= 27d567bc2d48d9f40e9ccc20ea370b15)
billswift comments on (One reason) why capitalism is much maligned - Less Wrong
You are viewing a comment permalink. View the original post to see all comments and the full post content.
= 783df68a0f980790206b9ea87794c5b6)
Loading…= b715d02e85f7b3b4ae65ca3d3e450868)
Subscribe to RSS Feed
Powered by Reddit
= f037147d6e6c911a85753b9abdedda8d)
You are viewing a comment permalink. View the original post to see all comments and the full post content.
Comments (94)
It is not possible to do better than free markets, not because of human "nature", but because of human limitations. It may someday be possible for post-humans (for example the Vile Offspring in Strauss's Accelerando) to develop superior algorithms for economic exchanges and planning; but for humans there is no possible "solution" to the coordination problem as good as prices set by a free market (a set of open exchanges). As an aside about regulation - the less regulation, the more accurate the information encoded in prices will be; but there are other aspects of society to take into account than accurate prices - like everything in real world societies it is a trade off between multiple, sometimes conflicting values.
ADDED: I strongly recommend that anyone interested in the value of markets to read Thomas Sowell's "Knowledge and Decisions".
Not necessarily. Free markets with no regulation do a really bad job at encoding information about externalities such as pollutants.
Unless rights with respect to those externalities are as well defined (and reasonable) as the other property rights that are enforced.
Of course, the typical libertarian, in my experience, incorrectly classifies such tradeable pollution rights (i.e. where the total permitted right to pollute is kept low and can be traded between polluters) as evil evil evil terrorist regulation.
Actually, that disagreement pretty much describes 18 months of my interaction with Bob Murphy, starting a month before this.
And there's also adverse selection / information asymmetry effects, as in "The Market for Lemons". (There's a big difference between the market price of a new car and a used car that was purchased new from a dealer one day ago.)
It's not possible to use detailed centralized control to do better than free markets, but this doesn't prove that a strong safety net is worse than a free market.
I agree with NancyLebovitz's comment. Agree with you that computation issues associated with the coordination problem play a big role in why free markets are valuable (and added the world "limitations" to my post to accommodate your suggestion).