Getting what you voted for, good and hard | Samizdata.net

Getting what you voted for, good and hard | Samizdata.net

This is an interesting piece from Perry de Havilland, one of the UKs leading libertarians, seriously it's interesting, read it. 

Of course, the reasons I find it interesting, and many readers will is somewhat different to the reasons Perry thinks it is interesting.

He makes an interesting thesis, that markets work because the actors in the market are flawed and acting only from Self Interest.  His point, and I've heard this argued somewhat by David Friedman, is that the real problem is that politicians are flawed and therefore Statist solutions don't work either.  Only the market will magically punish the irrational.

One of the vast problems I have with this line of logic is that the only rational course of action is to punish the stupid or gullible, no matter what the cost to society is.  I may, perhaps, be too empathic for my own good.

Blogged with the Flock Browser

Comments

[mohan kumar]

Market will punish the irrational is the correct term. That is what is being done in America and Bharat(India) my country.

[Perry de Havilland]

That is not quite how I see it. Markets are never 'perfect' because information is rarely perfect (and it is perishable even when it is), and people are not perfect, and never will be, not even when we are transhuman neural pathways in a nano-tech saturated meatsack :-D ... and what is a market if not a series of interactions between imperfect people operating on the basis of their understanding of the information available to them at the time?

I for one do not think everything will become utopian if only markets were permitted to actually work properly, just... better. I just think that the inevitable combination of hubris and self-interest that comes with political power makes force directed solutions more consistently worse and harder to undo when they prove to be mistaken than market solutions. Intervening to do what's best for 'society' almost inevitably means doing what's best for the people most able to manipulate the polity, which ain't quite the same thing.

And then there is the issue that moral choice that can only exist when the polity is not telling people how to interact at gunpoint, but I know better than to have that discussion with most people :-)

[DaveOn]

Firstly, welcome to the Razor Perry and thanks for the comment.

My quandary with your position is that while you are essentially 100% correct in your position, it doesn't actually leave us any better off in the long run.

One of the nasty problems with the current economic position isn't that the market is biting people in the arse on the way down; but that the people who substantively created a lot of the problems (and in this I'm thinking back to Miliken and his ilk who created a lot of the Bond mess) actually haven't been punished at all. They're certainly in the wonderful position that Warren Buffett is in when he says the good thing about the market being imperfect is that it means he can make himself rich.

The people really caught out by this are people who bought homes, who had retirement savings and didn't actively load themselves in debt.

Pragmatically, the nasty side of me says well screw the imprudent and the people who were caught out, but that route lies the end for the fragile little bubble of civilisation we live in, so we're stuck having, as always to find a middle ground.

Now that middle ground can and will be manipulated, as it has been since the first tribes of humans started living together to take advantage of agriculture to make beer (and tea, but I prefer to think of the beer myself).

While our current system is far from perfect, I can't see a credible alternative.

The one glimour of hope, at least for the US in this mess is that unlike Japan in the 90s, the US actually does need the infrastructure spending before more bridges fall down and highways collapse.