and manufacturing efficiency, we'd need a socialist economy, specifically a decentralized, libertarian socialist economy, governed in the libertarian municipalist manner of Murray Bookchin.

Empirical evidence against the socioeconomic benefits and efficiency of a socialist economy is not abundant, as the anti-socialist will inappropriately refer to the state capitalism of the Soviet Union and similar models. On theoretical grounds, I find it similarly odd that Ludwig von Mises's economic calculation argument continues to be recycled when Enrico Barone formulated a Pareto efficient model of a socialist economy years before Mises formulated his respective argument. (Though some claim that he overextended the usefulness of shadow pricing.) Similarly, Mises reverted from his theoretical criticisms to practical criticisms when Oskar Lange and Fred Taylor were able to devise a model of a socialist economy that he, Hayek, and the rest of the Austrian school were unable to effectively rebut. Even Joseph Schumpeter was able to casually dismantle Mises's argument in Capitalism, Socialism, and Democracy, which ultimately aimed to demonstrate that a socialist economy and society was inadvisable.

Hence, I would argue that the merits of a socialist economy should certainly be considered more thoroughly.

Nobody outside of academia talks about perfect competition or legitimately free markets. Those are models and frameworks.

What we do know is that countries that are freer create more wealth for their citizens and provide a higher standard of living.

We know for example that stronger property rights increase investment.
http://www.econ.yale.edu/~cru2/pdf/goldsteinudry2008.pdf

And standards of living

http://www.utdt.edu/~eschargr/PropertyRights-March13-2006.pdf

The lack of property rights can destroy an economy.

http://www.cato.org/pubs/edb/edb4.pdf

We know that lower corporate tax rates also means higher investment....

http://www.cdhowe.org/pdf/commentary_254.pdf

... while higher corporate tax rates means lower wages

We examine the extent to which taxes on corporate income are shifted onto the workforce in the form of lower wages. We use data on 23,000 companies located in 10 countries over the period 1993-2003. We identify two channels by which taxes can affect wages: indirectly through a lower capital stock, and more directly through wage bargaining for net of tax, location-specific rents. We find that a significant part of the effective incidence of the tax falls on wages. Our central estimate is that 54% of any additional tax is passed on in lower wages, even in the short run; other estimates are larger than this. In the longer run, a $1 rise in the tax liability results in a fall in total employee compensation in excess of $1.

http://users.ox.ac.uk/~mast1732/RePEc/pdf/WP0707.pdf

We know that globalization and trade increases wealth

Between 1980 and 2000, trade in goods and services expanded from 23 to 46 percent of gross domestic product (GDP) in China and from 19 to 30 percent in India.

- Between 1981 and 2001 the percentage of rural people living on less than $1 a day decreased from 79 to 27 percent in China, 63 to 42 percent in India, and 55 to 11 percent in Indonesia.

- Of the more than 400 million Chinese lifted above the international poverty line between 1981 and 2001, three fourths got there by 1987.

A recent study by Gordon H. Hanson of the University of California, San Diego, which took into account only people born in a particular region (thus leaving out migrants), found that during the 1990s average incomes in the Mexican states most affected by globalization increased 10 percent more than those least affected.

Error

Per capita GDP growth in the post-1980 globalizers accelerated from 1.4 percent a year in the 1960s and 2.9 percent a year in the 1970s to 3.5 percent in the 1980s and 5.0 percent in the 1990s (Chart 1). This acceleration in growth is even more remarkable given that the rich countries saw steady declines in growth from a high of 4.7 percent in the 1960s to 2.2 percent in the 1990s. Also, the nonglobalizing developing countries did much worse than the globalizers, with the former's annual growth rates falling from highs of 3.3 percent during the 1970s to only 1.4 percent during the 1990s. This rapid growth among the globalizers is not simply due to the strong performances of China and India in the 1980s and 1990s—18 out of the 24 globalizers experienced increases in growth, many of them quite substantial.

Finance & Development, September 2001 - Trade, Growth, and Poverty

News & Broadcast - Poverty Drops Below 1 Billion, says World Bank

Freer countries are richer

http://freetheworld.org/2006/EFW2006complete.pdf

So, even though there is no such thing as perfect competition, generally, freer economies create more wealth and provide a higher standard of living for their citizens.