How Does the Invisible Hand Work?

[Deuce]

Deuce, do a quick search on this blog entry....Unglamorous but Important Things...for your username. Can you tell me how many times you are mentioned on that page?

So, is this a list of "unresolved flaws in my proposal?"

Because that's what it looks like. Your blanket response is "the invisible hand," but that's no different than what any other libertarian says. Seriously, your only rebuttal is to defer to this magical invisible hand. There are tasks that the free market is objectively terrible at handling, usually due to the lack of proper guidance for that invisible hand. It doesn't guide itself, the invisible hand is not an all-knowing deity. It is an aggregation of inherently flawed human interactions.

When free market principles screw up a television purchase, somebody gets a crappy television. When free market principles screw up the Marine Corps, improperly armed marines die.

 

[Xerographica]

Deuce...sure, it's a list of evidence that proves I'm off my rocker.

What do you think it means when you and so many other people are concerned with whether national defense would receive sufficient funding? What do you think it means when both you and Bill Harshaw are concerned that people wouldn't allocate enough taxes to "unsexy" things like vaccines? What do you think it means when both you and Linda Beale are concerned with food safety? What do you think it means when both you and Damarcus are concerned with enough funding for NASA? What do you think it means when both you and nonpareil are worried about satellites?

Just how big do you think my sample size is for that list?

Do you really not see the pattern? Do you really not see how people's concerns would lead to a a taxpayer division of labor? We see the same exact thing in the non-profit sector...yet you struggle with seeing how the same thing would occur in the public sector.

There's no doubt on my mind that the families of Marines would lobby the American public to ensure that nobody forgot about funding the Marines. Even though my mother was against the war...it doesn't make any sense that she and the rest of my family wouldn't have done everything in their power to ensure that my unit was adequately funded while we were stationed in Afghanistan.

If people could directly allocate their taxes do you think the families of soldiers would really try and get tax refunds?

 

[poweRob]

Every time I see this thread this is what I think of:

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[Deuce]

Deuce...sure, it's a list of evidence that proves I'm off my rocker.

What do you think it means when you and so many other people are concerned with whether national defense would receive sufficient funding? What do you think it means when both you and Bill Harshaw are concerned that people wouldn't allocate enough taxes to "unsexy" things like vaccines? What do you think it means when both you and Linda Beale are concerned with food safety? What do you think it means when both you and Damarcus are concerned with enough funding for NASA? What do you think it means when both you and nonpareil are worried about satellites?

Just how big do you think my sample size is for that list?

How many of those people mentioned Medicaid? Farming subsidies? The national weather service? National parks?

Do you really not see the pattern? Do you really not see how people's concerns would lead to a a taxpayer division of labor? We see the same exact thing in the non-profit sector...yet you struggle with seeing how the same thing would occur in the public sector.

Do YOU not see the pattern? How many government agencies have we added in the last century or so? How many new tasks has the government begun to perform? Now ask yourself why did the government take over that task? How about the FDA? Why does it exist? If food and drug safety is so important to Americans, why did the free market not accomplish this task properly? Why do you even need this intermediary of taxation if the "invisible hand" is sufficient to guide the money to the "right" place? Why did Sulfanilamide Disaster this happen? Why did "division of labor" not cover something as simple as preventing the sale of lethal products?

How about Medicare and Social Security. Poverty levels of seniors dropped dramatically after these programs came into existence. Why hadn't that problem been addressed? Come come charitable donations weren't enough? You seem to think enough Americans would place enough value on this service to allocate enough resources to Social Security, but history clearly shows that not to be true.

There's no doubt on my mind that the families of Marines would lobby the American public to ensure that nobody forgot about funding the Marines. Even though my mother was against the war...it doesn't make any sense that she and the rest of my family wouldn't have done everything in their power to ensure that my unit was adequately funded while we were stationed in Afghanistan.

Your family cannot supply an entire military unit. Or maybe they can, except now nobody is paying for the roads.

If people could directly allocate their taxes do you think the families of soldiers would really try and get tax refunds?

Yes, absolutely they would.

 

[TNAR]

Free market principles require several things to be present. A sufficiently-informed consumer, choice, and competition ...

Free markets don't require "sufficiently-informed" consumers. People can be ignorant of products and still engage in a free market. Otherwise I agree with your assessment.

...Probably not. I'd probably reduce your pay to $90 or $85/hour.

I get what you're saying but you're still ignoring the problem of coming up with prices. There is no method for economic calculation in these scenarios.

There are tasks that the free market is objectively terrible at handling, usually due to the lack of proper guidance for that invisible hand. ... It is an aggregation of inherently flawed human interactions.

There is no guidance for the invisible hand; in fact, any attempt at guiding it will wind up skewing it as we see in our messed up economies around the world today. Furthermore, if it is simply an aggregation of "inherently flawed human interactions" then there is no solution to the problem. Any proposed solution, be it socialism or dictatorship or otherwise, necessarily involves human decision-making. If it is "flawed" as you claim, then mankind is doomed to failure regardless of what path we take.

If people could directly allocate their taxes do you think the families of soldiers would really try and get tax refunds?

Yes.

If [enter your favorite gov't program here] is so important to Americans, why did the free market not accomplish this task properly?

Because they could not due to harsh regulations. My business is unable to offer services in America because it is against the law for me to compete on a level playing field with the government provided services. None of your claims are examples of free market failures, they are examples of unintended consequences of government intervention.

 

[Deuce]

Free markets don't require "sufficiently-informed" consumers. People can be ignorant of products and still engage in a free market. Otherwise I agree with your assessment.

I should clarify: Market forces require sufficiently-informed customers if they are to function properly. Otherwise, they perform poorly.

There is no guidance for the invisible hand; in fact, any attempt at guiding it will wind up skewing it as we see in our messed up economies around the world today. Furthermore, if it is simply an aggregation of "inherently flawed human interactions" then there is no solution to the problem. Any proposed solution, be it socialism or dictatorship or otherwise, necessarily involves human decision-making. If it is "flawed" as you claim, then mankind is doomed to failure regardless of what path we take.

All decisions are flawed, that doesn't make them equal. There are situations in which a free-market approach is objectively worse.

Because they could not due to harsh regulations. My business is unable to offer services in America because it is against the law for me to compete on a level playing field with the government provided services. None of your claims are examples of free market failures, they are examples of unintended consequences of government intervention.

Which government regulation was preventing someone from "competing on a level playing field" with a government service that didn't exist yet? Jesus it's like the answer a libertarian chat bot would have given. IT WAS THE REGULATION? Really? There were laws against providing retirement income to the elderly? Laws against product safety testing services?

 

[TNAR]

I should clarify: Market forces require sufficiently-informed customers if they are to function properly. Otherwise, they perform poorly.

I still disagree. What is a "properly" functioning market? According to whose ideals must it function in order to function in a "proper" method?

Markets are amoral constructs. They either provide goods in a "free" manner or they provide goods in a regulated manner. In either case, the amount of information available to consumers is irrelevant because information itself is a commodity. If a lack of information exists within a free market then the opportunity is ripe for the picking for some entrepreneur to supply this good to consumers. Only in cases of highly regulated markets does a high level of information make a large difference in outcomes.

There are situations in which a free-market approach is objectively worse.

Such as?

Which government regulation was preventing someone from "competing on a level playing field" with a government service that didn't exist yet?

Choose any of the services which have been provided since the government was formed and you will have your answer.

 

[Xerographica]

Deuce, if you want to know how many other people mentioned those things just search on the page...Unglamorous but Important Things. I really love how exceptional you think you are.

All the arguments you made regarding the "failure" of the private sector to do this and that have nothing to do with the invisible hand and everything to do with the possibility of a free-rider problem. If you don't think I acknowledge the possibility of a free-rider problem then you're entirely mistaken...Libertarianism and the Free-rider Problem. If you think I care one iota whether the private or private sector supplies something then you're entirely mistaken as well...as I made perfectly clear with my comment on government cheese.

Why would you expect my family alone to supply an entire military unit? What about the family's of the other soldiers? Are you trying to say that they don't care about their brothers, sisters, daughters, sons, mothers and fathers that are serving in the military? What country do you live in? Absurdistan? That was less an insult and more of a shout out to a movie that I like.

Why would family members try and get a tax refund if doing so would jeopardize their family member's safety? If somebody cares enough about an issue to directly allocate their taxes...rather than just give their taxes to congress...then there's no reason to believe that they would want a portion of their taxes back.

The reason I can tell that you don't understand how the invisible hand works is that you except taxpayers to have perfect knowledge. From Hayek's essay on The Use of Knowledge in Society...

"The problem is thus in no way solved if we can show that all the facts, if they were known to a single mind (as we hypothetically assume them to be given to the observing economist), would uniquely determine the solution; instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge. To assume all the knowledge to be given to a single mind in the same manner in which we assume it to be given to us as the explaining economists is to assume the problem away and to disregard everything that is important and significant in the real world."