BillK> On 10/6/07, a wrote:
>> I am skeptical that economies follow the self-organized criticality
>> behavior.  There aren't any examples. Some would cite the Great
>> Depression, but it was caused by the malinvestment created by
>> Central Banks. e.g. The Federal Reserve System. See the Austrian
>> Business Cycle Theory for details.  In conclusion, economics is a
>> bad analogy with complex systems.
>> 

BillK> My objection to economic libertarianism is that it's not a free
BillK> market. A 'free' market is an impossibility. There will always
BillK> be somebody who is bigger than me or cleverer than me or better
BillK> educated than me, etc. A regulatory environment attempts to
BillK> reduce the victimisation of the weaker members of the
BillK> population and introduces another set of biases to the economy.

This is the same misunderstanding that justifies protectionism among
nations. When nation A (say the US) trades with nation B (say Haiti),
nation A may be able to make every single thing much better and
cheaper than nation B, but it still pays both nation B and nation A to
trade freely, because nation B has a comparative advantage in
something: a comparative advantage being whatever they make
least badly, they can swap with nation A and both nations benefit.

Likewise, Michael Jordan may be much better able to mow his lawn than
whoever he pays to do it, but it still benefits both of them when he
pays the lawn guy and concentrates on basketball.

You benefit greatly by trading with people who are cleverer, better
educated, richer, stronger than you.
The more clever they are then you, the more they have to offer you,
and the more they will pay you for what you have to offer them.

Regulations that restrict your ability to enter into trades with
these people hurt you. They do introduce biases into the economy,
biases that make everybody worse off, particularly the weaker members
of society, except for some special interests that lobby for the
regulations and extract rent from society.

BillK> A free market is just a nice intellectual theory that is of no
BillK> use in the real world.  (Unless you are in the Mafia, of
BillK> course).

BillK> BillK

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