More ‘Free Market’ Double Standards

Maybe this will become a series, as these are quite easy to rattle off, and pretty fun too…

1. The rule of contract is sacred, but it’s fine to force pension cuts and pay freezes on public sector workers.

2. Localism is great! But every single nation on earth should have the same libertarian policies.

3. Deadweight loss is bad. I’ve forgotten that the money not spent due to the tax will be spent elsewhere, despite using similar arguments at every possible opportunity.

4. Emergent properties are logically impossible (see comments) so we should be 100% reductionist. But human action is a meaningful emergent property, meaningful enough to build an entire methodology around.

5. GDP is meaningless. But we can still analyse past recessions that fit our theories.

6. Government intervention in the banking/monetary system is bad for the economy and morally wrong. But the government should force everyone to use gold as their currency.

7. Corporations should maximise profit and take care of their shareholders. But if CEOs are ripping shareholders off, it’s fine, because of the free market.

8. Government intervention is bad, but corporations should be legally required to maximise profit.

9. Liberty! No, wait, dictatorship.

10. Reality trumps theory. But I love the EMH so much…and RET…and monetarism.

11. When economies succeed, it’s a triumph of the free market over whatever state apparatus exists at the time. But when it fails, that state apparatus (which previously had negligible impact), is to blame.

12. Government guarantees encouraged banks to take too much risk, let’s repeal them. But let’s not repeal limited liability laws on similar grounds.

13. Government intervention is bad, but they need to stabilise the money supply to keep inflation low.

14. Inflation is always and everywhere a monetary phenomenon. Hey, check out my new NAIRU theory!

15. The price system is perfect, but banks shouldn’t have to use mark-to-market accounting to report their financial status.

16. Stimulus doesn’t work, except when the money is spent on the military.

17. If public sector workers are fired, they will be rehired in the private sector, having little net effect on the economy. But if City workers are fired they won’t be rehired and it will be bad for the economy.

18. This despite the fact that public sector workers are lazy, unskilled parasites and City workers are intelligent and productive individuals.

19. Rationality can simultaneously mean a self-maximising agent, and whatever the hell I want it to mean.

20. Capitalism is dynamic and robust. But if you introduce a single regulation or tax it will implode!

21. Capitalist dynamics and relations will always cause certain groups to gain politically at the expense of everybody else. This is an argument in favour of capitalism.

22. Property is great and taking it by force is bad. But we shouldn’t give it back to the indigenous people from whom it was initially stolen.

23. Collectivist institutions are bad. But implementing ‘free market’ policies is an end in itself – it doesn’t matter how many people suffer.

About these ads

,

  1. #1 by michaelsuede on December 14, 2011 - 5:02 pm

    4. Emergent properties are logically impossible (see comments) so we should be 100% reductionist. But human action is a meaningful emergent property, meaningful enough to build an entire methodology around.

    Actually the article says emergent properties are logically impossible; therefore, we should not believe in reductionist theories. Human action is not an emergent property so your point makes no sense in either context.

    • #2 by Unlearningecon on December 14, 2011 - 5:05 pm

      Surely if emergent properties are logically impossible reductionist theories are the only ones we can believe in?

      And human action as a concept is an emergent property of biological/chemical processes, which are themselves the emergent properties of physical processes, ad nauseum…

  2. #3 by Ryan Langrill on January 1, 2012 - 9:04 pm

    Deadweight loss is the difference in value between what someone would have bought in a counterfactual world, so the ‘people spend it elsewhere’ comment is already built in. Minor quibble, though.

    • #4 by Unlearningecon on January 1, 2012 - 9:18 pm

      No my point is that those who are dissuaded from buying by the higher price still keep their money and spend it elsewhere, so the macroeconomic impact is negligible (although the micro impact remains).

      e: I’m not sure I see your point actually. DWL is the measure of what isn’t bought in a certain market but it is always neglected that whoever would have bought that still has that money to spend elsewhere.

      • #5 by Ryan Langrill on January 2, 2012 - 3:04 am

        If there’s no tax, I might buy an $18 dollar sweater that I value at $20. Put a tax that increases the price to $21, then I lose my $20 value I would get from the sweater, but keep my $18, so the Deadweight loss is $2, since I keep my money but get things I only value at $18 instead. At least that’s how I understood the concept of deadweight loss, not a measure of what isn’t bought in a certain market, but a measure of the difference in consumer or producer ‘welfare’ between participating in one market over their next best alternative. I rarely hear about people talking about deadweight loss in macro, so I may be missing your context?

      • #6 by Unlearningecon on January 2, 2012 - 3:51 pm

        Right but who’s to say you won’t end up buying something you valued at over $18 anyway? Obviously ‘it depends’ is the only answer we have, but it’s not as clear cut as the models suggest.

        My point is that free market advocates refer to taxes as ‘distortionary’ and believe that they create a lot of drag on the economy. Evidence from Scandinavian countries suggests this is not so – I believe this is because the money is always spent somewhere.

  3. #7 by atm0spheric on January 16, 2012 - 7:56 pm

    Since we are having fun here:

    17. If public sector workers are fired, they will be rehired in the private sector, having little net effect on the economy. But if City workers are fired they won’t be rehired and it will be bad for the economy.

    Or :

    17. If public sector workers are fired, they will be rehired in the private sector, having little net effect on the economy. But if selfish City workers are fired they won’t be rehired and that will be good for the economy.

  1. Libertarianism Versus Public Choice Theory « Unlearning Economics
Follow

Get every new post delivered to your Inbox.

Join 1,028 other followers