Thursday, April 2, 2009

Why the Free Market Works

I was enjoying a little intellectual sparring (or sadistic mockery) over at Economic Swim on an unrelated topic when Tao (the world's most confused conservative if he is calling himself one still) was kind enough to give me inspiration for this post. Here's the comment that got me going:

Care to debate the concept of greed? Care to tell me that pedal to the metal greed is a good thing?

Yes. And yes (more or less).

Except there's one thing I need to clarify. Greed is a weak-assed word. So let's break out the definition (from to understand why:

excessive or rapacious desire, esp. for wealth or possessions.

So why do I call this a weak-assed word? Because greed is in the eye of the judgmental. It can't be quantitatively measured. Here's an example:

I have two people. both are in the same general business. One makes $260 million a year, the other $37.5 million a year (not counting everything, this is on their main sources of income).

So is one or both greedy? After all, they're making more than all the AIG bonus recipients combined.

Both started out with little money. One started out with very little and unmarried parents, worked hard, and achieved great success early, becoming the most powerful person in the profession. The other was born to a good family, stumbled along the way, and became the most powerful person in the profession.

One has worked to bring education to places where it is lacking, the other helps the children of Marines and police killed in the line of duty afford education.

Now would you say that either person is greedy?

I'll assume, despite their divergent political views that only those obsessed with denying anyone wealth would consider the salaries of either Oprah Winfrey or Rush Limbaugh as marks of greed. So dollar amounts don't cut it.

Would you consider Bernie Maddoff (asshat) greedy? He donated millions to charity with the money he stole in his Ponzi scheme. Criminal, yes. Greedy, no. Now you might be able to make a case for the gang at Enron, but they were also criminals. So if you're referring to those who break the law to gain financially, I could live with that.

But those who do their jobs, secure agreements for pay, then are demonized for taking their pay because their company crashed and burned and grabbed some government tit? Not at all.

The reason these people seek the big money, the big fame, and the like, is because they've worked their ass off to earn it. Some may have started at an advantage, but as you've seen from my example above, you don't have to have much in the way of advantage to succeed to make the big money. And I have yet to see any system that works as well without sacrificing freedom to the will of another.

Which finally (yeah, finally) brings me to the reason why the free market works: The rational self-interest of the individual. It can be expected that most people will act to improve their lives in some way, whether it be monetary, spiritual, situational, or emotional. And in the free market, you are paid to pursue your passion if it allows someone else to pursue theirs. And when the potential of the individual is allowed to do what it does naturally, without punishing or regulating success in utilizing that potential, then we grow as a people.


TAO said...

Greed, " the desire for the pursuit of money, wealth, power, food, or other possessions, especially when this denies the same goods to others."

Greed is a form of idoltry. It, "...serves to bring to as minigs things that the greedy person considers valuables to that person, making him the center of his efforts, the one he aims to please, converting him into his own god, and creating pride with great concentration on the ego."

Madoff was greedy.

You dicuss a pursuit of 'your passion' and go on and on about should work at what they enjoy and if they do then money becomes secondary.

If THAT was what motivated everyone then greed would not be an issue. BUT that is not what motivates quite a few people nowadays.

Greed is consumerism, greed is belief in the theory of trickling down, greed is the idea that one can leverage to 2 times the GDP of the country. Greed is when politicians seek funds from special interests rather than focus on governing.

Greed is when you focus on what you pay in taxes without questioning spending.

Greed is alot more than your feeble attempt to define the word and then paint a sceranio that is irrelevant.

People who want to help kids, teach kids, or all that other crap that you use to paint a rosy picture in your example that is their motivation and money is secondary. Madoff was always about money period. He screwed as many charities as he sponsored.

AIG did not create a sure fire investment but rather exploited loopholes in current regulations.

You say you have no problem with people who break the law being punished and then you also want no regulations and total free markets.

So basically with no regulations and free markets there would be no laws.

Bill Gates did not start microsoft and Steve Jobs did not start Apple because of money...they did so because they had a passion and were then successful when they followed their passion.

AIG was a great insurance company but their financial products division was nothing but a producer of 'snake oil' and who's only motivation was money.

Big difference, give me capitalism that creates more Bill Gates, Steve Jobs, and Wareen Buffetts, and I can be a conservative. Try to defend a system that supports AIG, banks, and GM and I am not interested.

Satyavati devi dasi said...

Don't be deluded into thinking that simply because someone donates to charity that they're not greedy.

Have you ever heard the words 'tax deduction'?

There are ways for companies to donate to charities to actually increase their bottom line at the end of the year due to the deductions they get to take.

It's one of the seven deadly sins, isn't it?

Are you being paid to pursue YOUR passion, Patrick? Or are you just trying to make a buck?

TAO said...

Take a one dimensional definition of a broad concept, then make up a story that fits exactly the point you are trying to make and then pat yourself on the back for proving your own point...

Thats the same reason CB has two blogs: On Economic Swim he goes on and on about the evils of government and the Obama Regime while on the other he goes on and on about church, god, and charity....

Then he just sits there and only ventures out of his blog to those blogs that reinforce his opinion.

Better work on this post Patrick or you are going to end up like you did on your other one about Lights ended up painting yourself as a tree hugger.

Name: Soapboxgod said...

Greedy is not the individual who, through his own blood, sweat, and fortitude, aquires things (whatever their value).

For those, the "money" is merely a byproduct of their productivity.

"Greed is consumerism..."

Only when one refuses to accept that he/she cannot consume more than they produce. If I go out and (as a "consumer") purchase a 1080p Hi-Def television, a Blu Ray player, etc., I am not "greedy" so long as I can afford it. If I apply for a myriad of credit cards (or better yet steal some credit cards) only to then charge those items with little intention to ever make good on those purchases, that is by definition greed.

I think there are quite a few who have no concept of what defines greed and sacrifice. I think there are those as well who have no concept of what money actually is. They know very little of its value and as such they cannot and do not respect it. Those that do are many times unfairly castigated as being "greedy" when in fact they most definitely are not.

Dave Miller said...

The better question might be "What drives someone to want?" instead of desiring enough to meet their needs.

Name: Soapboxgod said...

Actually, not everyone "wants". Some people are all too content with that "status quo" sort of mediocrity that comes with simply "meeting your needs".

Personally, I'm always wanting more myself. However, for me it's as much about retaining as it is wanting. There's a time and place for having the things we want.

The mind is a mysterious and wonderful thing for those who wish to put theirs to use. That is the force behind one's aspiritions, desires, goals, etc.

TRUTH 101 said...

I read you like a book Patrick. You envy the fabulously successful and in your deluded way think by defending their practices, particularly the unconcionable greedy, you may be like them one day. It's much like the scab who kisses the bosses ass. His position will never be any better than whateve the boss decides it will be. But it makes him feel safe and wanted. Even if the guy he thinks wants him could not give a rats ass if he lives or dies.

See the light Patrick. Bernie Madoff doesn't care. I do.

Beth said...

Of course greed is subjective, why else did everyone but me think Patrick was greedy when he used one hour of extra electricity that he paid for himself? Because to them that was "excessive" and "greedy". But some of these same people don't find a 16 year old girl who gets knocked up and gets an federally funded abortion because she wants to be able to wear a bikini this summer "greedy" or "selfish".

Greed isn't just about money.

But I do agree with the sentiment that giving to charity from ill-gotten money does not mean that person is good, to take from someone else without giving them something in return is wrong, and giving part of it away does not absolve that wrong.

Satyavati devi dasi said...
This comment has been removed by the author.
dmarks said...

Tao: Greed is government elites who already make millionaire wages and have plenty of money already daring to plunder the public even more with unnecessary tax hikes.

Arthurstone said...

Beth raved:

"But some of these same people don't find a 16 year old girl who gets knocked up and gets an federally funded abortion because she wants to be able to wear a bikini this summer "greedy" or "selfish"."

I've yet to meet anyone like you fantasized about in your post. Nor have you I'd wager.

But it's fun to make stuff up isn't it?

Anonymous said...

Beth are you delusional? That's just plain stupid Another solution is to gather up all babies born to unwed underage girls.
If it was a republican earmark. It would fit their definition of science. ... what is bothering them, cause they make no sense and offer no solutions. ... They make up lies to persuade and entertain us, because they have no useful ideas. They dream up facts to fit their views. Beth thinks that any one who thinks pro choice is the devil. Did we help her get knocked up? She chose this life then so be it if she wants an abortion. It’s non of my business or Beth’s, or anyone’s.

Beth said...

Actually I have heard stories of teens who have abortions for such a reason, does that disturb anyone?

Shaw Kenawe said...

Blogger Beth said...

Actually I have heard stories of teens who have abortions for such a reason, does that disturb anyone?

Sorry, Beth, I don't believe a word of it.

Hearing stories of such things is hearsay or rumor. None of it admissible in a court of law or logic. If you're trying to make a point, why not deal in verifiable facts?

Arthurstone said...

Beth typed:

'Actually I have heard stories of teens who have abortions for such a reason, does that disturb anyone?'

You don't actually know of a single instance such as you described do you Beth?

What's disturbing is how you make stuff up and pretend it's true.

Beth said...

You prefer to think this stuff isn't true, and I truly wish it weren't. I am guessing that knowing this bothers you all a bit?

TRUTH 101 said...

So you can't justify unfettered greed so you try and change the subject to fantasy abortions. Right Beth?

Beth said...

I am not trying to justify greed and I am not lying, and no abortion is a "fanstasy" -- using that phrase is rather sick.

Arthurstone said...

The 'knocked-up' 16 year old eager to have an abortion so she can be bikini-ready for summer is nothing but a fantasy Beth.

Or, more accurately, a lie.

Lynne said...

How touching Beth, You always sound like someone who wants to change the rest of the world. It would be great if the pro-life movement focused on this sort of thing-- as you have been preaching since you have been in the internet! I have a sneaking suspicion that your real objective in this subject is to promote your self-serving pro-life movement. The pro-lifers like yourself always find a way to sneak in their cause either by these insane ideas or by harassing other women non believers. And I find that to be very cowardly. And of course, it's ALWAYS a good thing for "pro-life" politicians to suggest that abortion is a bad thing and do nothing about it. If it weren't, we'd see folks going after Bush for his wishy-washy stance on abortion. I for one believe that it’s a women choice to do what she wishes to with her own body. I'm not going to tell someone what to do or what not to do.. Here's an instance of a pro-choice blogger being angry about Obama's support of parental notification laws. So, you have two choices. You can try to reduce the abortion rate under the parameters we have, or you can try to ban it and risk a huge backlash. Your call, pro-lifers. In one sense, those that truly need welfare justify the implementation of the ..... Its pointless except in the case of greed. ...Perhaps Beth should launch another Tea Party?

Beth said...

Wow have I hit a nerve or what?

I guess the story I tell does not fit into all of your idea that every abortion is about a raped victim (which I know does happen, but to the pro-choice crowd, this is their favorite reason to keep abortion legal, as if the 1% of abortions because of rape or incest justifies the 99% of abortion for convenience, yes for convenience, folks, try to pretend people don't do it for selfish reasons, like wanting to wear a bikini - a sad but true reality - but just thinking is it untrue does not make it so.

And because I want to save the lives of unborn children makes me "self-serving" Lynn, that is a new one, how does that serve me to speak for those who cannot speak for themselves?

Why I bring up abortion when people speak of topics that involve those of us who are alive is because I see the legalization of it as a sign of our culture not wanting to take personal responsilbity for themselves, and why so many of you now think the government needs to do everything for you instead of you doing it for yourselves.

Arthurstone said...

Women have abortions for a variety of reasons. As is their right. But vanity?

One example will do Beth. If we live in the moral cesspool you seem to think exists it shouldn't be difficult to find a young woman to tell such a tale. MTV may even have a reality TV show on the topic. 'Girls Gone Wild-Summer Tune-Up'?

But of course the don't.

Beth said...

I never said we live in a moral cesspool, as a matter of fact, I think the conservative viewpoint is that people are inherently good, otherwise why would we conservatives believe in individualism?

My example is not the norm, but it does highlight facts that exist because abortion is legal.

Anonymous said...

Beth said...
“I never said we live in a moral cesspool, as a matter of fact, I think the conservative viewpoint is that people are inherently good, otherwise why would we conservatives believe in individualism?
My example is not the norm, but it does highlight facts that exist because abortion is legal”

It seems to me that the author of the blog and many of the commentators have overlooked one likely explanation. It may be that religious people, of many denominations, are less concerned with overpopulation and find greater comfort in producing more offspring, regardless of the long term consequences on the world and the environment. In other words, the focus is on people, not the world in which people live.
Secularists, atheists, non-theists, tend to not believe in something more than themselves, so they think ONLY of themselves. High rates of narcissism are rampant amongst non-believers so hence you have higher rates of abortions. Abortions are more prevalent since non-believers are pretty selfish and since they don't believe life beyond their material existence they want everything now. Sex without responsibility is probably the number one narcissistic value amongst non-believers. Why have children sucking away your money, when that money can be better spent on vacations, a second home, third car, mistress’s, etc. It's rather quite simple.
Unfortunately Beth YOUR examples are NEVER the norm, but rather way out there in space. Like most other wingnuts..
But now that you we are going to pay for world abortion, and you actually think equal pay for women for equal work (more frivolous lawsuits) will actually work, you can look forward to this bill being passed and economic disaster will be here real soon. This is guaranteed.
Beth, if I were you, I’d seriously try to get in touch with reality.
Beth, there is more to life than to focus only on abortion .........

BB-Idaho said...

Ayn Rand, was, of course, all in favor of greed....and abortion.

Arthurstone said...

Matt Rose-

Sorry Matt but we're a bit beyond sex solely for procreation. Didn't you get that memo? Some might consider the height of 'narcissism' the need to populate the world with the fruit of ones loins. That somehow anyone is qualified to reproduce and that that is somehow always a good thing.

Just thinking.

The Gray Headed Brother said...

The Obama Presidency has raised the hopes of so many of us that America will restore her title as the land of inspiration and hope to the billions around the world.
"Abortion opponents love little babies, as long as they're in somebody else's uterus."

Beth said...

I guess it makes some of you to feel better that my story is fiction, and I don't blame you. As a matter of fact, I am rather heartened by so much outrage over such an incident that actually happened.

TRUTH 101 said...

The simple truth is that the right wing wants abortion to remain legal to keep their grip on religious voters Beth. They love votes more than babies.

Anonymous said...

Beth, I don’t find a 16 year old girl who gets knocked up and gets an federally funded abortion because she wants to be able to wear a bikini this summer "greedy" or "selfish" at all.
As long as she doesn't attract pedophiles, she can do whatever she pleases to do. LOL...
Some women see their body as a temple. I see mine as a well run place of business.

BB-Idaho said...

Matt should consider that atheist/agnostic folks have the lowest divorce rate (21%)
while Evangelicals have the highest
(34%) before labeling anyone as narcissitic or selfish....

Beth said...

Here's the thing, folks, whenever you have freedoms, you open up the door to not only prosperity and greatness, but also to selfishness and greed. But greed is not the only mortal sin, there is also envy (something the left likes to use for their class warfare and the justification to give the rich a greater tax burden than them).

Patrick's original point of this posting was that free markets give people a positive motivation for personal success which at the same time provides for people's needs and wants in a way that makes people happy. So to have the free markets, yes, you allow the potenial for exploitation. But people like Patrick and myself know they are the exception, not the rule.

I happened to use the example of abortion and an exception not a rule to point out that since we have the freedom to have an abortion, it allows for the abuse of it by people for any reason whatsoever, and their reasons can be viewed by some as acceptable and others as unacceptable. Just like the idea of greed is subjective from person to person.

No system is perfect, but with freedom should come responsibility.

Anonymous said...

I thought that Wingnuts & Moonbat conservatives always respected responsibility.

Anonymous said...

Beth, I am just about out of patience with the perpetual victim hood and lower standards.

When a group of people is hard pressed to even complete a free k-12 education, turn its own neighborhoods into small scale war zones, be fathers to their own children and then turn around and blame it all on someone else and expect to be given things because they are ‘owed’. What a crock!

There’s really little to say about people who refuse to accept responsibility and stand on their own two feet without some sort of crutch. The high and might conservatives who enable and promote this dysfunction are even more contemptible.
For heavens sake, if a person wishes to have an abortion, it's NO bodys business but their own!
As long as they are not breaking any laws.
When are you conservatives going to get that into your heads?

Patrick M said...

First of all, clarification on my Maddoff comment: I could be convinced that he was greedy, based on the concept that he had no morality that made him consider anything other than acquiring more money. But it's still subjective as hell, thus my dislike of the word other than in a moral/ethical discussion.

Tao: You remember when I said:

Because greed is in the eye of the judgmental. It can't be quantitatively measured.

Right now you're defining a whole lot of other things (fiscal irresponsibility, criminal activity, flat-out stupidity) as greed. and you manage to dismiss (and misrepresent what I say) with statements such as:

You say you have no problem with people who break the law being punished and then you also want no regulations and total free markets.

If you can cite where I think there should be no regulation....

There is a reason government exists. It is to secure the rights of the individual from other individuals. This requires regulation, but no more than necessary.

Because where I would have agreed with you is if you had brought the idea of morality into play.

Try to defend a system that supports AIG, banks, and GM and I am not interested.

I'm not. Our system wholly discounts the natural motivation of humanity in its design. That's why we have the mess we do.

Take a one dimensional definition of a broad concept, then make up a story that fits exactly the point you are trying to make and then pat yourself on the back for proving your own point...

Tao, it's the beginning of the discussion. I was defining a point.

101: I read you like a book Patrick.

Bullshit you did. I'm actually somewhat content with where I am, as my desires aren't necesarily for an assload of money right now (although I plan on making more in the future). And based on where I am, how hard I plan to work, and despite my abilities, I'm probably never going to make that damned much. But I'm not going to condemn those who bust their asses to get into the big leagues because a portion of them are scum.

Satyavati: Are you being paid to pursue YOUR passion, Patrick?

Not really. But I'm not that motivated.

Beth: Wow have I hit a nerve or what?

Yeah. You have.

Administator's note: Any future comments on this thread about abortion will be deleted, because I'd like to get back to the subject of the post. Otherwise I'd have to delete 17 comments (And Satyavati's last, which she mercifully deleted).

Anonymous said...

Unfortunately most stupid people don't realize that they are stupid...
Some of them have a blind side and just can not apprehend that not every road leads to abortion (sorry if I used that word that you said not to use...I just couldn't help myself).
But I would like to know If conservatives are so damn smart, how come they act so dumb?
Sometimes you get a little frustrated at some people when they are talking about a subject and then get side-tracked to their pet topic like ab#####n. LOL.
Some Damn conservatives spend their day sitting on their lard asses wanting to over turn Roe v. Wade.

Satyavati devi dasi said...

that "status quo" sort of mediocrity that comes with simply "meeting your needs".

I think this really depends on where a person's priorities are.

If I won the lottery tomorrow, once our needs were met, meaning that the mortgage and car loans were paid and there were no more debts, and that there was an adequate amount of money to run our house available, which means enough to pay the utilities and food and send us on our typical twice a year vacations, my priorities would be to underwrite some (nonprofit, charitable) projects that I have been involved in (and some I have not), give enough to all the family so that they didn't have to worry about foreclosure or repossession, and then, basically, just go on from there.

I'd go back to school (for palaeontology at UNC) and after that pretty much concentrate on the things in life that are important to me: mostly spiritual things.

The financial resources would really just be a tool that would allow me (us) the time to concentrate on those things that take priority.

I don't think I'd call it 'mediocrity'. I think 'mediocrity' would depend on what you're comparing.

Would I want to move to some huge home in some high dollar location? No. I like it here. If anything, we'd move to a smaller house on less land. Would I trade in my Tacoma? No. I like it. I want to be part of the 300K mile club. We don't need more than one television. Jewelery? Clothes? I've never really been into that stuff.

Last year we grossed just over 4x what we earned the second year we were married. Our lives, however, are substantially the same. I shop the same way, we eat the same things, we wear the same kinds of clothes we did. We took our first vacation ever (since our honeymoon) just two years ago, for four days, and we didn't go out of state. We don't lead an extravagant lifestyle. This house is a little bigger than the first one (1800sf vs 1100sf) we built and we both admit we were greedy and could have done with a smaller one. But it's still just a farmhouse.. nothing over the top or even impressive (to anyone but me).

I don't find us to be at all mediocre. I think it just depends on what's important to you.

Name: Soapboxgod said...

"Ayn Rand, was, of course, all in favor of greed....and abortion."

Unless you've extensively studied her philosophy, do not proceed to laud assertions about her views, her philosophy or otherwise.

Ms. Rand was not in favor of "greed" as you are defining it. Ms. Rand was a crusader for the inherent right of an individual to be the best within themself. She was a staunch supporter AGAINST the use of force to achieve such pursuits and she spoke vehemently against the Government's tactics of doing so.

Contrary to widely held and obviously widely missunderstood assertions, she was not an advocate of a "money at all costs" sort of ideology. She held that money was a mere consequence or corollary of the best of man's mind and his own productivity as the means by which he puts his mind to action.

The fiscal aspect of it was a value of the best the mind had to offer.

It had nothing to do with greed BB as nothing she advocated FOR took or required anything from another individual that they themselves weren't willing to voluntarily give.

On the subject of abortion...Ms. Rand was not in "favor" of abortion. Such a childish assertion is nothing short of claiming that an individual who doesn't go to church every single Sunday is nothing short of a Devil worshipper.

Her view on abortion was a moral right—which should be left to the sole discretion of the woman involved; and that morally, nothing other than her wish in the matter was to be considered. She held that no-one else had the right to dictate to her what disposition she was to make of the functions of her own body.

Such positions do not infer that she aspired to "favor" abortions.

I've spent the past 13 years studying Objectivism and I've heard all of the arguments BB. You'rs are none different in that they all are based on nothing more than a complete and total 100% missunderstanding of the philosophy. I don't fault you for your missunderstanding in so much as I fault you for professing to understand something that you do not.

Arthurstone said...

Rand's Objectivism isn't a philosophy. It's an ideology. And for libertarian political types, a cult.

Name: Soapboxgod said...

No. It is a philosophy. It passes muster on ALL tenets which comprise the pillars of philosophy.


You may not agree with it but it doesn't change its existence.

Arthurstone said...

A personality cult to boot.

Like Scientology.

Satyavati devi dasi said...

I was thinking this morning how this conversation kind of made me think of L. Ron... novelists presuming to be philosophers.

Years ago I read Dianetics out of sheer curiosity (during my Big Search) and coming up with the opinion that it was basically a lot of crap. Yet people fell and continue to fall for it. I don't know why; maybe they don't read the book.

Now, I haven't studied Objectivism in and of itself. I have checked out the Objectivist Party's webpage, since their aim is to promote Rand's teachings. I was hoping for a comprehensive explanation of how to put said philosophy (if it is indeed such) into popular practice, but was disappointed at the lack thereof.

One thing I did notice was their list of holidays. I appreciate their encouraging people to read and study, but 'Skyscraper Appreciation Day', despite the fact that I think the Chrysler Building is the most beautiful edifice ever made by man, kind of ruined any opportunity I might have had to take it all seriously.

It's unfortunate, but true. Novelists should stick to novels; I think the propensity to fiction may be just too hard to let go.

Name: Soapboxgod said...

Rand was first and foremost a philosopher. She merely crafted novels around said philosophy.

If it's an understanding and application of the philosophy you're after, you can get a general synopsis via Wikipedia (keyword: Objectivism).

BB-Idaho said...

Rand was a novelist; Aristotle was a philosopher.