thelinuxlink.net

Interesting article. Link

I tire of articles that contain those little "Liberal critics claim" cop-outs. Why not take an opinion for yourself and back it up, instead of pushing it on to others so you don't feel like you have to defend it?

He seems to suggest that the recent mortgage problem can be attributed to the free market "failing" because things didn't work out well. Of course some people call for regulation, because those people think it will help, whether or not it actually helps is a whole other matter. The free market philosophy doesn't claim that people won't do stupid things and make bad investments. It merely gives people the freedom to choose what they buy and whom they do business with, and the free market shakes out bad products better than the opposite end of the spectrum, with top-down leadership and planning. It responds faster and in a more organic way. It just happens to work better than any other system that's been tried.

Why not look at from the other direction? The mortgage industry is regulated quite heavily, and as he says in the article, people were investing without even knowing what it was they were buying. There's no regulatory help for people who are ignorant about the investments they're buying. The current regulation doesn't help, but apparently more regulation will? Every time regulations don't work, people simply claim you need more of them. Why not just admit that more often than not they don't work at all?

Look at free (as in freedom) software, you don't have top down planning going on throughout the operating system, there's competition in the space of many applications, and even though no company sits there planning out the whole OS in detail, it works quite well, and is getting better all the time, even advancing faster than proprietary operating systems, I'd say. Any program that doesn't work well can always be dropped for something that works better if it comes along. The users decide which applications they'll use, and they pick the ones that work for them. The whole OS is terribly complex, but it seems that the free software community manages it well.

The biggest hindrance any GNU/Linux distribution has for the normal user is overcoming silly software patents, which are brought out by the interference of government in the market. Imagine if we didn't have to worry about patents. How much easier would things be for every distro out there? The extension of copyright law and the proliferation of patents seem to favor the idea that government interference seem to do more harm than good, and hinder competition. The more the government gets involved in the economy, the more businesses get involved in government and try to sway things their way, using the government to knock out competition or somehow favor their own company.

I could be wrong about all this, but from what I've seen, I'd take less government interference and regulations over more of them any day.

Vogateer wrote: Look at free (as in freedom) software, you don't have top down planning going on throughout the operating system, there's competition in the space of many applications, and even though no company sits there planning out the whole OS in detail, it works quite well, and is getting better all the time, even advancing faster than proprietary operating systems, I'd say. Any program that doesn't work well can always be dropped for something that works better if it comes along. The users decide which applications they'll use, and they pick the ones that work for them. The whole OS is terribly complex, but it seems that the free software community manages it well.

The biggest hindrance any GNU/Linux distribution has for the normal user is overcoming silly software patents, which are brought out by the interference of government in the market. Imagine if we didn't have to worry about patents. How much easier would things be for every distro out there? The extension of copyright law and the proliferation of patents seem to favor the idea that government interference seem to do more harm than good, and hinder competition. The more the government gets involved in the economy, the more businesses get involved in government and try to sway things their way, using the government to knock out competition or somehow favor their own company.

It's interesting that you mention the Linux community, because if there is one sector of the internet that truly benefits from anti-trust laws and government regulation of certain software companies based in Redmond, WA, as well as predatory, monopolistic internet service providers, it's the FOSS community. Take net neutrality for example. As a FOSS user, there is no greater concern than the threat of "bit discrimination", or packet shaping. Let's just take a hypothetical example: Comcast and Microsoft sign a deal that lets Microsoft-related websites receive more bandwidth than FOSS-related websites. Without net neutrality, that could become a reality, and in my situation, there would be nothing I could do. Comcast has slowly driven out all other broadband competition. It's either Comcast, dial-up, or nothing at all. Freedom to choose means nothing when there are no choices. Without some kind of governmental law prohibiting this kind of abuse of power, I would be forced to accept slower load times for any website Comcast wants. And sadly, this is already happening in some ways, they already throttle BitTorrent traffic, because they assume all torrents are used for pirating movies and music, regardless of the fact that all my BitTorrent usage is entirely legal.

The article begins:

the dominant idea guiding economic policy in the United States and much of the globe has been that the market is unfailingly wise

and then mentions the Invisible Hand theory:

But now the invisible hand is being asked to account for what it has wrought. In this country, many economic complaints — from the widening gap between rich and poor to the expense of higher education — are being dusted for its fingerprints

Both truths. For the former, the market is wise. The market always gets the most money it can from people. The main problem faced by businesses is that the customer has money they want. The solution? Take from the easiest prey. Is that right? Maybe not but the solution is not regulation of the business but the education of the consumer. Education is the key to everything because it empowers the average man. Regulation puts power in the hands of the government. Give a man power to make decisions himself and then he will educate himself by learning from his mistakes.

For the latter, Adam Smith never said the invisible hand would prevent a fool and his money from parting.

When people are foolish with their money, they suddenly want to transfer what little power they have to others and complete the cycle, fool looses money, now fool voluntarily gives up power to make decisions. Life would be so much easier if we didn't have to risk doing something dumb once in a while.

Be careful what you wish for.

Brian wrote:Be careful what you wish for.

... because you might just get it!

I'll just throw in that our current mortgage/lending practices are NOT free market economics. As alluded to by another poster, government reguation played the biggest hand in this. The government requires lenders to lend to nearly anyone, by having FHA, VA, HUD, programs where the minimum requirements to get into a home are so low, no-money/little down, etc. The government in turn guarantees those loans to the lenders, which encourages lendors to give loans to just about anyone.

Now if we were in a true free market economy, lenders would require 20+% down, excellent or near excellent credit and so forth. Thus we would not be in the situation we are in now. If the government would have just stayed out of this we would be not be in the situation we are in.

It really shows the naive et te of people who think that the US is a Free Market society when the reality is we have not been for some 70 years. For the most part I would say we are a new hybrid of Capitalism and Socialism. Whatever you want to label it, it is destructive and I am left to speculate on how much longer the US will survive.

We live in interesting times indeed.

Oh and I forgot to mention "No Doc" loans, now that one the government had little to do with. Whoever came up with that loan "product" should have been laughed out of the board room. That was bound to be a disaster.

Plus there are a whole other host of contributing factors that. The Fed making cutting rates to which banks could borrow money for next to nothing. Banks like Bank of America and Countrywide putting "non performing assets" on completely different ledgers so as to not show a loss to it's share holders. This thing is way deeper than a "oh those Capitalist pigs" argument.

Simulcra wrote:Now if we were in a true free market economy, lenders would require 20+% down, excellent or near excellent credit and so forth. Thus we would not be in the situation we are in now. If the government would have just stayed out of this we would be not be in the situation we are in.

And millions of people wouldn't be able to own houses. They would be forced to rent from already privileged people, widening the already large and growing gap between rich and poor.

Simulcra wrote:It really shows the naive et te of people who think that the US is a Free Market society when the reality is we have not been for some 70 years. For the most part I would say we are a new hybrid of Capitalism and Socialism. Whatever you want to label it, it is destructive and I am left to speculate on how much longer the US will survive.

We live in interesting times indeed.

More like state capitalism or crony capitalism. Big business in bed with big government. But I will concede that what we have now is far from a free market or *true* capitalism in any meaningful sense. I honestly wouldn't be surprised to see the American empire fall within 100 years. This coming century is going to be an interesting one to say the least.

Now when you get into the area of Internet access, we're bordering on the monopoly status. Nobody else can use the coaxial cable coming into my home except Cox. There is a weaker DSL product available, but really the competition is pretty pathetic, and governed by the fact that one company controls the line going to my home. To me, it's very much like electricity, gas, water, or any other utility. I don't have a (real) choice in the matter. There's little competition, and no reason to improve. Perhaps the free market can do well in this area, but not in the way it's currently being done. In this case, where a company enjoys near monopoly status due to physical constraints (nobody else can use the coaxial cable going to my house), I'm in favor of regulation. One company shouldn't control what I can access on the web. When wireless becomes the way to access the Internet, then competition can open up, and this shouldn't be as much of an issue. I'm too tired to look this up, but I also seem to recall telcoms getting big tax breaks to bring fiber optic to the home, while not doing what they promised to do and pocketing the money.

Anyhow, that's the exception to the rule. After working at a bank, I can say that there's no reason a bank is going to deny you a loan unless they honestly think you won't pay it back. They're not trying to keep the poor down, they just want to make money. If you can't pass a bank's credit check and income standards, then honestly, you really shouldn't be buying a house. Nobody has an entitlement to home ownership.

But yeah, it should be obvious to people that we do not have a free market at the moment. Hell, there's no real reason for the "Fed" to be controlling interest rates. I'd rather go back to the gold standard, and stop having appointed officials devaluing people's savings by inflating our money.

Happened upon this article, which is an interesting read:
http://fare.tunes.org/liberty/microsoft_monopoly.html

It's a long one, and I'll have to read it again, but it's intriguing.