Economies - Free Market vs. Controlled Markets

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Economies - Free Market vs. Controlled Markets

Post by bwohlgemuth »

The warming thread started moving into this world, so I decided to start a new thread about it...

Bjart, I am slowly moving into the academia world (or being dragged into it). Here's what I have seen so far.

Small groups of people who want to change academia to better support students.
Administrators afraid of change, because change may distort their "vision" of the university.
Small groups going it alone, starting covert programs and failing due to the sheer power of the administration.


If you have never experienced this in academia, then you have been in a very unusual and wonderful university or you are just clueless to what happens. I doubt both in either case....so what's the third option?
I'm not even going to respond to the rest as it's all wishful thinking without the right data to back it up.
OK, here are two books to start with.

Irwin "Free Trade Under Fire"
Friedman "The World Is Flat"

Both use ample empirical data and observation to show how free market economies consistently are more productive, are fairer, and tend to weed out corruption and inefficient programs quickly.

We can get into how "communism looks great on paper", but you can ever get past the point of corruption in a system. How many times in your role have you done a favor for someone or yourself (call a friend for help, use your role to get something in a different method than what is normal for everyone else). This is how corruption begins, as people start working outside of the system, creating backdoors to processes (and then the temptation for money becomes too great). Once people can find ways around the system, they start using them until they are shut down.

In free market economies, those processes are called innovative competitors. If you can find a company which can deliver a good or services in a cheaper/faster/better way, people will come to you for it and leave existing processes behind.

The end of "use it or lose it" budgets will only come when services are put into a competitive marketplace. This can be accomplished in all three fields which I listed earlier.

Schools. Public Schools have three years to pull it together. Within three years, all public funding ends and school vouchers are created. Vouchers are created at a specific funding level. Voucher values will start at a level equivalent to the per student charge at the beginning of the program. Schools set tuition rates, and parents can decide if they want to go to a cheaper school (which results in a refund to the parents) or a more expensive school (which may cost the parents more). This will create competition within the school system.

There's more, but it's a nice Saturday afternoon and I'm a bit wiped from end of term.
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Re: Economies - Free Market vs. Controlled Markets

Post by =^-..-^= »

bwohlgemuth wrote: Schools. Public Schools have three years to pull it together. Within three years, all public funding ends and school vouchers are created. Vouchers are created at a specific funding level. Voucher values will start at a level equivalent to the per student charge at the beginning of the program. Schools set tuition rates, and parents can decide if they want to go to a cheaper school (which results in a refund to the parents) or a more expensive school (which may cost the parents more). This will create competition within the school system.
You're saying that public skools should adapt to societal changes/trends, compete with each other and develop more specialized programs geared to the interests/hours/needs of their customers like *cough *hack* those in ACADEMIA?

Weeelllll, that's just crazy talk. . . .

Quote from other thread:

" I just happen to believe that we can design a better society if we stop building pyramids for the top 1% and actually try to help ourselves for a change."

EXACTLY! DING DING DING!!!! Someone in the past worked awfully dang hard to get to that top 1%. Now inheritance, influence, and government corruption keeps many of them entrenched there; but some of them get and stay there through hard work and using their creative minds to fill a need. You and I can do it too, and taking it away from them takes the opportunity away from us.

"and actually try to help ourselves"

Yep, and don't wait for government corruption, coercion, and seizure to try to make all things 'fair' for us and make sure the 'trees are all kept equal.'
"Yesterday Mr. Hall wrote that the printer's proof-reader was improving my punctuation for me, & I telegraphed orders to have him shot without giving him time to pray." -Mark Twain

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Post by bwohlgemuth »

Where's that damn hatchet, axe,and sword?
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Post by Bjart Sod »

I never said academia was perfect. I just said I preferred because it had mechanisms in place to continuously review itself and give everyone some voice. Due to the nature of the game, students will not always get what they want when they want it, but in a well-funded university, they will get what they need pretty quickly.

I will check out the books you named eventually, but you seem to be arguing against a strawman. I'm not a Marxist nor am I any sort of big-government-loving socialist. If there's any political organization out there doing something I could stand behind, it's the communities the indigenous Mayans are building in Chiapas.

I like freedom. I like competition. But I don't like free-market capitalism for ethical reasons. Power in such markets is attained through acquiring capital, which is not spread equally across the population. I'd rather participate in an economic system where power is shared equally.
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Post by bwohlgemuth »

Bjart Sod wrote:Due to the nature of the game, students will not always get what they want when they want it, but in a well-funded university, they will get what they need pretty quickly.
And who decides “what's bestâ€
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Post by Bjart Sod »

I'm not sure what you were getting at with your first question. "What's best" in an academic setting is determined the same way it is in the office of a business. Whether your deciding which fax machine to buy or whether to switch to a physics-first science curriculum, the process is the same.

I don't know how well it scales. That's why people are experimenting all over the globe with participatory economics and other models. For the last few years, Chiapas has just stood out to me like our best example of people creating and maintaining an ethical economic system, despite all the problems they face from the Mexican government, NAFTA, and illegal immigrants from Central America.

Your question also assumes that we can continue living on this planet with no degradation to our lifestyles while sustaining our current population. I don't know if the evidence is even in yet on whether that's even a feasible possibility. Even with free market economies, it's a big assumption.

I will add that the likely way things would scale to city sized populations is through neighborhoods. There are already neighborhood programs in quite a few major cities to help the recently houseless, to stop or monitor crime, etc. I personally have a few friends who are participating in a fledgling program in a Brooklyn. I have a feeling these things will continue to be determined organically.
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Post by bwohlgemuth »

I'm not sure what you were getting at with your first question. "What's best" in an academic setting is determined the same way it is in the office of a business. Whether your deciding which fax machine to buy or whether to switch to a physics-first science curriculum, the process is the same.
Actually, from what I have seen, academia and free enterprise have little in common. Let's take the idea of starting a new course. Your observation shows this course could be in high demand, and would attract new students.

In academia, you approach the university about starting this course. The board reviews it, and for some reason (mission, cost, validity, politics), the request is denied. In that world, that is the end of the request.

In free enterprise, you approach your boss about the same course. You boss and the senior management reviews it, and for some reason (mission, cost, validity, politics), the request is denied. Instead of that being "it", you could start your own business and teach this course on your own. You may fail, you might succeed. It just depends on how you set the course.

The problem with any sort of planning (such as events, economies, whatever) is that you cannot predetermine all of the effects, changes, and consequences of those actions. Some great business plans lose horribly because of market conditions. Some really horrible plans go spectacularly well because of market conditions.

There is no feasible way to plan for every market demand in an world economy with trillions of transactions and decisions taking place every day. And every state that has tried, has failed economically. Don't believe me? Check out the "Failed States" article from Foreign Policy magazine.

We are fortunate to live in a time of relative plenty. We can easily feed, clothe, and shelter the world, but the damn politics get in the way. Yes, there are always going to be the undeserving rich and poor, but I have yet to see a valid, scalable system which can address everyones need of free choice.
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Post by Bjart Sod »

Right. Feel free to continue arguing against planned economies, since you can do that without me. Maybe somebody who supports them will join in with a rebuttal.
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Post by =^-..-^= »

Bjart Sod wrote:I will add that the likely way things would scale to city sized populations is through neighborhoods. There are already neighborhood programs in quite a few major cities to help the recently houseless, to stop or monitor crime, etc. I personally have a few friends who are participating in a fledgling program in a Brooklyn. I have a feeling these things will continue to be determined organically.
In other words, people are empowering themselves free from government intrusion/coercion. No problem with that!

A Libertarian society would have to rely on the concept of Community to function and survive. Community springs voluntarily from within. Planned economies are enforced by coercion from without.
"Yesterday Mr. Hall wrote that the printer's proof-reader was improving my punctuation for me, & I telegraphed orders to have him shot without giving him time to pray." -Mark Twain

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Ayn Rand

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Post by bwohlgemuth »

I did let my reply hang in the wind on this one....so I will get started again...

I am not disputing the power of "communities". However, communities are organic beings, growing out of need, and then morphing into agencies of influence and control. These "communities" can provide limited needs, but they only have the labor base to provide basic substance. They do not have the breadth to allow for specialization of tasks. Take 1,000 people, dump them in a forest somewhere, cut off from the world, and they will most likely revert to a lifestyle similar to late 1700's life.

For that example, let's look at China. Forty years ago, China suffered behind a policy of isolationism. They opened themselves up to trade, and are now of the world's largest exporters. This has been the same story in almost every country which has followed a similar path. Why? Because this opens the ability for countries to outsource less efficient means of production to other countries and then specialize in industries where they can maintain an advantage.

The only way to allow for specialization beyond "survival tasks" is to allow for trade. Trade can be accomplished through barter, exchange of money, and so on. Since it would be almost impossible to have each community create a "trade agreement" with each other community, the most logical form of bartering is to find a mutually agreeable valuable item, and then use it as a vehicle for trade.

While the Chiapas in Mexico may have found this new "ethical" system, I would be hard pressed to believe it will scale to support the existing systems in place.
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Post by Bjart Sod »

In as non-condescending tone as I could say this, your knowledge of Chinese history, industrialization, and the global market seems to be a little short. The recent global adoption of the sort of economies that developed in Western Europe in the last few centuries hasn't proceeded out of any sort of inherent inevitability. In a number of cases (if not all), it's proceeded like lots of top-down cultural changes have: under threat of state violence. I hate to sound like everyone's favorite circus money, but when you're talking about human culture, it's all about the anthropology.

You can talk about what you think would happen, but others are out there researching what has happened in the past and experimenting to find out what could happen in the future. The current system of human organization if complex divisions of labor and hierarchical social structures are only a recent development in our history. Quite a few of our current global problems are direct effects of the decisions made in the Fertile Crescent long ago. When you talk about "free markets" and "planned economies" you're talking about two sub-theories of the same model.

My opinion is only that I think we can eventually find an economic system that works, is adaptable, is democratic, provides for the needs of its participants, and doesn't waste scarce resources, ecological stability, or human health on creating trivial knick-knacks. I don't think I have all the answers, I'm just pointing out that the current system isn't working and that we need to question some of the assumptions underlying our culture.
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Post by bwohlgemuth »

Bjart Sod wrote:In as non-condescending tone as I could say this, your knowledge of Chinese history, industrialization, and the global market seems to be a little short.
Well, it probably is as compared to experts and natives, I just base my views on what I read and see.

China had a wondrous trade system, up until the mid 15th or 16th century. , when it decided to isolate itself fromt he rest of the world. Tons of emporers and bad policies later, we get to the Revolution in 1927...and it spirals from that point.
Bjart Sod wrote:The recent global adoption of the sort of economies that developed in Western Europe in the last few centuries hasn't proceeded out of any sort of inherent inevitability. In a number of cases (if not all), it's proceeded like lots of top-down cultural changes have: under threat of state violence.
Actually, it has. These systems were more efficient in creating goods than traditional systems. They were implemented under the gun, but they stuck because they were superior in volume and quality as compared to other systems. Just ask the Communists....
Bjart Sod wrote:I hate to sound like everyone's favorite circus money, but when you're talking about human culture, it's all about the anthropology.
Damn, you ruined my "channeling JoJo" retort.... :lol:
Bjart Sod wrote:You can talk about what you think would happen, but others are out there researching what has happened in the past and experimenting to find out what could happen in the future. The current system of human organization if complex divisions of labor and hierarchical social structures are only a recent development in our history.
Because humanity during those times lacked the scale and tools to communicate in between communities/city-states/empires/whatever.
Bjart Sod wrote:Quite a few of our current global problems are direct effects of the decisions made in the Fertile Crescent long ago. When you talk about "free markets" and "planned economies" you're talking about two sub-theories of the same model.
Actually, there is a difference.

The planned economies I speak of are micromanaged ones, where the government determines supply, and then assigns assets, and sets prices. While there is planning in the free market, these economies allow the market to determine supply, and then set prices.
Bjart Sod wrote:My opinion is only that I think we can eventually find an economic system that works, is adaptable, is democratic, provides for the needs of its participants, and doesn't waste scarce resources, ecological stability, or human health on creating trivial knick-knacks. I don't think I have all the answers, I'm just pointing out that the current system isn't working and that we need to question some of the assumptions underlying our culture.

So which one of those eight items are the most important (and saying all of them is just silly). Macro systems exist around a few sets of ideals, not several. Those sub-systems develop out of consumer demand.

Of course, I have to ask who is going to determine whether something fits all of those traits....
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