Progressively Corrupting Democracy

I was watching “Democracy Now!” (a very “loony lefty progressive” show that purports to be “news” but is more consistently a “bash America bash conservatives bash libertarians” propaganda machine advocating for socialism) and they have begun a new mantra.

Now they announce their name, then immediately follow with their website. As a result, you get “Democracy Now, Democracy Now dot…” and it almost sounds like one of those things you would shout at a street propaganda event. Repetitive chanting.

This got me thinking (always a dangerous thing ;-)

WHY?

Why does the “progressive socialist” movement constant chant for “democracy”? It’s the last thing they want. They want a totalitarian system (like all the other Socialist Workers Paradises – Soviet Russia, Maoist China, Nazi German, Fascist Italy, Castro’s Cuba and Peronist Argentina, and a long list of others…)

Catch Up Here

For those doubting the inclusion of Nazi, Fascist and Peronist movements, please catch up at the following links before carping:

https://chiefio.wordpress.com/2011/01/15/liberal-fascism/

https://chiefio.wordpress.com/2011/01/17/social-justice-and-fascism/

https://chiefio.wordpress.com/2011/01/19/i-am-a-liberal/

https://chiefio.wordpress.com/2011/01/20/nationalist-socialists/

https://chiefio.wordpress.com/2011/03/15/fascist-doctrine/

https://chiefio.wordpress.com/2011/03/25/some-quotes-on-socialism-and-fascism/

and the wiki on Peron:

http://en.wikipedia.org/wiki/Juan_Perón

As a colonel, Perón took a significant part in the military coup by the GOU (United Officers’ Group, a secret society) against the conservative civilian government of Castillo. At first an assistant to Secretary of War General Edelmiro Farrell, under the administration of General Pedro Ramírez, he later became the head of the then-insignificant Department of Labor. Perón’s work in the Labor Department led to an alliance with the socialist and syndicalist movements in the Argentine labor unions. This caused his power and influence to increase in the military government.

After the coup, socialists from the CGT-Nº1 labor union, through mercantile labor leader Ángel Borlenghi and railroad union lawyer Juan Atilio Bramuglia, made contact with Perón and fellow GOU Colonel Domingo Mercante. They established an alliance to promote labor laws that had long been demanded by the workers’ movement, to strengthen the unions, and to transform the Department of Labor into a more significant government office. Perón had the Department of Labor elevated to a cabinet-level secretariat in November 1943.

Then I Realized It Is Just A Transitional Step

Our founders clearly knew that pure democracy was unstable.

http://en.wikipedia.org/wiki/Federalist_No._10

He saw direct democracy as a danger to individual rights and advocated a representative democracy in order to protect what he viewed as individual liberty from majority rule, or from the effects of such inequality within society. He says, “A pure democracy can admit no cure for the mischiefs of faction. A common passion or interest will be felt by a majority, and there is nothing to check the inducements to sacrifice the weaker party. Hence it is, that democracies have ever been found incompatible with personal security or the rights of property; and have, in general, been as short in their lives as they have been violent in their deaths.”

It’s been known for a long time. Why would folks advocate for a system known to implode?

And it sunk in that they don’t want democracy to RULE they want it to fail; so they can take over. They want:

http://www.brainyquote.com/quotes/authors/a/alexis_de_tocqueville.html

The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.
Alexis de Tocqueville

Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.
Alexis de Tocqueville

Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.
Alexis de Tocqueville

A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
Alexis de Tocqueville

All those who seek to destroy the liberties of a democratic nation ought to know that war is the surest and shortest means to accomplish it.
Alexis de Tocqueville

No protracted war can fail to endanger the freedom of a democratic country.
Alexis de Tocqueville

There are two things which a democratic people will always find very difficult – to begin a war and to end it.
Alexis de Tocqueville

Thus all the military adventures and all the “war on poverty” and “war on drugs” and war on … what next? Obesity? What liberty is not already under siege?

What new tax has not already been proposed?

What new “democratic” move to more “restraint” of freedoms and servitude?

To quote Rahm Emanuel: “You never want a serious crisis to go to waste” so what better way to make “Progress” than to create the crisis in the first place via feeding the process of “democratic instability”…

Don’t think others are “bought in” to that idea? Here’s Hillary and some Europeans on Climate Change:

In Conclusion

So that’s how I see this “fitting”. The Progressives want to push “democracy” as a way to lead to the collapse of the Republic that then allows the final step into a Socialist Workers Paradise. It’s not a goal, it’s a means to the crisis they seek to exploit.

The WANT the majority to vote for itself the largess of the public purse.

http://vernonsplace.net/links/Toqville.html

Alexis de Tocqueville quoted more than a century ago that this great experiment in self governing which we call the United States would survive only until the American People discovered they could vote themselves largess from the public purse. In other words, when they learned how to feed at the public tax trough by electing that breed of politician who would empty someone else’s pockets, via taxation, and give the stolen money to them. We have elected far to many such and allowed them to seduce us into believing we are entitled to a share of someone else’s money. We aren’t. Not now, not ever.

It is not ignorance of this issue that is driving the Progressives to push “democracy”; it is the desire to exploit it and to create the “crisis” that they will then not “waste”…

There is no interest in making a stable and secure government of our Republic. There is no interest in fixing the problems with a direct democracy. There is an interest in the push to sufficiently great direct democracy such that the Republic falls, and via bribing people with their own money (vis Obamacare), so that the Republic can be replaced with the Progressive version of Socialism, the “Third Way” with a strong autocratic leader. Just as Wilson wanted. Just as FDR wanted. Just as Clinton wanted.

http://sociology.berkeley.edu/public_sociology_pdf/weir.pdf

The Collapse of Bill Clinton’s Third Way
Margaret Weir
University of California, Berkeley
Forthcoming in New Labour, edited by Stuart White and Susan Giaimo (Macmillan)

In the waning years of his administration, Bill Clinton seized on the idea of the third way to frame his
achievements
in office, anxious to be remembered for something other than scandal. The notion of a third way–a
policy and politics threaded between the market and old style social democracy
–is inherently ambiguous. But in the
United States, which never embraced many of the main tenets of postwar social democracy, charting a third way is
especially murky. Some versions of the third way envision a more ambitious role for government than that of the
American federal government even in the heyday of postwar liberalism
; others propose that government do
considerably less.

Personally, I don’t find it ambiguous at all. The Third Way has a long history as the description of the Fascist blending of Socialist principles into a corporatist mold. Using socialist central planning to drive markets rather than free market principles.

It always ends the same way. In strong centralized control leading to an autocratic government.

But I guess that’s democracy for you… and why there is no Democrat today who could make as speech like JFK did about the virtue of cutting tax rates…

Sounds like a “modern” Republican, doesn’t it? That’s a real Democrat for you… and a complete anathema to the Progressives of today who pwned the Democratic party some time ago…

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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78 Responses to Progressively Corrupting Democracy

  1. PhilJourdan says:

    I do not recall who enlightened me (but it was on your blog) about the way the cycle works. But you are correct – it is a transitory state. George Orwell wrote Animal Farm over 60 years ago, yet nothing has changed. The takers are running the show and they will take until there is nothing left to take, then comes revolution which will lead to death, starvation, and ruin, until some producers manage to get back in business and start the cycle over again.

    IN a society where everything is hand to mouth, there is no room for takers, so they either die out or have to work. Once a socity has enough wealth to be generous, they crawl out of the wood work and suck it all down until there is nothing left to take. Then they kill the host. parasites are not symbiots.

  2. E.M.Smith says:

    @PhilJourdan:

    I think you are talking about the Aristotle version of it:

    http://www.iep.utm.edu/aris-pol/

    Having established these as the relevant criteria, in Book III Chapter 7 Aristotle sets out the six kinds of regimes. The correct regimes are monarchy (rule by one man for the common good), aristocracy (rule by a few for the common good), and polity (rule by the many for the common good); the flawed or deviant regimes are tyranny (rule by one man in his own interest), oligarchy (rule by the few in their own interest), and democracy (rule by the many in their own interest). Aristotle later ranks them in order of goodness, with monarchy the best, aristocracy the next best, then polity, democracy, oligarchy, and tyranny (1289a38). People in Western societies are used to thinking of democracy as a good form of government – maybe the only good form of government – but Aristotle considers it one of the flawed regimes (although it is the least bad of the three) and you should keep that in mind in his discussion of it. You should also keep in mind that by the “common good” Aristotle means the common good of the citizens, and not necessarily all the residents of the city. The women, slaves, and manual laborers are in the city for the good of the citizens.
    […]
    Aristotle says of democracies that “[D]emocracies undergo revolution particularly on account of the wanton behavior of the popular leaders” (1304b20). Such leaders will harass the property owners, causing them to unify against the democracy, and they will also stir up the poor against the rich in order to maintain themselves in power. This leads to conflict between the two groups and civil war. Aristotle cites a number of historical examples of this. Oligarchies undergo revolution primarily “when they treat the multitude unjustly. Any leader is then adequate [to effect revolution]” (1305a29). Revolution in oligarchical regimes can also come about from competition within the oligarchy, when not all of the oligarchs have a share in the offices. In this case those without power will engage in revolution not to change the regime but to change those who are ruling.

    http://mandatorylurking.blogspot.com/2006/10/tyranny-oligarchy-and-democracy.html

    Tyranny, Oligarchy and Democracy
    BACKGROUND

    Aristotle’s Politics puts forward his view of the political cycle, whereby the governmental structure moves through three forms. Each of these forms has its ‘corrupted’ version which leads to discontent, revolution, and the next stage in the cycle.

    Monarchy – rule of the ONE (Monos) (typically Kingship)
    Leads to Tyranny

    Aristocracy – rule of the GOOD (Aristoi) (typically a land-owning or commercial group)
    Leads to Oligarchy

    Democracy – rule of the PEOPLE (Demos) (typically an assembly of free-born resident males)
    Leads to Mob rule / Reactive democracy / Demagogracy

    But Plato picked it up too:

    http://www.francesfarmersrevenge.com/stuff/archive/oldnews5/democracy.htm

    Democracy Leads To Tyranny

    Plato, in his Republic, tells us that tyranny arises, as a rule, from democracy. Historically, this process has occurred in three quite different ways.
    […]
    The tyranny would evolve from the very character of even a liberal democracy because there is, from the beginning on, a worm in the apple: freedom and equality do not mix, they practically exclude each other. Equality doesn’t exist in nature and therefore can be established only by force. […]

    The first road to totalitarian tyranny (though by no means the most frequently used) is the overthrow by force of a liberal democracy through a revolutionary movement, as a rule a party advocating tyranny but unable to win the necessary support in free elections. The stage for such violence is set if the parties represent philosophies so different as to make dialogue and compromise impossible. Clausewitz said that wars are the continuation of diplomacy by other means, and in ideologically divided nations revolutions are truly the continuation of parliamentarism with other means. The result is the absolute rule of one “party” which, having finally achieved complete control, might still call itself a party, referring to its parliamentary past, when it still was merely apart of the diet.

    And thus, I might interject, the facination of Progressives with “revolution” and “revolutionary ‘justice'”…

    A typical case is the Red October of 1917. The Bolshevik wing of the Russian Social Democratic Workers’ Party could not win the elections in Alexander Kerenski’s democratic Russian Republic and therefore staged a coup with the help of a defeated, marauding army and navy, and in this way established a firm socialistic tyranny. Many liberal democracies are enfeebled by party strife to such an extent that revolutionary organizations can easily seize power, and sometimes the citizenry, for a time, seems happy that chaos has come to an end. In Italy the Marcia su Roma of the Fascists made them the rulers of the country. Mussolini, a socialist of old, had learned the technique of political conquest from his International Socialist friends and, not surprisingly, Fascist Italy was the second European power, after Laborite Britain (and long before the United States) to recognize the Soviet regime.

    The second avenue toward totalitarian tyranny is “free elections.” It can happen that a totalitarian party with great popularity gains such momentum and so many votes that it becomes legally and democratically a country’s master. This happened in Germany in 1932 when no less than 60 per cent of the electorate voted for totalitarian despotism: for every two National Socialists there was one international socialist in the form of a Marxist Communist, and another one in the form of a somewhat less Marxist Social Democrat. Under these circumstances liberal democracy was doomed, since it had no longer a majority in the Reichstag. This development could have been halted only by a military dictatorship (as envisaged by General von Schleicher who was later murdered by the Nazis) or by a restoration of the Hohenzollerns (as planned by Brüning). Yet, within the democratic and constitutional framework, the National Socialists were bound to win.

    How did the “Nazis” manage to win in this way? The answer is simple: being a mass movement striving for a parliamentary majority, they singled out unpopular minorities (the smaller, the better) and then rallied popular support against them. The National Socialist Workers’ Party was “a popular movement based on exact science” (Hitler’s words), militating against the hated few: the Jews, the nobility, the rich, the clergy, the modern artists, the “intellectuals,” categories frequently overlapping, and finally against the mentally handicapped and the Gypsies. National Socialism was the “legal revolt” of the common man against the uncommon, of the “people” (Volk) against privileged and therefore envied and hated groups. Remember that Lenin, Mussolini, and Hitler called their rule “democratic” – demokratiya po novomu, democrazia organizzata, deutsche Demokratie-but they never dared to call it “liberal” in the worldwide (non–American) sense.
    […]
    Then there is the third way in which a democracy changes into a totalitarian tyranny. The first political analyst who foresaw this hitherto-never-experienced kind of evolution was Alexis de Tocqueville. He drew an exact and frightening picture of our Provider State (wrongly called Welfare State) in the second volume of his Democracy in America, published in 1835; he spoke at length about a form of tyranny which he could only describe, but not name, because it had no historic precedent. Admittedly, it took several generations until Tocqueville’s vision became a reality.

    He envisaged a democratic government in which nearly all human affairs would be regulated by a mild, “compassionate” but determined government under which the citizens would practice their pursuit of happiness as “timid animals,” losing all initiative and freedom. The Roman Emperors, he said, could direct their wrath against individuals, but control of all forms of life was out of the question under their rule. We have to add that in Tocqueville’s time the technology for such a surveillance and regulation was insufficiently developed. The computer had not been invented and thus his warnings found little echo in the past century.

    The whole thing is well worth a read..

    Some more quotes:

    http://www.freerepublic.com/focus/f-news/1925583/posts

    “It had been observed that a pure democracy if it were practicable would be the most perfect government. Experience had proved that no position is more false than this. The ancient democracies in which the people themselves deliberated never possessed one good feature of government. Their very character was tyranny; their figure deformity.”
    Alexander Hamilton June 21, 1788

    “The world is weary of statesmen whom democracy has degraded into politicians.”
    British Prime Minister Benjamin Disraeli -1850

    “The adoption of Democracy as a form of Government by all European nations is fatal to good Government, to liberty, to law and order, to respect for authority, and to religion, and must eventually produce a state of chaos from which a new world tyranny will arise.”
    Duke of Northumberland 1931

    “I have long been convinced that institutions purely democratic must, sooner or later, destroy liberty or civilization, or both.”
    Thomas Babington Macaulay

    “Democracy forever teases us with the contrast between its ideals and its realities, between its heroic possibilities and its sorry achievements.
    Agnes Repplier

    “Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.”
    C.S. Lewis

    A good politician under democracy is quite as unthinkable as an honest burglar.
    H.L. Mencken

    Nothing…is unchangeable but the inherent and unalienable rights of man.
    Thomas Jefferson (letter to John Cartwright, 1824)

    Be in general virtuous, and you will be happy.
    Benjamin Franklin (letter to John Alleyne, 9 August 1768)

    And this one I cannot verify:

    A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.
    A writer claimed it was Thomas Jefferson, but it’s not in his style.

    1 posted on 11/14/2007 2:46:13 PM by Loud Mime
    [ Post Reply | Private Reply | View Replies]
    To: Vision; sauropod; gondramB; Loud Mime; sneakers; toomanygrasshoppers; jasoncann; gr8eman; …
    PING!
    2 posted on 11/14/2007 2:46:56 PM by Loud Mime (Life was better when cigarette companies could advertise and lawyers could not)
    [ Post Reply | Private Reply | To 1 | View Replies]
    To: Loud Mime

    The founders despised “true” democracy… they understood it to be a failed and flawed construct, which is why they gave us a Republic.

    Sadly their posterity is largely so ill educated and ill informed that many worship at the alter of democracy and not liberty.

  3. boballab says:

    EM:

    Peron’s ties to the socialist’s predates, by many years, his becoming the head of the Department of Labor under Ramirez. In the 1938 he went on a tour of Europe:

    Tour of Europe:

    By the late 1930’s, Lieutenant Colonel Perón was an influential officer in the Argentine Army. Argentina did not go to war during Perón’s lifetime: all of his promotions were during times of peace, and he owed his rise to his political skills as much as his military abilities. In 1938 he went to Europe as a military observer and visited Italy, Spain, France and Germany in addition to a few other nations. During his time in Italy, he became a fan of the style and rhetoric of Benito Mussolini, whom he greatly admired. He got out of Europe just ahead of World War Two and returned to a nation in chaos.

    http://latinamericanhistory.about.com/od/thehistoryofargentina/p/09juanperon.htm

    A 6 book series of “historical fiction” by W.E.B. Griffin is set during that time and place. In it Peron, Farrell and Ramirez all make appearances. The GOU, it’s coup and aftermath play a large but secondary plot line to the OSS vs Nazi plot. You can find the books here:
    http://www.amazon.com/s/ref=nb_sb_ss_i_1_36?url=search-alias%3Dstripbooks&field-keywords=honor+bound+series+by+w.e.b.+griffin&sprefix=honor+bound+series+by+w.e.b.+griffin

  4. Jason Calley says:

    Perhaps a democracy could work on a small scale — maybe ten people, perhaps even 100 people, not likely as many as a thousand people. Based on my observation of several communes during the sixties and seventies, I would not think it possible to have a working democracy for more than three people at a time, and that would assume that at least one of them was apathetic. :) Certainly it is not possible to have a democracy of 300 million, no more than we can run city buses with 30 people fighting for control of the steering wheel.

    In the real world, “democracy” — at least when speaking on a national level — means “everyone can vote, but a small group will count the votes, make the laws and enforce their own will.” In the real world, the common voters have as much control as the Third Grade Class President who is given absolute authority to do whatever the teachers and Principle will allow and agree to.

    E.M., I think you are right. Democracy is the simplest step to tyranny. Either democracy collapses and calls for a tyrant, or it slides into tyranny quietly.

    The good news is that any form of centralized control, whether it is fascism, national socialism, or any of the other flavors of socialism, eventually collapses under its own inefficiencies. “Eventually” might be a long and unpleasant time though…

  5. Pascvaks says:

    Franklin knew full well what he was speaking of when he said, “..if you can keep it.” They are very fragile things, democracies. People, being people, always want to get a leg up on each other; after a while, there’s a few slimey bastards at the top of the heap who never liked the rules anyway and don’t feel like stepping down. What ya goin a do?

    Around four score and five we saw the outbreak of shooting between those who didn’t like a strong central government and those who did, and the rest is history. Its now been about seven score and six since that little roust-a-bout ended and it wouldn’t surprise me if to see another kick off in the near future. But, on the other hand, the way folks are today, attached to the teats of the great Federal Milk Cow, it wouldn’t surprise me if we never see another roust-a-bout; just some generals backing some president who would be king and telling Congress and The Supremes to take a hike.

    Freedom isn’t free! Ya’ really do have to fight to protect it against all enemies, foreign and domestic. It one of those 24/7/52 forever kinda’ jobs.

  6. Jason Calley says:

    By the way, whenever I hear the name “Progressive” I always think “Bolshevik.” Not for the obvious reason, but because of the wonderful propaganda use of each. When the Russian Socialists were still a tiny, powerless political sect, they took on the name “Bolshevik”, a name translated as “Majority.” Every time that they would manage to get mentioned in the newspapers, their name pushed home the idea that they were somehow the party of the majority, a populist movement for the common man.

    In the same way, now we have the “Progressives.” Obviously they must stand for progress, for advancement, for the future. Anyone who stands against them must be — what? — retrograde? Luddites? Neanderthals?

    The irony is stunning.

  7. Jason Calley says:

    @ Paskvacs “Freedom isn’t free! Ya’ really do have to fight to protect it against all enemies, foreign and domestic. It one of those 24/7/52 forever kinda’ jobs.”

    One hundred percent agreement with you. My own variation on that is:

    “Freedom isn’t free. Neither is slavery. Be sure which one you are buying.”

  8. Pascvaks says:

    We’re caught in a tight narrow point in history. The “technology” hasn’t kept pace with the population and we’re going to suffer for it. Whenever people get crowded, or have to think about dealing with a range of opportunities that don’t equal what their parents had, they start swinging their arms about in wild gestures and running their mouth. Somebody kills an archduke, someone bombs someone else’s harbor, or throws someone’s tea into a bay. The excuse doesn’t matter, it’s just time to reduce the surplus population in someone else’s back yard so you have more and they have less, or cast off a crazy monarch.

    Oh to be in the grand day of interstellar flight! Oh to zip through the galexy in a ‘Millienium Falcon’ all our own and settle on a far off uninhabited world. Adam and Eve back in Eden! Dream on, dream on, dream on..

    Our parents, grandparents, great grands, and great great grands (back to the beginning of time) weren’t stupid or crazy. That little fact, all by itself, says volumes about what’s in store for the future of planet Earth. There’s nowhere else to go and it’s getting crowded again. Keep yer’ powder dry! Damn the CO2! Full Speed Ahead!

  9. gnomish says:

    there is a reason the word ‘anarchy’ is demonized, eh.
    the single dimension of spectrum upon which you are placing the dots is self.ownership vs slavery.
    that’s the princiiple. and all else is simply a matter of degree.

  10. gnomish says:

    epistemologically, the inversion of an absolute is wrong.
    it is deliberately used to debase the meaning of ‘words’ to disable them, for they are the tools of cognition that one needs to see through falsehood.

    therefore, ‘atheism’ presents itself as the negation of an absolute, theism- which is to invert the nature of the thing.
    similarly, anarchy is presented as the negation of an absolue, rule/submission to rule. that’s not an absolute.

    similarly, death and taxes are proclaimed as absolutes, while they are the negations of the absolute values of life and productivity.

    thie enables expoitation of a processor afflicted with these scotomae. if one is unable to logically refute (or even comprehend) a fraud, he is susceptible to it.

    language matters – it’s what we use for thinking.

  11. Chuckles says:

    Time to return some focus to the fact that you supposedly live in a constitutional republic, not a democracy?
    Unfortunately these days it seems many prefer Empire to Republic.

    I think that most of the references to democracy you have noted are more in the line of ‘Peoples Democratic Republic of …’, and all that brings to the party, than any theoretical system striving for the good of the people.

    Pournelle has some thoughts on this and similar subjects here –

    http://jerrypournelle.com/reports/jerryp/tyrant.html

    ‘I was born in a free country, but now it is a democracy’ David Warren.

    http://www.davidwarrenonline.com/index.php?id=1250

  12. hpx83 says:

    I hate to say it, but I really think that the US is on the verge of transition from a Republic to something completely different.

    http://savecapitalism.wordpress.com/2011/05/31/almost-no-one-understood-what-he-said/

    It was nice knowing you, land of the free.

  13. Jim says:

    Hi E.M. I finished “The Shadow Party” and am close to finishing “The Politically Incorrect Guide to Socialism.” Two very good books very related to your post. Highly recommended. Up next is Rules For Radicals by Alinsky. Then I’m thinking something from Mises might be appropriate having already read The Road To Serfdom.

  14. R. de Haan says:
  15. gallopingcamel says:

    Thanks for some wonderful quotes. You have a great grasp of the “Big Picture”. Here is a view from the “Bottom Up” by someone who was born in a poor part of Wales with declining industries, abandoned coal mines and stores boarded up. West Virginia on steroids.

    I arrived on these shores in 1982 and experienced severe culture shock. For example, it blew my mind to see so much good food thrown away. I was being paid three times as much for doing half the work required in a similar job in the UK. My first year here I paid more in income tax than my gross UK salary but I forked over cheerfully as I was retaining so much more cash than ever before.

    The longer I stayed the more I liked it, especially greater personal freedoms than I was used to. I remember asking my next door neighbor how to get a permit to fell a tree that was causing some problems. He looked quite perplexed; it turned out that property owners did not need anyone’s permission!

    In the last 38 years things have gradually changed to more closely resemble what I left behind. Now I can’t take my dog on the beach and I need a permit to burn dead wood.

    The USA seems determined to emulate the socialist “Economic Miracle” that I fled from, which means that the country is now run by drunken sailors. Actually that is unkind to drunken sailors; they earned their money before spending it.

    It won’t take much more economic foolishness before I will need to move again. Costa Rica is too expensive these days but parts of Panama, Mexico and Colombia have their attractions.

  16. xyzlatin says:

    The one political system most successful of all, not mentioned in your post is the Sharia Law system.
    Mohammed is the most successful general in history, because 1400 years after he wrote his war manual (actually he was illiterate and others wrote it for him), no country which comes under this totalitarian system for living and government, has managed to get out from under it.
    The system is simple. Conquer by stealth from within, or by the sword. Those you conquer either submit (Islam means to submit), or die. If they are of the Book (Christians and Jews), if they survive, they are to be second class citizens and have a special tax on them. Dhimmitude.
    Set up enclaves where everyone has to come to worship, overseen by a military commander (cleric), who ensures that everyone toes the line.
    Apostacy is forbidden, punishment death, so no one leaves the system.
    Have a close look at all the “ethnic hotspots” around the world, and you will see the Sharia system being tried out and pushed for.
    Break off a part of a State, set up another one beside it, under Sharia law, then start infiltrating the neighbouring state again.
    Thailand, Philippines, Indonesia, Malaysia, Chechnia, Afghanistan, Pakistan, Turkey, the Middle East, Nigeria and all the northern states of Africa, and now Europe which is under seige from within from its muslim immigrants.
    Freedom
    Socialism will get swallowed up eventually by Sharia.

  17. R. de Haan says:

    @gallopingcamel,
    Panama is ok if you go to the Panama-Costa Rica border region, think Boquete.
    Great infra srructure, good health services, internet, good people with the right mentality and a great climate with beautiful nature (bird parks) and it’s relative safe, low crime rates.

    However, the Panamanian Government has bought into the UN AGW madness and took on building wind farms and hydro electric plants and closed IMF loans which require the undersigning of UN treaties, not in favor of free spirits (Agenda 21).

    Hopefully they will wake up and continue their former track of policies.

    Real free places are becoming incredibly scarce these days.

    The best way is to maintain your personal independence taking care that you have no fiscal commitments in Panama which is possible if you earn your money outside it’s borders or take on a project within the tourism industry which are not taxed..

    Any strategy is limited as regulations change on a continuous basis and complexity requires the support of expensive lawyers which includes the acquirement of a residential permit.

    There is also the economic aspect of the fact that Panama has a dollar economy.

    This has caused quite a price spiral lately for gasoline and food.

    In case of further price hikes I fear for unrest among the local population which could back fire on foreigners, just like it happened in other MA and African countries.

    There is also the wild factor Venezuela, the continuing clashes between Columbia and the unrest in other MA states like Honduras. In short, no place provides a guarantee for continuity and there always will be a “surprise” factor, even in one of the most stable countries of MA.

    So, take care you have a plan B at all times and prevent taking on long term financial commitments.

  18. gallopingcamel says:

    R. de Haan,
    Thanks for all that! I am going to hang on here as long as I can but in the end I may have to vote with my feet. I understand that Ecuador has a dollar economy but I have not been there yet.

    Twenty five years ago I planned to retire to the delightful town of Cuernavaca in Mexico where Hernan Cortes retired. When the time came, the highway over the mountain had been constructed and Cuernavaca was within commuting distance of Mexico City. Today you can’t find that sleepy Mexican town; it has been destroyed by Office Depot and super-stores.

    We plan to rent rather than buy a home so if things go south we will be on the next plane out of there.

  19. kuhnkat says:

    xyzlatin,

    Sharia IS fascism cloaked in religion. You may be want to be more careful about banging your head too hard when you are praying.

  20. David says:

    EM-

    Right on track and great links as always. If you threw in “Social Justice” you would have reiterated what Glenn Beck has been saying for the last two years. {Begin flames now}. His opinion is that faith and core conservative values will be needed to overcome the onslaught of the communists/socialist/progressives. Not sure of his approach, but I agree that I don’t like the direction we are headed. You are right about Kennedy, he was a true liberal. It is key to note in that clip that when he speaks of “investment” it comes from tax-cuts putting money in the hands of the private individuals and not tax hikes putting money in the hand of the State as BO would have it. The Socialists took over the Democratic Party in the late 80s in reaction to the Christian Right’s presence in the Republican Party and they have “leaned forward” ever since. I’ll still take our system over any other in the world as we still have the power to fix it if people wake up in time to do so. “…if you can keep it”. Franklin possessed more intelligence than 100 of his modern day countrymen.

  21. Chuckles says:

    For balance, may I recommend ‘The Benefits of Socialism’ probably the most comprehensive book ever published on the subject. I read it from cover to cover.

    Available at –

    http://socialistbenefits.org/

  22. Jason Calley says:

    @ Chuckles Ha! I checked the book you linked to. I was very surprised to find much there that I agreed with! :)

    I think gnomish has it right: “the single dimension of spectrum upon which you are placing the dots is self.ownership vs slavery. that’s the princiiple. and all else is simply a matter of degree.”

    “Self ownership”, that slippery concept which we used to call liberty, but which has fallen into disfavor somehow… One can argue about Sharia, fascism, or socialism versus free markets and representative republics — but in the end, the question always comes down to “Who may force you to do what THEY want instead of what YOU want?” Who determines what wages will be? What we may use for money? What the prices in the market will be? Will those choices be made by the individual? Or will someone behind a desk (or a rifle stock) decide for everyone?

    From a strictly logical and ethical point, the anarchists hold the high ground. Their position is that no one — absolutely no one — may force you to do what you do not wish to do with your body and your property (with your actions only bounded, of course, by Jefferson’s maxim that our rights do not intrude to prevent other’s equal rights.) I wish I could convince myself that pure anarchism would work; it would relieve me of a certain ethical discomfort. I admit though that minarchy is as close as I can go. We humans are troop creatures, just as the other branches of the chimpanzee tribe are; we seem to need some sort of hierarchical structure or we really do descend into Hob’s law of the jungle. Call it government, call it culture, call it ethos, if anarchy were truly workable and stable; I think we would see more of it and on a larger scale. Is it possible to have a very small and limited government? One that is big enough to help cohere society, but which does not gather power to itself and devolve into tyranny? We have seen that using a piece of paper (the “Constitution for these United States”) has been a limited success but ultimately unworkable if the people do not support and enforce it.

    If anyone has a good argument that the USA is, in fact and not in fantasy, still a Constitutional Republic, I would like to hear it. Certainly we left Jefferson’s minimum government behind a long, long time ago. As near as I can tell, just like ancient Rome, we have passed the Republic phase even though we pretend otherwise. For better or worse, we have entered a very different phase of American history.

  23. Richard Ilfeld says:

    The differences between governments might best be defined by the size of the sphere of personal freedom they allow:
    For the ‘best’ (based on the sense of this group) it is defined by family, personal property, and investment, for the worst it is slightly less than the volume of ones skull – skin and hair appearance being govermentally defined. The Continuum is probably Libertarian — Absolutist. We need to look at the outcomes because the labels are designed to deceive.

  24. “Crisis is a chance….” Armageddonian words, really. My theory that it all began in the French Revolution, where a small financial elite financed a bunch of second or third level devils to pursue the secularization of the world.
    As a group of malignant, evil cells within a body foolishly try to violate the supreme rules which emanate from the brain, and become CANCER CELLS, this bunch of nuts, believing themselves more powerful than God will KILL THE BODY who nourishes them.

  25. May I make a prediction?: The 21st. century will witness the return of Monarchies and Theocracies, these last ones among the Arab countries and Monarchies in occident, in countries as Russia and Brazil.

  26. E.M.Smith says:

    @R. de Haan & hpx83:

    In on of my books about here (“Was God a Mathematician”) there is a story of one of Einstein’s friends / coworkers ( of about his repute) who was applying for US citizenship. He took it all way to seriously and was learning the entire constitution end to end and top to bottom. At one point he told the others with great concern that you could turn the USA into a dictatorships and never break a law in the process; that he had seen how to do it in reading the constitution.

    I suspect we are seeing that process play out. Hopefully it will take more than my remaining time… (50 years would be better, then my kids escape most of it too ;-)

    Ron Paul is one of those “odd ducks”. He thinks clearly. He has great ability to accurately project future events. He is typically right (after a couple of years…); but he just looks and sounds “odd”. So folks dismiss him. He also sees a “bit too far” and other folks think he’s nuts as they can’t see that far. (Like all the flack I took calling SLV ahead of where most folks can see… If you see to far and talk about it, you are seen as doing “crazy talk”…)

    So I love him and his noble fight, and I know he doesn’t have a snowball’s chance in hell of winning… He asks people to cross “a bridge too far”…

    @Jason Calley:

    Anyone who has tried it knows that even for small decisions a democratic process “has issues”. We’ve all said “where do you want to go for dinner?” or “Which movie?” and had things turn into an hour long equivocation match… Were saying “Who’s up for Pizza?” works much better…

    @Pascvaks:

    Good observation. That’s a large part of why I keep stressing to folks that there is no shortage of stuff and there is no shortage of energy. Had an Arab guy all up in arms over Land LAND LAND! and who was occupying what where. He “cooled out” a lot when I pointed out that the quality of land he was concerned about was about $500 / acre in the Desert Southwest and he could buy all he wanted… As a “scarce thing” he was in angst; as a “all you want, low price buffet” he didn’t want any…

    @gnomish:

    As usual, I’m seeing more dimentions than you do.

    It’s as you say on the X axis, but on the Y you need to put “number”. So I own me vs { KING (1) owns me; Politburo (several) own me; “Society” (democratic 51%) owns me, etc.} to get the rull map of things.

    Both axises matter as there is a significant difference between a king / dictator and a democracy.

    I also find your “negation of an absolute is wrong” to be a simplistic and error laden “tool”. The negation of life is death. They are a yin-yan set. I regularly use “the negative space of things” to gain insights. To say that the negation of a “God view” is a “No God View” is true and useful. To put it on a spectrum with “Absolutely no God” at one end and “All powerful God” at the other and “Godlike high tech Space Aliens” in the middle gives even more insight into how things work. Vis the “cargo cult culture” to whom we were demi-gods… If you don’t use the “negation” and “spectrum” tools, you have a very limited tool set. (LOOK! A NAIL!!!)

    @Chuckles:

    Americans are incredibly lazy about politics. (Too busy on “stuff that matters”… IMHO). An Empire is a lazy form of government. It’s all “That guy’s” problem, let him sort it out, and then I don’t have to think about it.

    It took me many years to realize it, but one of the worst things you can do in most folks eyes is to force them to think against there will. They will hate you forever for it.

    In an empire you don’t need to think… just follow orders.

    @Chuckles:

    I love that David Warren quote…

    @Jim:

    Oh boy, more to read… I need a few more lifetimes…

    @Gallopingcamel:

    As a kid, I used to wonder at the new arrivals as they would marvel at our “freedoms”. I didn’t understand that you could NOT do things where they came from.

    Now I do.

    My neighbor planted 3 redwood trees about 4 feet from our fenceline. Then, 2 years later, he sold the home. It’s now about 25 years later and the trees are Very Large. ( 15 meters? 45 feet? A couple of feet radius at the base) and the roots are lifting the fence between us and slowly breaking it.

    They are planted where the prevailing wind blows them directly toward the neighbors home. Redwoods, for those who don’t know, have shallow spreading roots. They depend on a continuous cover of trees around them to not blow over in a strong wind. In the “old growth” (what’s left of it) areas you can find whole trees spanning creeks on a regular basis as they fall toward the opening.

    WHEN these fall, they will take out the neighbors home.

    The guy who owns the home can not cut them down. I can not cut them down. The City can not cut them down.

    Only “The Redwood Commission” can grant permission to cut them down…

    Just amazing to me.

    OTOH, I can do a very sloppy job of spraying Roundup on the weeds under them… then wait a year…

    On one occasion I was getting a visa for a trip to Australia and asked the guy at the consulate “Did he think I’d have a good time in Australia?” He looked at me with that Aussie Way and said “Well now, Life is what you make, isn’t it mate?”… That has stuck with me ever since.

    To it I would now add “Freedom is what you make it”. So we are now in a “race condition” where they make their rules and I just need to find what parts they have overlooked…

    @Chuckles:

    OK, you got me. Clicked the link and ended up laughing… Nice job!

    @Jason Calley:

    While the uni-dimensional view has merit, the added dimention also brings more insight. Such as, with complete freedom of all individucals comes the Robber Barons and the Financial Moguls. Does it really matter if I am free of government bondage if I’m instead in bondage to The Company Store or if Standard Oil owns all the gas stations by ruthlessly destructively driving all the others out of business with predatory pricing? The “end point” is that someone gets all the money and then THEY are the dictator. We’ve “lived that dream” and it was a nightmare.

    It is one of the cruel ironies of Economics that an absolutely free market becomes a monopoly with a financial king calling all the shots. And then the little kings fight until one owns everything. There are inherent “finaincial economies of scale” in purchasing and getting loans that assure that the largest will win. Only a countervailing force prevents (or at least slows…) it.

    The unfortunately conclusion of this is that there can not be true complete economic freedom; for to have it, ends it.

    And without economic freedom, then the die is cast for government “control”, which leads to where we are…

    So you must balance on a knife edge of just enough government to fight off the monopolists and “bosses”; and not so much as to have to fight off the government…

    And we’ve lost our balance as they are now in cahoots…

    Read the history of The Pullman Riots as an example of why complete economic freedom fails…

    http://www.chicagohs.org/history/pullman/pul7.html

    http://www.encyclopedia.chicagohistory.org/pages/1029.html

    http://en.wikipedia.org/wiki/Pullman_Strike

    I don’t know which side I despise the most… the exploitative Robber Barron of the railroad or the Union Thugs demanding that he do what they want. Or, perhaps, the U.S. Marshals handed over to him which were used to kill the strikers…

    Through all of it the “average Joe” just wanting a ticket or to ship some goods got screwed as they were not at the barganing table…

    Rather like the “Baseball Strike” or the present “Football Strike” where the fans are the ones that lose as tickets rise to the stratosphere…

    So, like it or not, we need some kinds of laws to stop folks from resorting to violence and to prevent the kinds of collusion that folks inevitably try to indulge. To not have them is to live under a Robber Barron who owns every aspect of the means of production and delivery and beg credit from the company store to not starve…

    It is an inherent consequence of the “free market”.

    (Now all those folks who complain that I only ever toss rocks at Socialism can see the other side of me… I’ve said before that I’m not for Laissez-faire but, as there was little risk of it returning, had not reason to talk about it… Now folks can see that I was telling the truth. It’s a sucky system. Almost as sucky as the one we have now ;-)

    @Jason Calley:

    When Senators stopped being representatives of the States and instead were “peoples representatives” we lost the balance. Add in the direct election of the president and it got worse. At this point all of the legislattive is elected as is the head of the execultive. Only the judicial is not elected. We stopped being a true “Republic” some time back and became what I would call a “Representative Democracy”. Not quite a direct democracy, but not a republic (in the sense of folks making decisions free of the Tyrany of the Masses) either.

    So at this point we’ve just accumulated enough of that “tyranny of the masses” for the inevitable to happen. And it is. The debt clocks is your guide.

    @Richard Ilfeld:

    Governments do not “allow” freedoms. Freedoms are inherent to us; and if userped, must be taken back; by force if need be, per our founders… I just don’t think our present crop of citizenry is “up to the task”…

    Also, don’t forget “Hate Crimes”. Your emotional state is to be regulated as well…

    But yes, the words are corrupted deliberately, only outcomes are clear.

    @Adolfo:

    “Yes But”… they will not be called “King”, but “President” and will not stay limited to Russia, Venezuela, Cuba, Korea, etc…

    BTW, on this fine June First I’m looking at very dark clouds, cold, and the threat of rain. (50% per wunderground)

    The radar shows it just over the hills and up into Oakland as active rain.

    This is great winter weather, but June? We’re supposed to be in th 90’s F (or at least the 80’s) and with hot direct sun. Not this 60 F stuff… and rain? In California? In JUNE?

  27. Richard Ilfeld says:

    Maybe you could define your redwoods as the worlds biggest epiphytes. Nobody’d complain if you pruned a bromeliaad.

  28. E.M.Smith says:

    One of the odd consequences of the “redwood preservation” via commission is that ever fewer people are willing to plant one. I’m not willing to buy land with one on it… and I’d never plant one now. (At one time prior to the commission I was going to plant a couple just to watch how fast they grow… I’d never do that now.)

    So the general trend is toward “remove when possible and never plant”… In the past we would see redwoods in tubs at the local nursery all the time. None in the last decade or so…

    Gotta love that government effectiveness…

    SO I’m just waiting for them to fall over. Either I get a new house or I get the sun back…

    Maybe I’ll go water around them a whole lot just before the next big wind storm ;-)

    My “solution” for wanting some “fast shade” was to plant Timber Bamboo. It’s “just a grass” so not “protected”…

    So now we are getting more bamboo and less redwoods.

    Yeah, that’s the way to ‘preserve nature’…

    (At this point, any tree I plant has to be a fruit tree as they are exempt or has to be a minature sort as there is a minimum size threshold of something like a 6 inch trunk. So you cut them down just before they cross that limit… The city has an ordinance about the SIZE of tree you can cut, even if not subject to the Redwood Commission. So now I cut down all trees before they get that big. I’ve got a volunteer that I think is a pecan that has to come out this year… )

    “You can CHANGE behaviour but you can not CONTROL it. -E.M.Smith”

  29. Jason Calley says:

    @ E.M. You make some very good points about the down side of free markets and the rise of monopolies. I wonder though, how many of those monopolies grow, not because of the free market, but because of legislative distortion of the market. And let me interject to admit that I am speaking a very much theoretical way here, not particularly descriptive of The Real World. For example, suppose I have a trucking firm with a monopoly in a certain area. The simplest way to create such a monopoly is to convince (or bribe!) the local authorities to restrict licenses for any competition. Or perhaps I get violent, burn down the competition’s office and pay off the local police to prevent investigation. Maybe I form (by filing with the state for special permission) a corporation, that is to say, a business where I can make the decisions on what the corporation does, but in case of damages, I am not likely to ever be personally punished, only the corporation (and not my personal assets or freedom) will be held liable. I admit that there are people WAY more creative than me, but I find it hard to think of a way that a company can both create and maintain a monopoly within a free market, unless they have been given special grants of power by some governmental branch. Either their competition is artificially restrained, or they are given freedom from liability of their actions. (Which is to say that they are NOT in a free market, but rather in a controled market.) In a true free market, one which allows freedom of business but also has legal liability for harmful actions, the only way I see a long lasting monopoly is if the business in question constantly provides such good service and low prices that no one wished to compete with them.

    Meanwhile, in the real world… Like you, I think that we do, in fact, need at least minimal government to enforce laws against theft, fraud and violence — I just wish that the enforcement would take place a bit more consistently and universally. I do not expect to ever see a real free market, absolutely unfettered. I think though that much of the bad results we see in the real world are not free market caused, so much as due to subversion of the market by outside (mostly governmental) forces.

    By the way, I think you are right about the election of Senators. The 17th Amendment was more of a thorn than most people think. In retrospect, 1913 – 1914 was a bad couple of years with the Federal Reserve, and the 16th and 17th Amendments. I guess those three were needed to set stage for a World War. All that war money waiting to be made in a whole world at war, and there was the US with multilevel government and without a central bank, paper money, or income tax. Something had to be done to make the country ripe for war profits!

  30. gnomish says:

    ”I also find your “negation of an absolute is wrong”
    …The negation of life is death. ”

    that’s not what i said or meant but i’m not sure of a better way to express the thought. i can say the same thing another way, though-

    yes, the negation of life is death.
    life is the absolute; death is the negation of it.
    life is not the negation of death. death is not the absolute. life does not presume death; death presumes life. is that better?

    thus, to declare the negation of an absolute to be the absolute is illogical. that means that calculations done using it can produce errors.

    if a person has his ontology disabled by installation of such a scotoma in his metaphysics, he may, with the faulty logic that can now no longer validate the assertion by falsification, argue hermetically that by not destroying a house is the equivalent of building one.

    in the comments such an issue is observed where ‘reduction of taxation’ is equated with investment.

    or, it might allow to equate a very productive person with a robber. i’m sure you see how very wrong that is.

    or one might get much worse than that – resulting in a heavenly reward. death being everlasting life because they can be equated thanks to the inversion of absolutes.

    there is a similar reason for not allowing division by zero – if that were consistent with the logic, you could prove any numerical proposition at all.

    to negate a thing is to cause its existence to cease. it becomes not.
    the negation of an absolute is zero.

  31. gnomish says:

    extraneous comments:

    certainly the law against murder has put a stop to all murders, just to choose a random law as an example…
    so i’m sure, if laws do as is claimed, it would be possible to have just one law, like ‘don’t be bad’ and everybody won’t!

    and now we return to reality:

    a monopoly is, by definition, a creature of the state.
    absent enforcement to prevent competition or enforcement of a requirement to ‘buy’, the entity is not a monopoly.

  32. E.M.Smith says:

    @gnomish:

    I must admit that I find your mental gymnastics nearly impossible to replicate…

    Per “natural monopolies”:

    They are real, and do exist, completely without interference of a government. You do not need to have a requirement to buy to be a monopoly, only that others may not sell the same goods. That can be accomplished by many means, only some of which are governmental.

    As a trivial example:

    If I want sex with a given woman, she has a local monopoly on her.

    As a less trivial example (and this will help Jason Calley see how a monopoly can arise sans government as well):

    Railroads. They build a line from A to B. As they are the sole provider of rail traffic, they have a monopoly on that line. A competitor now must find a way to build an alternative rail line. In some cases that is functionally impossible (if, for example, I’ve bought the only path through the mountains) or possible, but only at such costs that I can not economically compete (I could try drilling a hole trough the mountains… much more practical now than in the 1800s when rail dominated).

    Similarly, a bridge over a river is often at a place that is the only practical place for 100 miles. In theory one could compete with a bridge further away, in reality, not so much.

    The other more spectacular example is Standard Oil. (Before we had several of them named by their States… that came AFTER the anti-trust laws and the breakup).

    The key here is “predatory pricing”. It basically says that whoever is “big enough” wins all the pie eventually (and eventually can be very very fast). So Rockefeller was “pretty big”. He would then enter a small town that already had a gas station or two, and price gasoline so cheaply that the other stations simply could not stay in business. Price was below costs. “Fattest wallet wins”. He would put a Standard Station just across the street from EVERY gas station and undercut them. As he was “big enough”, the other guys would go under. That, then left him the sole provider in town and he would jack up prices again to “monopoly optimal”. Any new entry attempt would be met with a renewal of predatory pricing. Didn’t take long for folks to learn not to compete with Standard Oil. He would then move to the next town and repeat.

    This continued until Standard had a functioning monopoly over large parts of the country (and was headed for 100%). That was when “trust busting anti-monopoly laws” were passed and Standard Oil got broken up into several parts (one of which survives as Exxon, after re-merging with another one that become Mobil … and another is Chevron/ Texaco…)

    This is historical fact, not conjecture. All on it’s lonsome Standard Oil using predatory pricing become a monopoly.

    A related concept is Monopsony. Single buyer. You saw this in places like the giant coal mining towns. Dominated by one employer. If you didn’t like the money they offered, you could leave. Except the only buyer of your home was The Company and you owed more to The Company Store than you could ever repay. (That, BTW, is where the phrase “The Company Store” originated…) At the time there was no effective way to “commute” to work somewhere else… The companies regularly indulged in “union busting” to maintain their local monopsony. Only labor laws changed that to allow the unions to survive as a ‘countervailing force’ to the monopsony. (Monopsony, meet monopoly… like that’s gonna end well… thus the Pullman Riots…)

    The economic literature is filled with thousands of such cases of monopoly and monopsony, both natural and artificial, and both partial, complete, and geographic. One example from “law driven” is patent law: it grants a limited time duration monopoly on an idea to the inventor to encourage invention. One from “nature” is the Rare Earths Mine in So. Cal. It’s the only place on the continent with that good an ore. As long as they are in business, they have a monopoly locally, and dominated the market for TV Phospors in the USA for decades. As a sidebar: They were put out of business by ANOTHER player with monopoly power: China. China funded (predatory pricing?) their mine until it dominated the world. Only now that they have said they will restrict outside sales has the So. Cal mine started to reopen. A very interesting case of watching Big Dog eaten by a Bigger Dog, that has now decided to take a nap…

    In many ways, THE major goal of marketing is to establish as much of a perceptual monopoly as possible to gain as much “monopoly pricing power” as possible. Think iPod, iPad, and iPhone. Yes, there are competitors, but the BRAND is a monopoly. (Similarly all the clothing brands like Guchi and Coach…). While there is an anti-priacy law, the reality is that it is only needed to the extent that the Marketing and Branding succeeds in creating monopoly pricing power to be pirated.

    More?

    Walmart.

    They use FINANCIAL economies of scale and DISTRIBUTION economies of scale to become a functional monopsonist. They use this leverage to get great deals from their vendors, then run the goods through a distribution network that can only be matched by someone as big as they are (and their is not enough market to support two entities that size…) So Walmart can get lower cost goods and pay lower wages while still using lower prices to drive the competition out of business. (Thus all the complaints about what is lost when a Walmart comes to town… No, I don’t think them evil. But it DOES happen.)

    They can always get lower cost loans for inventory carry costs and always get lower costs of goods sold and always have lower transportation costs than ANY other “competitor” so can always drive them out of business in any geography. (They DO have to stay clear of the “predatory pricing laws” so can’t sell at under cost… but if your “one cent over cost” is a dime less than the other guy’s “at cost” … Hey, it’s legal…)

    And that is why Walmart can grow as it does and run others out of business. Interestingly, they are not (yet) thought of as a monopoly as they have not (yet) put all the competition out of business. But they are useful as an example of how predatory pricing and economies of scale interact to create all that’s needed to grow a monopoly in the absence of laws to the contrary. If you can do it with groceries, you can do it with anything… and sans laws to the contrary, Walmart could take over all grocery selling (with the possible exception of minor niche and specialty shops where branding grants another kind of local monopoly power).

    Another?

    Electric Utilities and Communications Utilities. While great strides have been made on bringing “competition” to those markets; the reality is that only one company owns the power wires into my home and only one company owns the DSL wires. I can buy my basic service from others, but they get a “monopoly cut”…

    Another?

    Mountain tops.

    There is a company that has run around buying all the nice mountain tops. Best places for radio antennas. They sell space on their towers to various customers. Don’t like their pricing? Go find another mountain ouside of the area or put your antenna up down in the valley. (What? That won’t work? Well, then, pay up…)

    Oh, look at that, a nice rising chart:

    http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Stock&symb=amt&time=8&startdate=1%2F4%2F1999&enddate=6%2F1%2F2011&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=4&maval=24&uf=8&lf=2&lf2=4&lf3=1024&type=4&style=320&size=3&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=15&x=24&y=12

    There are so many ways to gain monopoly pricing that whole books have been written on it.

    Yes, there are “use the government” ways (thus the legions of lobbiests… like when Algore got the V-Chip put in all the TV sets and the sole provider gets a monopoly… or when CDMA is approved by the FTC for cell phones and Qualcom gets a guaranteed business)

    Trademark, patent, copyright, trade secrets law: All are to grant a kind of local monopoly. Want a Coke? You can only buy it from the CokaCola company. Trade Secret. Ditto KFC. (Though they are not pure monopolies as the subsitutes, Pepsi and Popeyes, are “close enough” for a lot of folks … but you still see monopoly advantages to the firms)

    Then there are Cartels. OPEC is a cartel with functional monopoly pricing power as the sole “swing producer” of oil in the world. There are partial substitutes in coal and natural gas, so they keep the price at just that point where the substitutes are not viable, then jack it up for a while to cream some extra. Just when some damn fool sinks a few billion into competing they drive the price down and put them out of business. (Predatory pricing again…) as they did several times after the Arab Oil Embargo.

    (You could fix this with a contervailing tariff, but folks in DC think tariffs are bad… or are bought by Saudi PAC money…)

    I could go on, but I won’t. It would take a few days to list all the general TYPES of monopoly power and illustrate where they come from and how they work. Like I said, whole books exist. But in general, think: Unions, Geography, Limited resource pool, economies of scale in buying, shipping, or borrowing, and collusion to get the big lumps (plus the government driven examples above).

    Ever wonder why it costs $5 to cross the Golden Gate Bridge when it was paid off years ago? Besides, you can always just drive all the way around the bay… “Oh, wait” the bridges on the other crossings have done price fixing at the same rate… gee… wonder why… Maybe you should just park your car and take a bus across. What? The meter only takes $1 coins and several an hour? Gee, maybe you could go park on the OTHER city streets…

    Or use the OTHER post office.

    Or drive on the OTHER “freeways” and buy gas without the “gas tax” to pay for them… Oh, wait, they started making the freeways into Toll Roads so you get to pay for them twice, once in your taxes and again to use them…

    In many ways, government monopolies are the worst…

    But you can always fly instead… or take the train. What? The airport is a local monopoly and the train is only ONE for the whole country? I wonder why…

    FWIW, the point is that in most markets for most goods there is some degree of “monopoly pricing power” reflected in the prices. Sometimes it’s a poor local monopoly (cable TV… I can read a book…) and sometimes it’s quite strong as a local monopoly (care to use the OTHER mini-bar in your hotel room at 2 am with no car in a foreign land? I didn’t think so…) And sometimes it is a monopoly that can only exist due to the copyright or patent laws (so Disney parks cost a fortune for everything….) but to say that there can not be a monopoly without government is to miss the point that ownership of a resource IS a monopoly on that resource.

    In a very real sense, being a Libertarian is advocating that you have a monopoly on you…

    Monopoly does not require a state at all, only firmly held property rights and lack of laws banning monopoly. The rest will arise of it’s own accord.

    Read your Adam Smith…

  33. boballab says:

    EM:

    I have to correct you on at least some of the Walmart section, since you put out something that is nothing but Union Propaganda, and that is what Walmart pays it’s employees (At least until the last CEO came into existence and changed policies post 2007).

    Prior to 2007 Walmart did not have a set pay scale for hourly employees. When they built a new store in an area they would send people out to see what others were paying. Once they got that info they would get what the average salary for that area was, they would then offer starting pay at or higher then that average. After 2007 a new CEO, who they imported from Target’s board, pushed through set pay scales based on what your job description was.

    As an example I know of a person that was 10 years out from being able to collect social security when they started work at Walmart in 1998 stocking shelves overnight. This person started at $8 an hr by 2005 this person was making $15 an hr basically still stocking shelves just on the day shift.

    So that whole meme that grew during the 90’s and up until 2007 that Walmart is nothing but minimum wage jobs was an invention of the Unions and competitors like Target.

    Now the reason Walmart did their pay scales that way? Simple. That allowed them to hire away already qualified people from the local competition. This saved them Training Costs and caused their competitors to spend more on training. Nothing like having your competitor hire someone for minimum wage, train them and then hire them away for a little more money. From the perspective of small mom and pop type stores this is what killed them: They couldn’t pay as much as Walmart and they couldn’t afford to keep rehiring people and train them just to have Walmart steal them away.

    Also Walmart doesn’t get loans they make them. You have to remember that Walmart has a financial arm just like GE and GM did/does. Matter of fact Walmart has been trying to get into banking:

    In the past year, Wal-Mart Stores Inc. has begun offering savings accounts and credit cards through its three-year-old Banco Walmart de Mexico Adelante franchise south of the border, where it aims to have 160 branches in place by the end of 2010. Those branches already accept deposits and originate auto loans and mortgages, among other things.

    This June, it opened Walmart Canada Bank-an operation that offers credit cards and has hinted at mortgage lending in the future.

    The Bentonville, Ark., retail giant also offers loans and insurance through its Asda subsidiary in the United Kingdom, where rival Tesco, the country’s biggest supermarket chain, already operates a healthy, wholly owned banking franchise.

    Here at home, the moves have not been quite so overt, but could hint at bigger things to come. Wal-Mart is opening its MoneyCenters, which offer such financial goodies as wire transfers, check-cashing and bill pay, at an accelerating clip. It expects to have them in about 40 percent of its nearly 3,000 SuperCenters by the end of 2010, with more on tap for next year.

    The company’s Sam’s Club subsidiary recently announced a pilot partnership with Superior Financial Group, a nonbank lender, to offer online loans of up to $25,000 to small-business owners at a 7.5 percent interest rate over 10 years.

    http://www.americanbanker.com/usb_issues/120_9/wal-mart-gets-serious-1023966-1.html

    On the Transportation side Walmart went with their own fleet that is not Teamster Unionized which is why they beat their competitors in that arena.

  34. gnomish says:

    e.m., if you wish to use the word monopoly to describe the natural fact of a person having exclusive control of himself (ownership), you certainly may, however the definition of a word is what makes it distinct from all other words. a definition is not useful if it does not limit a set.
    your abuse of the word makes it a synonym for ownership. i don’t know if you can see where that leads, but it renders the concept of ownership equivalent to assertion of forcible claim, not distinguished by right. while it may have no prima facie practical significance, it can be used to rationalize (the first step toward doing it) the anticoncept of state-ownership. once a person conceives of ‘da state’ as an entity with personhood, why he has to grant it all the same rights he possesses – and that equates a committee’s dictum with a person’s individual judgement.
    guess where that goes. and it gets there easily if nobody can argue logically against it.

    as far as the history of railroads, such as how vanderbilt and fisk send the aldermen of new york city home broke and became ‘the robber barons’…and the the history of american mining and coal – whose ‘predatory pricing’ basically created the petroleum industry – which had laws laid out to ‘regulate it’ before it actually represented a big part of overall fuel supply, you really need to dig into some details.
    read some of the actual anti-trust cases – thrill to judge learned hand (actual name) as he busts alcoa, forces them to give up patents and set up a competitor because, MOST EXPLICITLY- NOBODY COULD DO THE JOB CHEAPER. what a crime – they were charged with intent to monopolize, but if they contest it, they are liable for treble damages, so nobody does- the plead nolo contendere and bend over for justice or they go out of business.

    what your impressions may be once you have undertaken to examine the details proobably won’t much resemble what you have typed above. you tend to think.

    and i know not everyone can always do the mental gymnastics i do. when you can’t, it’s because your tools are unsuitable or the materials are wrong. it’s simple for me. that gets me a certain amount of ill will, for there are those who imagine their identity depends on more elaborate and complicated ‘solutions’. yet i feel no compulsion to return the enmity. yam watta yam.

  35. gnomish says:

    it’s a fallacy that any commodity has no replacement.
    that’s why virtually every person who has tried to ‘corner a market’ has gone broke.
    i’ll just say that a freakin balloon is cheaper than a mountaintop – but one has to think of that, i guess.

    buying mountaintops is a bit of a risk to do on speculation, but having bought one, is it right that the owner be told what he can do with it? is that what you are asserting, e.m.?
    it seems so, and it seems that you are asserting it on the basis of somebody else wanting to use it? that is an ethical inversion. those are contortions, not gymnastics.

    is there an unalienable right to cellphone service of which i am unaware? heh- this is a joke for those who have well trod this turf already. noobs prolly won’t get it.

    but you’re not gonna suck me into 20,000 words on that stuff…lol –

  36. gallopingcamel says:

    There are roughly 200 countries in the world so how can you tell which ones respect individual rights?

    For much of the 20th century there was no question that the USA was #1 with its institutions based on the quaint idea that government should serve the people rather that the people serve the government.

    The Heritage foundation has found a way to compare nations using what they call “The Index of Economic Freedom”. When private property is respected by the government, individual liberty is too. If a government has the power to control your property it may also be able to take your freedom or even your life.

    The Economic Freedom Index is published every year. The highest ranking is “FREE” and only seven countries achieved this status in recent years.

    The USA was ranked FREE since 1995 when the Index was created until last year when it dropped down to “MOSTLY FREE” status. The country that replaced the USA was Australia so those folks may be doing something right.

  37. David says:

    Dear E. M,

    Thank you for a fantastic post that goes to the heart of such matters and leads one to what could be supported as a priori understanding of some human actions. You have heard me say that progressives suffer from fundamental flaws in their understanding of human nature. This is, IMV, a result of being “results only” motivated, without consideration of the means of achieving those results. This lack of balance causes many errors resulting in a failure to consider the unintended consequences of certain actions and policy.

    The examples are endlesss, but I will offer a few recent examples. Both the “cash for clunkers” and the “first time homebuyer” programs had the goal of stimulating the sale of two depressed markets, automobiles and housing. Critics pointed out that this would succeed, but at a cost. It would rob demand from the future, stimulating those considering a house or a car, to accelerate their decision to buy now instead of later, and in this manner their would be a short term borrowing from the future, and once these programs ended, the markets would return to their depressed states, minus the buyers that would have existed if they had not already made their purchase.

    These warning have manifested as true in both markets. Currently both house and car sales are suffering a double dip, the tax payer now owes additional billions for these subsidies, and some who bought that may otherwise not have, now have less to spend on other areas of the economy due to greater debt load and monthly expenses on purchases they may not have made without the government programs. In summary the authors of the programs failed to consider the unintended consequences of their actions and the human psychology behind fundamental laws of economics. In essence, their only consideration was that they saw a need for jobs, and so took a short term, non nuanced view of how to directly produce the desired result. In this case they used a carrot, but in countless ways they are unafraid to use a stick.

    I would like to examine fundamental “progressive” misunderstandings on an a prior basis. My assertion is that progressives misunderstand the morality of power and self gain. To make a long post more interesting I will first start by challenging Lord Acton famous line, “Power corrupts, and absolute power corrupts absolutely“. It is my contention that this is incorrect, and the proper understanding of why that is so, reveals an “a priori” flaw in progressive thought. Thomas Jefferson understood the “always true” aspect of this understanding when he declared government to be a necessary evil”.

    The statement that “Power corrupts”, is fundamentally flawed. No reasonable person seeks to be powerless, to be a victim subject to the discretion of others; to have no control over there own lives and decisions. So others refine this saying, “The love of power corrupts” Yet this has the same problem. All love to feel empowered. Even the one who willfully submits to one in authority wishes to feel that it is both their choice, and that in that submission they will gain the power to attain some end, either personal or to some benefit of society. The one who of their own free will submits within a system does not mean he wishes to have no power or influence. All seek power, and in some ways all love power. A far better statement is that “Power reveals corruption” or alternatively, “love of power over the free will of others is corruption.” The “CORRUPTION” that power reveals, is the use of power to compel others against their will, the desire to exercise tyrannical control of other people to accomplish some objective. Almost all universal crimes are a manifestation of this moral failure. Murder, thievery of every kind, assault and battery, and so on, are all examples of a person or group compelling another person or group against their will, a form of tyranny.

    As our host Mr. E.M. Smith so cogently pointed out, almost all forms of socialistic government, “Soviet Russia, Maoist China, Nazi German, Fascist Italy, Castro’s Cuba and Peronist Argentina, and a long list of others”, being focused on their “elite” view of social needs and “equality”, ignore “ the “CORRUPTION” that power reveals, the use of power to compel others against their will, the tyrannical control of other people to accomplish some objective. Mr. Smith pointed out that this understanding is at least as old as the ancient Greeks. I like this quote from Plato, “This and no other is the root from which a tyrant springs; when he first appears he is a protector“ None of this is taught in school. My daughter’s pointed out the need for the protection of the individual from both the tyranny of the minority, and the majority. All her class mates asked her, “When did anyone need protection from the minority? What an astoundingly ignorant question for a group of 16 year old high school students!!

    Our second fundamental misunderstanding involves the “progressive” misunderstanding of selfish desire as “greed” and wrong. In “Science of Religion” Paramahansa Yogananda stated that there is an inescapable form of selfish desire in the actions of all men towards a specific goal which involves the removal of pain and suffering, and the attainment of lasting happiness. “Someone may say :I do not care anything about pleasure or happiness. I live life to accomplish something, to achieve success.” “Another says :I want to do good in the world, I do not care weather I am in pain or not.” But if you look into the minds of these people, you will find the same working toward the goal of happiness. Does the first man want a success that has in it’s achievement no pleasure or happiness? Does the second want to do good to others, yet himself get no happiness in doing it? Obviously not. They may not mind a thousand and one physical pains or mental sufferings inflicted by others, or arising out of situations incidental to the pursuit of success or the doing of good to others; but because the one finds great satisfaction in success, and the other intensely enjoys the happiness of doing good to others’ the former seeks success, and the ladder seeks others good, in spite of incidental troubles. Even the most altruistic motive and the sincerest intention of advancing the good of humanity, for its own sake, have sprung from the basic urge for a chastened personal happiness approaching bliss.”

    And so the desire for personal gain is neither immoral or avoidable, it is inherent within human nature. Max Weber is an example of a progressive who personified an absence of understanding of selfish desire. He considered that it was the “Protestant work ethic“, which, when fused with capitalism became corrupted by selfishness. The truth is somewhat different. Capitalism is in many respects fundamentally honest, and a reflection of Yogananda’s wisdom stated above. It is an admittance that personal gain is never absent, even in the most altruistic, and so capitalism makes no pretense of removing personal gain. It also makes no moral judgment of personal gain being necessarily bad. It is a neutral admittance that desire for personal gain exists, and cannot be legislated away.

    Social systems that vainly seek to legislate selflessness only condense the personal gain aspect into the most powerful people within the government, and in removing liberty and personal power from the common man, engender helplessness in the masses. Reducing the individual to a “Borg” like collective, they disenchant the individual and destroy the productive energy of a society.

    The Unites States recognition of the right to seek self gain, (capitalism) combined with the fact that we are a “republic” guaranteeing freedom from tyranny of other groups or from the tyranny of the majority, be that majority religious, political, corporate, or a combination thereof, is highly moral.

    The love of power for the purpose of subjugating others for one’s own end cannot be removed by any system. It just operates less effectively within a system built expressly for protection from such tyranny. The responsibility of the US form of government is to prevent the formation of such tyrannies: Corporate monopolies that unfairly drive out competition, lobby groups looking for special privileges, banking methods that rig the monetary system and allow leverage of assets tantamount to gambling, fractional reserve banking on steroids, government decisions making risk public but profit private, government sponsored enterprises that, under direct supervision of government regulators, do all of the above, are not caused by a capitalist / republic, but are a sick perversion of it caused by the love of power over others, and the lack of wisdom. It is the failure of the US government to police the above which is dereliction of their primary responsibility, the protection of individual freedom and power from the tyranny of those with group power.

    No form of government can be free from intrinsic ignorance, but the evaluation of all systems should be based on their ability to resist the corruptions power reveal. Since WWII the US has been the most powerful nation on this planet. Despite its flaws, the US has demonstrated a far greater resistance to exerting tyranny over others then any other nation, RELATIVE to the power possessed.

    Remember that if power reveals corruption, the US has passed this test far better then any other nation. Many on the left often repeat the mantra, “live and let live,“ but remain ignorant of the danger of the system they wish to implement which is inherently duplicit to this maxim. The US system is the best “live and let live” system, specifically due to its republic / capitalist system, and within any society but particularly a large non-homogenous society this has many advantages. The “let live” part is easily forgotten in socialism, and both the “let live” and the “live” part are discarded in the murderous tyranny of communism / fascism statist systems.

    Progressives misunderstand the morality of power and selfish gain, and extremely over rate “equality”.

  38. Pascvaks says:

    Don’t y’all just hate “words”? There’s too many of them. And folks just don’t know what they all mean. There otta’ be a law about “words”. Maybe more than one too. People are getting hung-up on them all the time. Communicating is the hardest thing in the world to do.

    ;-)

  39. David says:

    General complaints without specific reference is, generaly speaking, of no use.

  40. Pascvaks says:

    David

    Honest Injin.. wasn’t throwing a stone at you, your comments were not a target either. The “observation” I was making was very truly general to the whole discussion; and a few levels of magnitude beyond that. All of us are islands, all of us are a unique paradigm of our own devising (based on our unique chemistrys). What unites us, what seperates us, what makes life the most pleasent and most agrivating experience is a little thing called words. I think its fascinating. One day we may evolve to a level of pure and unfettered mental telepathy. Today, as in ages past, the biggest rocks in the stream of communication are usually “words”.

    Bet a penny, you only got 10% of what I was trying to say just now. Not because of anything ‘bad’ in you or me, but because of the words I used to say what I said and the words you heard me use. They aren’t pure or simple. They’re cointaminated with my experience and understanding and filtered by everyone who reads them with their experience and understanding; ergo, 10% ain’t too bad. No slam, I assure you; your take as good as mine anyday. Cheers!

  41. gallopingcamel says:

    David,
    You are so right about unintended consequences flowing out of actions by the people we empower to rule us.

    One of my favorite examples is the concept of “Rent Control” as instituted in New York by mayor Lindsay, a compassionate man who really wanted to help the poor. He was also a Republican doing things that we associate with Democrats just as Kennedy reduced taxes in a way usually associated with Republicans.

    Lindsay introduced “Rent Control” to New York and the consequences were horrible. My first visit to New York was in 1970 during the Attica prison riots; my hotel room was high in the Americana (later to become a Sheraton). From this excellent vantage point one could frequently see huge columns of smoke rising in the distance.

    Landlords around the boroughs could not make ends meet so they were either donating their apartment buildings to the city in lieu of taxes or hiring arsonists to burn them down. You might think that the city would have been able to rent out the buildings that had been given to them but most fell into disrepair to the point of being uninhabitable.

    Eventually things did get sorted out but rented property is still expensive in the major cities that have rent control such as New York, Chicago and London, UK.

    One of the unintended consequences is that people living in rent controlled apartments can’t afford to move even when the circumstances of their lives change dramatically. Thus you have my sister living on her own in London in a three bedroom apartment that would comfortably house a family but she can’t afford to move to a smaller apartment.

  42. Richard Ilfeld says:

    I’d worry more about Walmart,
    except:

    local stores —
    Montgomery Ward
    Sears
    JC Penny
    Walmart
    ??????[Amazon?]

    local Stores
    A&P
    Winn Dixie/Kroger/etc
    Walmart
    ????????

    There’s usually a potential competitor when a supplier can go
    vertical or demographics change or significant product substitution is possible.

    Happened with rail too, though the time frame was longer, and of course, the government perverse. Afte regulating rail freight as a monpoly, they had to regulate truck competition, lest it displace the ‘regulated’ monopoly already in place.

    Also re Walmart: there is great progressive distress at the loss of the ‘mom and pop’ stores (whom the progressives have NEVER done anything positive for). Anyone who has worked for a ‘family’ company and found promotion blocked by a dim-witted nephew may not think Walmart such an awful opportunity.

  43. gnomish says:

    at wuwt i just saw a great example of the contortions possible to be done by inversion of absolutes:
    “The supply available between 2013 and 2020, through existing projects, is seen as sufficient to fill that demand, leaving little incentive for project developers to invest further and create a future supply of emission reductions.”

    creating a future supply of reductions…lol
    someone should fill that guy full of holes before he goes on about derivatives and shorting future supplies of reductions…lol

    and yet- which among the readers of that contorted metaphysics has even felt a speedbump? heh- who is able to spot it as an anticoncept at all. we agile, gymnasts can do it easily.
    the ideas are corrupt because the words are not properly defined or used (in this case, it’s another inversion of an absolute).
    any opinion or conclusion produced with that algebra is hermetically unfalsifiable despite being self contradictory on a fundamental level.
    that means, if you abuse words, you abuse your ability to think; if you survive by thinking, you abuse your ability to survive; if you act to decrease your survival values you are a self harmer – darwin says.

  44. gnomish says:

    “The statement that “Power corrupts”, is fundamentally flawed. No reasonable person seeks to be powerless, to be a victim subject to the discretion of others”

    with ‘power’ defined as ‘the ability to force another person to do something’, the quote is logically sound and true.
    no reasonable person seeks power (to enslave)
    the choice is not to be master or slave.
    it’s not the only game in town.
    rights and the exercise thereof – it is distinct from and opposite to the exercise of power.

    easy.

  45. E.M.Smith says:

    @David:

    So true.

    IMHO, the Progressives are driven by emotional desire first, then to means, then to rationalization. Rarely does “reality mechanistics” intrude. Thus the frequent “Feels good until it crashes” results.

    Once you start looking for that, it’s pretty easy to see. (So, I want to feel good by “giving everyone home ownership” so I pass laws making money cheap and rules lax. Banks ‘third party the trash’ that results in an attempt to stay alive. Things eventually crash, as the folks who could not afford a home learn that. But it’s not MY fault for making a stupid law to promote what was not sustainable, it must be the bank’s fault… ) I would love to have the government simply removed from the economy. They think they can legislate the laws of economics, and they can’t.

    Economics is a field full of subtilties, often with inverted responses from what you would expect. So they regularly legislate “exactly wrong” things and the “fix” becomes the “faux pas”…

    Per “power”: The economics version of it would be more like “unbridled power corrupts”; as we are usually looking for a balance, a “countervailing power” to any other.

    To that extent, we’re more in line with your ideas that SOME power is good, and it’s too much, concentrated and unopposed, that’s the problem…

    @Boballab:

    I never said that the Walmart pay was BAD. Only that it was “lower” (and I was including total compensation, not just hourly pay, though I didn’t specifically say so). At no time did I say they paid “minimum wages only”. Just they could have a lower cost of labor, and they do. (If it would cost them less to have the union in, they would have done it long ago, but it costs more).

    So I don’t see us as being in disagreement. Walmart may well pay “average retail” or even “average retail plus a bit” and still have much lower costs than all the union grocery stores around them. And being as large as they are they can withstand the unions and maintain that competative edge over the union shops around them. And then put some of that advantage into lower costs to establish a local monopoly power via putting those other shops out of business. There is not, IMHO, anything at all wrong with that. It is a great business model (as evidenced by their winning…)

    Per:

    http://www.payscale.com/research/US/Job=Stock_Clerk%2c_Grocery_Store/Hourly_Rate

    Your stellar example of a guy starting at $8 and ending at $15 puts him just about at the same pay rate as Safeway and a bit under Kroeger… However… notice the REST of the statistics:

    The Kroger Company $7.18 – $15.37
    Publix Super Markets Inc $7.87 – $13.48
    Safeway, Inc. $7.44 – $15.10
    Wal-Mart Stores, Inc $7.31 – $12.82
    Food Lion Inc. $7.70 – $13.93

    So we have on average Walmart topping out a bit under those other Union shops and starting new guys out a bit cheaper than all but Kroger.

    I’d call $2 / hour a competative advantage.

    And they get to dodge all the Union benefits and Union Work Rules (than can be worth more than the lower wage costs…. as sometimes it requires you hire more total folks. Like the unions at Moscone Center where ONE job is to take stuff off your truck, a different job is to take it into the building, a third job is to carry it to your booth (you are NOT allowed to do these yourself, BTW) and a different job is to clean up any stuff dropped or broken in the process. At least, IIRC the last time I set up a trade show booth there. IIRC we had a total of 6 jobs from 4? trades to unload our booth from the vehicle and put it in our cube with power cables under the carpet to plug it in… Oh, and if your display took any actual tools to assemble, that was ANOTHER union… thus the growth of “push the button to unfold” self opening display devices / backgrounds…

    Please realize, I am not saying this is a bad thing only that the company can and does use it to advantage. I am not saying this is bad for the empolyees of Walmart. Walmart lets more folks move “up the ladder” faster and further than unions ever do (unions tend to ossification and stagnation) and I’d take a $7-12 in 5 years over a $7.50- $14 in a lifetime any day. The record of Walmart Store Managers starting as stock clerks is just a thing of beauty, IMHO.

    But “The facts just are”, and one of those is that Walmart gets a lower average pay cost from a faster advancement and non-union work rules shop. It can do this as IT is the one setting it’s pay scales, not the Union.

    There isn’t any doubt about that behaviour, or the results, and that’s why the Unions are out to get them. Because MOST retail in an area is NOT Union and so if Walmart out-pays Joes Shoe Store but underpays Safeway it is still a threat to the union (who want their own local monopoly on grocery store clerks…)

    That a company makes loans does not mean it has no debt. In fact, banks exist by taking on massive debt and then lending it out at slightly higher rates. WMT Debt:Equity ratio is currently 0.66 per:

    http://ycharts.com/companies/WMT/debt_equity_ratio

    So it has about 2/3 the amount of debt as the equity value of the company…. That it is large means it can get that debt more cheaply, then do things with it like lend it out at a higher rate and make money on the spread. Walmart DOES have debt, and Walmart DOES use that lower cost of debt to great advantage.

    While the non-Union transport helps, the major advantage they have is the gross efficiency in buying and distribution that gives them. They can just crush the costs of, for example, pancake mix; in negotiations they say “we will buy 100,000,000 cases delivered via rail to our distribution facility so your costs of marketing and shipping are nearly zero. We want the cost cut by that much.” And get it.

    Then, ONLY what each store needs is loaded on trucks to THAT store. They don’t have a truck making a run to deliver 1/2 pallet of pancake mix, and then another 1/2 pallet to the Safeway down the street, then driving 20 miles to unload ANOTHER 1/2 pallet, then spending a night in the hotel, then…. It is just incredibly efficient to have Just In Time delivery of Just What’s Needed and with the truck showing up in one run to one place (or sometimes a couple of closely located ones).

    Frankly, the logistics of it is a marvel and is widely touted as a way to gain economies of scale (that lend to the process of creation of monopoly power… which, BTW, I do not see as “evil”, it is THE most common goal of substantially all business. To somehow get product differentiation to gain just a touch of that “monopoly pricing power” even if only via branding or lower costs.)

    It is much more than just non-union drivers. It has also lead to a host of folks trying to emulate it…

    @gnomish:

    In terms of economics and business, there are specific meanings and terms of art to:

    Monopoly
    Monopolist
    Monopoly Pricing Power
    Local Monopoly
    Partial Monopoly
    Effective Monopoly
    etc.

    Rarely do they fit the popular notion of a Single Owns Everying Evil Monster. So yes, your ownerhips of yourself is a “local monopoly of you by you”. To the extent that government enact laws to say, for example, that you must pee in a cup on demand or let them take blood against your will, they are attempting to make you into a “commodity” and not have your self ownership monopoly. The limit case of that is the slave, who has no self-ownerhip at all, as the Monopsonist of the plantation has taken all of him … In the “free world” we are more or less 1/2 way between the Personal Monopoly of freedom and the Personal Slavery of , well, slavery…

    BTW, I don’t agree at all that the recognition of a state as a ‘synthetic person’ must give it all the same rights as an individual. Corporation are not “natural persons” but are “legal persons” so can not vote, for example. The distinction can be made as broad or narrow as you like for “non-natural persons”. They even have differential freedom of speech, for example. A company can not say “tobacco is good for you” if they sell that product. I can. (It is an antihelminthic for one thing). But a company, even as an un-natural person, can not say “Tobacco cures worms” and “Tobacco is good for you” without clearance from the FDA… So while you are correct that the two can be linked, you are very incorrect that they are leading to treating the two as “the same”. Your binary blinders are binding again…

    Per my needing to learn more about the details of the monopoly cases: Pauleeze… I’ve had months of it in class. It was required in more than one of my Econ classes. No, it was not a biased presentation. As an economist you never know if you will be hired by industry or by the government so you must learn to argue both sides… I’ve had more time spent studing monopoly power and monopoly practices than I care to think about.

    One example? That law does not forbid BEING a monopolist, the law forbids BEHAVING like a monopolist. So if Alcoa has a patent that lets them become a monopoly BUT does not use such things as predatory pricing practices, it can go ahead and be a monopoly. BUT, if you are one of 4 oil companies in a town (even if the smallest one) and you use predatory pricing to gain a local monopoly, you can be sued for “monopoly practices”.

    Yes, this matters. A lot.

    BTW, at no time have I asserted that Monopoly Power is EVIL or that there is No Alternative. I’m just describing the methods by which one gains it. (And perhaps a bit of how to use it without getting killed…) Economists rairly concern themselves with right and wrong; good and bad… After all, I might get hired by Exxon to make the case FOR them… or the Govt to make the case AGAINST…

    While it pains me to say it, we are rather like lawyers in that way…

    So yes, someone COULD try putting a blimp up to deliver cell phone service (and, in fact, I’ve pondered that quite a bit and even sketched out a design for a ‘blimp antenna truck’ for use after disasters. Immagine if after Katrina the First Responders had a moble Cell Truck and had put a blimp on a tether up?). But that does not break the monopoly power. The monopolist will retain their lower cost base, higher reliability, and ADVANTAGE. Then, if they use that to undercut your balloon with predatory pricing, they step beyond the law. If they simply price at a fair profit and you can’t cut it, well, not a problem… and as their “natural advantages” will let them do just that, they will be (and are in fact) local monopolies. (And hire some number of lawyers and economists to make sure they stay out of the “monopoly PRACTICES” bucket… and court).

    The presence of a theortetical alternative does not alter the existence of a FUNCTIONAL MONOPOLY or even of the existence of a NATURAL MONOPOLY or even if they can or can not be sued for MONOPOLY PRACTICES. (each of the capitalized bits is a term of art with specific meanings…)

    Per the “rightness” of telling the owner of the mountain top what they can, or can not, do: I make no claim. That’s for the clergy and lawyers to fight over…

    (My personal opinion would be “hey, it’s THEIR mountain”. But my personal opinion is worthless in terms of legal and economic judgements. If they use that ownership to harm others, well, “that’s an issue”…)

    As a ‘thought excercise’: What commodity can replace cobalt in B-12?

    Are you SURE there is always an alternative / substitute?

    What can replace phosphorus in fertilizer?

    Bone in “bone china”? (Yes, you can make OTHER kinds of china, but not “bone china”… which has very unique properties)

    There are also highly selective catalysts that have only one choice. And the anti-biotic properties of silver are unique, as near as can be determined.

    While I agree that there are almost always “substitutes” for some uses, and in enough quantity to impact prices: It is absolutely not true that there is ALWAYS a substitute for all uses…

    Try having a Shakespeare festival without the works of The Bard… or making tires that are half way decent with zero “natural rubber” in them. It can be done (barely) but the costs are very high and the products not so good…

    Or just look at world oil consumption graphs despite all the (un-economic… btw) “alternatives” around. Oil can easily demand MONOPOLY PRICES as it is a FUNCTIONAL MONOPOLY on motor fuel at all prices up to about $100 / bbl. Thus the OPEC Cartel to assure they get it…

  46. E.M.Smith says:

    @xyzlatin:

    Un, I think Spain and Greece both tossed out a Muslim government / theocracy at one time or another. Yes, it took a certain amount of warfare, but it has been done. Islam is not invulnerable…

    @Richard Ilfeld:

    Again, I never said Walmart was BAD. It is just to illustrate the mechanism by which one gains Monoposony power over vendors. As per the local Monopoly Power they can exert (note: That does not mean they ARE a monopoly or that they can achieve “monopoly pricing” or even that they have a functional monopoly: it only means that they can do some of the things a monopolist could do, like price the competition out of business… and even THAT is not illegal “monopoly practices” as they would need to sell goods for below costs to be “unfair”…) they have sufficient monopoly power to drive the competition under.

    So a Walmart (small one) came in. A large Alberson’s closed. A second Walmart came in (larger, but further away) and the local PW Supermarket closed two outlets near me. That’s 3 stored closed inside a 1 mile radius that I know of. I used to shop at all three of them. I now shop at Walmart. I get much better “deals” at Walmart, though I must drive further and the variety of selection is significantly lower…

    Is that good or bad? Yes…

  47. Stephen Wilde says:

    “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.
    Alexis de Tocqueville”

    That is the revelation for me.

    I have been aware of the developing decadence of our democracies for some time but believing in the system as I do I have been waiting for the voters to elect individuals who can pull us back from the brink.

    In the UK Thatcher was one such and at one point it was thought that she had succeeded.

    But she never gained control of the public sector so in fact she failed and with the recent financial crisis and the low possibility that it can be resolved without severe pain I fear that the end point is coming when our representative systems of government will be replaced by something less benign.

    I didn’t previously know that the critical issue had been identified and predicted so long ago.

  48. boballab says:

    EM:

    Sigh. You use comparison from 2011 to compare to the practice that Walmart used prior to 2007. Remember I did state very clearly that after 2007 the CEO they brought in from Target changed the way Walmart does it’s payscale.

    Under the rules they used to get to the top there was no set starting salary for any position in the store: You negotiated it. Yes some people started lower but OTOH others started higher (example I started at $8.50/hr unloading trucks and within a year was in management). Also Walmart is self insured for Healthcare which most other business are not. We were stealing employees from Food Lion (unionized) because not only were we paying better but offered better benefits then they did.

    After 2007 they changed all that setting a starting salary for each position in the store. What you linked to was a comparison of what Walmart does now trying to stay on top, not what they did to get there. What got them to the top was paying better wages and bene’s then the Union guys and thus getting better workers. They started turning away from the policies of Sam Walton a long time ago, so comparing the policies of Walmart today to what made them Walmart is an Apple to Orange comparison because they are not the same (and one reason Walmart has been losing market share in the last 5 years).

    Also your example about the Transportation of Walmart products is way incomplete. Remember I worked there, I dealt with who brought what and where it came from. Only a part of the products that is in a Walmart come on a dedicated truck just for that store. There is also the McLanes trucks that brings the Stores their Candy and Cigarette shipments (until a few years ago McLanes was another division of Walmart Inc the umbrella corp that owns Walmart Stores, Walmart Financial and other companies). These trucks follow a route and they stop at multiple locations and not just Walmart stores. Example for the store I worked in the McLanes truck that came to our store also stopped at the local Food Lion, SuperFresh and 7-Eleven stores. lets not forget the vendor trucks such as Coke, Pepsi, Lays and more follow routes and deliver more then just to that one Walmart.

    To put something in perspective each area in a store has a different department number. For products such as Soda, Chips and other snack foods that is Dept. 95. My Store was a Div 1 store (Means it wasn’t a Supercenter) and during the summer months this Stores Dept 95 was ranked #1 in the entire Walmart Store Chain. We sold more Soda and Water then anyone else in the company and even we did not get dedicated deliveries of Soda from Coke, Pepsi and Seven UP.

    Trust me what people see from the outside about Walmart distribution and Transportation is not what is really going on.

  49. E.M.Smith says:

    Boballab:

    Please accept that I’m NOT throwing rocks… I’m just showing where data are. From 2006 and 2004:

    http://www.earthtimes.org/articles/news/8011.html

    Posted : Tue, 08 Aug 2006 10:52:00 GMT

    NEW YORK: Wal-Mart Stores Inc., accused of paying low salaries to its employees, announced it is increasing the starting pay scales at 1,200 of its 3,900 U.S. stores.

    The world’s largest retailer said it is also raising pay levels related to performance and customer service adding henceforth starting rates and pay ranges will be reviewed yearly and will be in line with market changes. There will also be paycaps at various levels, which is meant to motivate the staff to move up in their careers.

    The idea behind this decision is to have a more consistent and competitive pay program and to encourage associates to build their skills and qualify themselves for better jobs, a spokesperson for the company said.

    On an average, there will be about 6 per cent increase in starting pay, he said.


    Wal-Mart says it pays its full-time employees an average of $10.11 an hour. This can be compared with a high of $17 paid by Costco Wholesale Corp.
    Several labor and religious groups have been criticizing the company for its wage and benefit policies. Recently, a study by an economic policy institute indicated that the firm can considerably improve wages and benefits to its employees even without raising prices and still earning substantial profit.

    So the net effect was to RAISE pay (per what I can find from 2006 / 2007).

    Using the 2011 data was not intended as a comparison with 2007, only to show that Walmart DOES in fact have a “pay disparity” vs the competition.

    It does. That is a good thing. It makes more profit.

    Notice that at no time does that mean that the employees are being screwed(!). THAT is where the union hystrionics goes off the rails. Walmart promotes faster, and moves folks to more PERSONAL pay faster. That is better for the employee than an extra 25 cents / hour they could make at Safeway… at any given step.

    Per distribution:

    Yes, some particular vendors do direct delivery of product. All that is negotiable (and is heavily negotiated…). So Walmart says “I’ll pay 80% and we do the delivery or 85% and you do the delivery.” It is STILL less than the 100% the other guys are paying whichever way the vendor “chooses”. In the case of soda pop, the high mass and low value of water makes shipping to the central distribution point first less attractive. That few bottlers have a rail hub also hurts.

    Yes, I didn’t give an absolutely complete all details in blow by blow description of how every invoice is handled… That was not the point.

    The point is that the highly efficient mass distribution system gives them monopsony power (i.e. limited from an absolute monopsony but with SOME power) over their vendors, which they exploit. So negotiating with, say, the Sacramento Pepsi Bottler if they balk, I can say “No Problem, I’ll just buy Pepsi in Arkansas and ship it…” until compliance is satisfactory.

    And that is a good thing for everyone.

    Stockholders make capital gains.
    Employees get jobs with a future.
    The company gets a profit.
    The vendor gets a profit (and economies of scale from that large order size).
    The customer gets lower prices.

    The only one to lose is the local grocer buying small lots at higher prices with higher shipping costs (due to smaller lots).

    Same wage story from another source:

    http://wmt.bloggingstocks.com/2006/08/07/the-wal-mart-wage-has-new-min-and-max/

    Posted Aug 7th 2006

    Wal-Mart employs nearly as many people as the U.S. government, and its 1.3 million “associates” are so often the source of pity to the nation’s economists. They make so little, it’s said, they often can’t afford to shop in their own low-priced employer’s stores.

    That makes news that starting pay will rise at about a third of Wal-Mart’s U.S. stores, big. Wal-Mart says the range of starting hourly wages will increase an average of 6%
    but gave no details such as example starting pay. Additionally, the retail chain is instituting new wage caps on each type of job.

    Interestingly, the Wal-Mart spokesperson responsible for this news spun the caps as a positive (paraphrase thanks to the AP): “the wage caps give current associates an incentive to move up to higher positions if they want to make more money.”

    I can find dozens more…

    http://www.businessweek.com/magazine/content/04_24/b3887045_mz011.htm

    JUNE 14, 2004

    According to some Wal-Mart workers, as well as union organizers and a lawyer who have talked to Wal-Mart workers in different parts of the country, big adjustments are coming. The changes they describe could mean raises for newer workers but penalties for higher-paid veterans. They could also limit the discretion of front-line managers to make decisions about pay rates and merit raises, a move that could help Wal-Mart battle charges of sexual discrimination. “Obviously they [Wal-Mart] have a bad reputation in terms of pay for the rank and file, and they need to improve that,” says retail analyst Robert F. Buchanan at A.G. Edwards & Sons Inc.

    Wal-Mart refuses to discuss or even acknowledge the new pay plan, which workers say they’ve been told will show up in paychecks starting in June. In explaining the change, Kathleen MacDonald, a 14-year Wal-Mart veteran at a supercenter in Aiken, S.C., says her bosses alluded to the bad publicity over Wal-Mart’s pay and negative comments from politicians. Some managers have also told workers that the changes were a response to the massive sex-discrimination case filed three years ago against Wal-Mart, says Joseph M. Sellers, a lawyer for the plaintiffs in that suit. Workers have reported raises ranging from 8 cents an hour to $3 an hour under the new plan, he adds.

    According to MacDonald and others, the new plan — whose details remain sketchy — divides workers into seven classes, at least in the supercenters. Starting wages would be clearly defined, as would progress from class to class. While Wal-Mart’s pay system has some similar features now, those familiar with it say it has been loosely followed, with managers having wide discretion.

    Under the plan, workers have been told, no one’s pay would be reduced. But labor activists are fretting all the same. United Food & Commercial Workers organizer Stan Fortune says the new system, described to him by numerous workers, would include a pay cap for each class — a possible disadvantage for longtime associates, as Wal-Mart calls its 1.2 million U.S. workers. And merit raises would be limited to about 5% of store employees.

    What’s more, workers say, annual raises would be set at a flat rate, not a percentage of salary. That would be another blow to veterans. Those with a “standard” annual evaluation would get 40 cents more an hour. Those “above standard” would get 55 cents. Wal-Mart says its current full-time hourly workers average $9.64 an hour in its discount stores and supercenters. The old system usually gave even higher-paid workers at least a 4% raise. “If you’re making double digits, this hurts you,” says sales clerk MacDonald, who now earns $11.03 an hour. She doesn’t yet know how she will fare.

    None of the numbers I’ve found are at all out of line with the descriptions I’ve regularly seen in the financial press over the years. Walmart paid a bit less in total wages and benefits, but associates could move up fast to better pay. (As described above in the description of what was being ended in the “new” system). All the way to store manager, if that was what they could achieve.

    And I see nothing wrong with that. It is how I lived most of my employment life, starting at 25 cents an hour washing dishes in my folks restaurant. It is how thing usually function in a meritocracy with ‘promote from within’.

    So if wages were RAISED from the prior levels into the new system, and the new system still has economic lower costs of wages to the company, I’m still seeing it as having been and continuing to be an economic advantage to the company. And that is a good thing. That enabled the rapid growth that enabled all the employees to move up fast to better pay quicker.

    Why you are defensive about that is almost as opaque to me as why the “outsiders” wanted to paint it as evil…

    It is NOT the case that this means worker exploitation at all.

    BTW, for any individual competitor, the wage disparity was not all that great, so you might well find Walmart able to hire folks from a competitor “for higher pay”. It’s the national agregates I’m talking about.

    For decades Walmart has been the low cost producer, and they continue to be, based on monopsony power. (I.e. not Monopoly power, they don’t drive prices up nor do the predatory price below cost. But they DO use their “clout” to keep input costs lower. and that is a good thing even for the employees who get faster job GROWTH opportunities as a result.)

    Please please please make a distinction between a corporate average low wage cost basis and the individual benefit in that job. The benefit is only partly the starting hourly pay rate. Simply having work rules that let you have a higher percentage of folks on the lower end of the cost spectrum can give a corporate average advantage. More “span of control” at each management level. As a hypothetical: Having a junior butcher who can work unsupervised for half of the shift instead of needing a Supervisor Senior Butcher can get overall costs down, even if THAT junior butcher is being paid at parity to Food Lion… If he then can get “journeyman” faster as he has “already worked unsupervised” that is a tremendous advantage; even if he had been paid below parity to start…

    Part of the Magic of Walmart is that it keeps average wages relatively low, while having each employee advance and make “good money” relative to their prior career path.

    It is something to be admired, not vilified. From either side…

  50. gnomish says:

    oh, yah- i did econ, too. and a good friend has worked for all of the biggies – usually some merger or bankruptcy happens shortly after he signs on… deloitte touche became touche-ross, global crossings cashed out, or something like that – it was a while ago and not really that engaging…

    and while we were in college we remarked on the fantastical neologisms and what were their purpose.
    price inflation, wage inflation – even while we read alan greenspan clearly stating: “there is only one kind of inflation- the printing of currency – and it’s the way the state can pick everybody’s pocket with not one man in a million able to say how it was done”
    my wonder, at the time, was if alan would go monetarist the way of keynes and m…can’t remember- upon realizing his only realistic employment was by the state, would he flip. heh… he sort of flipped out, i think…

    so many times i watched him speaking purest econ mumbo jumbo to congress…lol

    i’m also familiar with the ones you mentioned-
    local monopoly, partial monopoly, functional monopoly. I can translate them into something rational sometimes if i understand enough about the person using them, but ontologically they belong with local pregnancy, partial pregnancy and effective pregnancy.

    so, one can certainly argue that my black/white comprehension of the issue is not- nuanced. yet my failure to grant validity to these fictional entities is not a symptom of lack of familiarity or understanding. it is because i have seen enough of them to understand the nature of them – i see reality is not a fiction.

    i yield the point you make with the example of catalysts, for example, that there may be only one entity that answers for specific purpose in some context defined narrowly enough.

    to abstract something to that degree, you will find, requires dropping most of the context of reality that is the superset, for instance, in the case of a vitamin, the larger context includes the nature of the sources from which it might be acquired. the context of reality requires more than a theoretical abstraction to own all the sources. or if it’s a catalyst – it requires ownership of all the mines, if that’s the only source.
    the context of reality from which that abstraction is stripped requires consideration of the individuals who actually produce the commodity – it’s not like some guy sits at a desk and clicks a mouse to change a pile of dirt to an ingot. being as how that is, in reality, a requisite of the production – upon which your premise may just depend, the proposition has been constrained so narrowly as to be impossible of use. usually that’s the point and why the same examples turn up in these arguments – they are functions where the logic is inadequate and/or incomplete – that’s what goedel was talkin about.

    goedel’s theorem has become a meme twisted in the same way as the canute story, by glod!
    here’s how to use it properly:
    when you find a problem that doesn’t submit to the internal logic – enlarge the context, jeez.
    it’s simple.

    if i assert that ‘everybody has a right to eat’, would you be able to dispute that rationally?
    well, it can be done – because the nature of that question is: it’s a trick.
    it’s a trick because it drops all context – it does not address reality in the slightest. it is abstraction at the expense of truth. it has as its purpose evading truth – truth such as the ineluctably reality-based one ‘at whose expense’?
    and when you start asking real questions, outside of the little corral designed to constrain reason to impotence, you find you are no longer trapped.

    we figured this one out after all the ‘life boat ethic’ puzzles that are used to force you into ‘choosing evil’.
    that’s what the type of argument is about. it’s not about reasoning, it’s about preventing it.

    the theme of my comments has been that ‘fictions’ are metaphysical models which robustly fail. gigo would suffice to explain it, but in fact, it’s equally important to understand, as did orwell, that much of it is contrived.
    and even more important is to understand that it is contrived for a specific purpose, the nature of which is vitally important to understand for self defense.
    in order to reason well, one must have proper tools. the tools we use are labels for entities. it those entites are fictions, we are casting spells.

    the process of debasing a concept usually begins by adding qualifiers, for example, the concept of reality may be attacked by introducing ‘your reality’, which is to present a belief in multiple realities.
    this has been done assiduously with the concept of rights. there are individual rights and no other because the concept presupposes the individual.
    so, to attack the concept, let us introduce ‘worker’s rights’ and when that does its work well enough, let’s introduce ‘taxi driver’s rights’
    and then we have no useful concept of rights and there will be no logical manipulation of the illogical (anti)concepts – but that’s the idea behind them.

  51. gnomish says:

    oh yah- one of the major agendas of the marxist economists is to debase the notion of ownership, we know, and also to debase what is made possible by ownership, free trade.

    the approach may derive from a feudal view of economics as a zero sum game, which of course it has definitely not been since the industrial revolution, in which context the accumulation of wealth necessarily required deprivation of someone else – but whether it sprang from the same vine as luddism or not, they have been very successful.

    they have equated ‘the voluntary exchange of values’ with theft – the old property is theft meme updated with brand new terms and more hawafeena!
    they have equated the reward of productivity- one of the absolute values of human nature, of course, with ‘power’, which comes from a gun.

    terms such as ‘robber baron’, ‘predatory pricing’, ‘exploitation’…
    these are not terms of the science of economics. they are propaganda. they are not used for reasoning and can not be used for reasoning.
    they’re good for the job they were designed for, though.

    you can kiss the nearest sootiest smokestack for the decades of easy life made possible for you by seriously productive guys through no effort of your own. but you don’t call them altruists for their gift, you damn them at every opportunity. as if any businessman ever pointed a gun at you and forced you to buy.
    and the ones that do have the guns – you quibble about just how, not whether, you shall play slaves&masters.
    so i see what these exploits ultimately mean to me.

  52. gnomish says:

    when you see a guy successfully evade predation, do you say to yourself – gee, i wish i could do that too! or do you say – he’s stealing from society by not paying his share?

    it’s like the question ‘martyr or murder?’ and reveals much that is important to know to live in an unfree world.

    it’s important to make these observations, though a generation is lost for sure and nothing is expected to change in my lifetime, so that in some future there can be ‘founding fathers’ who may start out on a better footing. perhaps that’s mere optimism.
    there’s no hope of that until reason is common. that can’t happen until individuals each know how.
    reason is our chief means of survival. to permit its corruption is to lose it. functions based on fictional entites can produce anything you want – and with infinite degrees of freedom, flying elephants are a snap.

    what if you accepted as the premise that self employment is the natural state of a full-fledged man by virtue of him being responsible for the care of what he owns, namely himself? who would be exploiting whom then?
    what if the only possible anybody who could ‘owe him a job’ is his own self? is that gymnastics or is it just basic reality?

    …must… stop…. ima go do some electronics for a while…

  53. Jeff Alberts says:

    “we agile, gymnasts can do it easily.”

    Yet you can’t figure out proper capitalization. ;)

  54. boballab says:

    EM:

    I guess I will have to give it to you laid out in a straight fashion since you will not find this in any article out there. You linked to how they said they will be raising starting pay after X year, what they didn’t tell you was how that was actually done and the consequences from that.

    Prior to the restructuring there was no set Payscale period. No set starting pay, no set amount of raise you could get in a year and no Maximum you could make in any given position.

    What a person made was completely independent of the position he was in. Starting pay was negotiated, there was no “Well here how much we pay for a cashier”. When you applied for a job at a Walmart and took the interview, if you were offered a position the first thing they asked you after that was: “How much do you think you should get paid?” From that starting point you negotiated your starting pay with management. From there you got raises based not just on how long you been there but on Merit and Incentive. Yes there was a yearly eval that determined what type of raise you got but if you did poorly but not bad enough to get fired, you got no raise and if you were just average you got a small one. As it should be clear to see it was almost entirely 100% merit based pay.

    You would find a person starting at a walmart for $7/hr cleaning toilets that they negotiated for and another person starting at $8/hr for the same position in the same store. After that if they did really good work they could get a merit raise. There was incentive raises handed out by Store and District managers all the time and it was real easy to go from your starting pay to making $3 to $4 and hour more in just a few years.

    Now after the new policy they classified all positions in one of 7 payscale positions. Example a stocker was a level 2 position a regular department manager was a level 6 position and a few department managers that had things like remote registers or service requirements were level 7.

    Along with that there was a starting salary for that position and MAXIMUM salary that could be made in that position. Also all Merit and Incentive raises were done away with and the yearly raises were cut in half. Oh they made it easier to get that yearly eval raise, they just made it so that basically if you were still there one year later you got a few pennies more per hr. You know Union style pay raises based on Seniority and not Merit.

    Then a year later they redefined a lot of the positions. They did away with all the level 6 Department manger positions and renamed the level 7 ones as “Zone Managers”. So basically the all the old level 6 department managers got thrown back into the level 3 Day stocker position, which also has a lower maximum that you can make. This also by some form of accident meant that almost all of these old department managers will never see another raise if they stay with the company because they already maxed the level 3 pay level out. As to the Level 7’s they didn’t make any more but just had their workload tripled.

    Now does that sound intelligent? Do you think they are keeping their experience people?

    All they did was just about hand the keys to the stores to the Unions. They made payscales that match exactly what the Unions accused them of back when they had no set payscale. What you linked to is the PR spin they handed out and now here in 2011 the chickens are starting to come home to roost.

    Remember I worked in management for Walmart, I sat in on every training session for managers on Walmart’s CCTV. I knew the changes in policy months before wall street and those that cover it did. Hell I still know what is coming in Walmart before wall street does because I got friends still in management that tell me. Linking to articles by people that haven’t spent 1 hr behind the scenes in Walmart is not going to work in this, because they only report what they are being told by Bentonville.

    I am not saying you are throwing rocks but that you started off with a false premise with how Walmart became the biggest retailer in the world. The policies have changed from what got them to the top and they have not been changes for the better. Examples: Do you remember the whole upscale fashion fiasco that Walmart went trough years ago:

    Wal-Mart Stores Inc. cannot seem to find the right fit when it comes to selling clothing.

    By quietly ousting its U.S. division apparel chief last week, the world’s largest retailer acknowledged that its clothing strategy has been a dud. Again.

    Over the past decade, Wal-Mart has veered from one approach to clothing to another. The discount giant has even tried to emulate rival Target Corp. by stocking its own lines of trendy outfits. At other times the Bentonville, Ark., retailer has placed its bets on bulk packs of everyday wear, like tube socks and T-shirts.

    http://online.wsj.com/article/SB10001424052748704895004575395501406606766.html

    Every single one of those changes before they went into effect was put before the managers in the stores and every single time the feedback from the stores was:”Won’t work, your just wasting money”. Well they went ahead anyway and when they did those changes Wall Street Ohhed and Ahhed about how it was such a great move.

    From 2006:

    WHAT may turn out to have been the most significant runway show to be staged during the latest edition of Fashion Week had no celebrity front row, was created mostly by anonymous designers, generated little industry buzz and took place on a rooftop above Times Square before the official Olympus Fashion Week had even begun.

    Defying the convention of showing next year’s clothing now, Wal-Mart’s Rock the Runway event on Thursday presented 27 outfits appropriate to the current season and with a top retail price of $98.94, for a leather jacket.

    http://www.nytimes.com/2006/09/10/fashion/10DIARY.html

    From 2005:

    NEW YORK — Wal-Mart Stores (WMT) announced Thursday the rollout of what it calls an “urban” fashion line called Metro 7.

    SNIP

    The retailer is wise to look to its customers for a bigger piece of the $45 billion a year women spend on fashion apparel, says Marshal Cohen, a retail expert at NPD Group. “Wal-Mart has finally learned that they are not going to get new people to come (for fashion), but they can convert the ones that are already shopping.”

    http://www.usatoday.com/money/industries/retail/2005-10-06-wal-mart-usat_x.htm

    Those were just two of the times the people inside Walmart knew they had a fiasco in the making while those outside thought it was a good idea.

    Here is another example:

    Four years ago it was decided to get rid of the display’s in the middle of the aisles. Feature merchandise would only be allowed on endcaps. This they said was to make more room in the main aisle’s because that is what customers wanted. When this was told to us back in 2007 again the ones in the stores told them it wouldn’t work, sales would fall and that what they were hearing was the complaints of the minority not the silence of the majority.

    What happened they spent millions removing the redstripe blocks that used to outline the main aisles, they lowered shelves thus reducing the amount of merchandise they could carry, they phased out the stack base displays and replaced them with a few larger end caps that jutted out into the main aisles. They also shifted aisles all over the place in some stores (most notably in supercenters) that made the main aisles wider while at the same time this reduced the number of side aisles again reducing the amount of merchandise they could carry. This resulted in them having to cut thousands of products out of the stores.

    The result?: falling sales, three times the amount of complaints about the missing stack bases and that doesn’t even count the ones about the products no longer carried or about how the amount “shelf outs” went up. By Christmas of last year that whole program was abandoned and the stack base displays were back, except in the end the main aisles now have less space in them then when they started. You see those extra large end caps are still there sticking out into the aisles. That is what Walmart got for a $500 million dollar idea.

    The retrenchment comes only eight months after Mr. Fleming told analysts that the program to clear aisles of merchandise displays had worked so well in� “Impact” stores that it would be extended to all stores, and less than a month after Mr. Castro-Wright chided critics in a June session at the company’s shareholders meeting, saying that while the retailer had suffered some “self-inflicted wounds,” stores “don’t have to look bad” to be consistent with the Walmart brand.

    The removal of the displays has been among the factors that most irritated many suppliers who lost in-store marketing opportunities or had to pay more for the remaining ones as a result.�

    One person close to the company, noting a big display of watermelons next to little-girls’ dresses in Bentonville area stores, said, “I think Sam [Walton] would be smiling about that.” He wasn’t so sure, though, how Mr. Sam would have reacted to the idea, attributed to Mr. Fleming, “of removing 15% of the inventory from the stores because surveys show consumers see it as improving the experience.”

    He likened Walmart’s move to become more like Target to Coke changing its formula to be more like Pepsi after the Pepsi Challenge taste tests of the 1980s. “A lot of people did like Pepsi — and those were mostly Pepsi drinkers,” he said. Blind taste tests aside, there were always a lot more Coke drinkers in the U.S., and changing the formula alienated them until Coke offered the old one again.

    In similar fashion, Mr. Fleming led a drive to make Walmart look more like Target, a move that played well in consumer experience surveys but didn’t necessarily translate into increased sales for the retailer, which has had four consecutive quarters of declining U.S. same-store sales even as competitors from Target to dollar stores saw improving results.

    The detachment of the current Walmart management team from the retailer’s roots has been a recurrent theme among some supplier executives, some of whom knew Sam Walton themselves — although most of Walmart’s current leaders didn’t.

    http://adage.com/article/news/walmart-makes-impact-beefs-assortment/144883/

    CUSTOMER SURVEYS PUT UNCLUTTERED LOOK IN REARVIEW MIRROR
    Walmart brings back ‘Action alley’

    It’s easy to say now, but Walmart was never really about wide-open spaces within its big boxes.

    The mega-retailer briefly flirted with it – uncluttering its wide aisles by ditching those palettes stacked with discount stuff. A Marana supercenter was one of the first Walmarts in the country to get the new, cleaner look.

    Shoppers could wheel their carts around without obstruction. There was no getting caught on the corners of palettes, and there were fewer traffic jams at the place where electronics and office supplies meet.

    But it was never really the Walmart brand we’ve come to know – and it apparently hurt sales.

    It took a year or so, but the world’s largest retailer has looked in the mirror and acknowledged this. The “Action Alley” is back – a trail of discounted items in the aisles that can be followed across a Walmart from one end to the other, from groceries to TVs. It’s not quite the Yellow Brick Road, but a customer could follow the Alley to some pretty good deals.

    Back in the spring of 2009, Walmart brightened its brand. It put up new signs, lowered shelves and ditched the Action Alley, among other changes. The Walmart Supercenter in Marana, 8020 N. Cortaro Road, was one of the first to get the makeover.

    http://azstarnet.com/business/local/article_5074f903-9bfe-55a1-94ef-5d2538d6bf3c.html

    Matter of fact even the MSM picked up on that periphery:

    Wal-Mart Stores Inc. (WMT), the world’s largest retailer, is restoring 8,500 products to store shelves to help reverse a sales slump in the U.S.
    Stores will add 11 percent more products on average, with “It’s Back” flags on the items, the Bentonville, Arkansas- based company said today. New pasta, beverages and snacks have already arrived, and fresh groceries, electronics, sporting goods and apparel also will reach shelves this year.

    http://www.bloomberg.com/news/2011-04-11/wal-mart-brings-back-8-500-products-in-bid-to-end-u-s-slump.html

    If you haven’t worked in Walmart for a couple of years back before the big changes started, you have no idea what made Walmart what it was. You also have no idea what has been happening since that has been destroying the company. The closest example I can give you is look at what happened to Kmart when they became the big boy in retail, how they changed the way they operated from what got them there and how that led to their bankruptcy. Walmart is following the same path but from a much greater height.

    The biggest inside joke for the last 7 to 8 years in Walmart is that: Bentonville keeps coming up with these bright ideas, gets told they will fail, does them anyway, has them fail, then tells the people in the stores they are going back to what Sam Walton started and then repeat the same steps expecting a different result.

  55. gnomish says:

    nice post, boballab. it’s always interesting to get the details.
    i spent some time at a law library once reading antitrust cases. when you read the details, it’s fantastic and scary.
    i read one of general electric and one of alcoa aluminum because they were treated in a book called Capitalism, the Unknown Ideal, http://www.fileserve.com/file/Wg3bYSb/Ayn Rand – Capitalism – The Unknown Ideal.rar

    jeff- CAN TOO! :)

  56. E.M.Smith says:

    @Boballab:

    All interesting. All unrelated to my (one and only very small) point.

    ON AVERAGE Walmart has managed to keep wage rates low.

    In the past.

    In the transition.

    Now.

    See the numbers posted above. (I don’t really care about the words / verbage in those quotes, just the “average wage” numbers).

    Those numbers are not disputed anywhere that I can find.

    Realize they are AVERAGES. That means that you can treat every single individual fairly and STILL have a low average. (Just as every day can be normal but the average temperature can be high or low based on just which places you select for thermometers…)

    The transition in method of calculating pay (‘merit and step’) was partly also to solve the sex descrimination lawsuilts. (Preventing manager discretion also prevents manager bias in outcomes. – NOTE: That is “outcomes” not “intent” as the sex descrimination laws are based on “equality of outcomes” not any actual descrimination against any particular person…)

    I fully understand the change in method of pay, what it was before, what is was turned into, and why. It is all interesting, and not relevant to maintenance of a “Cost of labor” advantage over the competition.

    As pointed out above with the butcher example, it can be as simple as work rules and span of control.

    Having 8 stocking clerks per supervisor instead of 6 gives a lower average wage even if everyone on the 8 team is paid more individually. That is why uniions stress being able to control the work rules so much.

    You clearly have a great deal of angst over changes at Walmart and a great deal of history on the poor decisions new mangement made that is nagging at you, and it’s fine if you want to post that, but it doesn’t change my (one and only) point: Walmart managed it’s labor force in such a way (whatever that way might be and however it might be great for the individual employee) such that the average labor pay was lower than the competition. That is just a numerical fact extant in the numbers I’ve seen in the business press for decades (and in the articles I could find on line to link)

    Again:

    That is not a bad thing.
    It is a good thing.
    It does NOT mean Walmart was bad, evil, or paid badly.
    It is NOT what the Unions claimed.

    (Though the Unions DID use the average numbers in their claim. They asserted the averages meant that the individuals were paid less, and that is “not evident in an average”…)

    So can you please stop claiming I’m a dupe of the union propaganda? (However indirectly…)

    It’s just an average wage rate number.

    $9.64 in 2004
    $10.11 in 2006
    $12.82 at the high end today

    In all cases lower than the competition.

    Again: That does not mean the individual worker is being treated badly or paid less. It can simply mean that the union rules require a butcher be on duty any time meat is sold or that Walmart has stores big enough to have 2 junior butchers per senior while Safeway does not.

    @Gnomish:

    That I am stating the definitions does not make me an advocate of a point of view.

    Monopoly practices are “not good” for the non-monopolist no matter what you think of there morality.

  57. E.M.Smith says:

    Stephen Wilde

    “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.
    Alexis de Tocqueville”

    That is the revelation for me.

    It was for me too, though some time ago… On my “ToDo List” is get the collected works of de Tocqueville and read them. I doubt I can get that done before I expire… Sad, that. (It’s not the expiring part that bothers me, it’s the things I will not get done before then…)


    But she never gained control of the public sector so in fact she failed and with the recent financial crisis and the low possibility that it can be resolved without severe pain I fear that the end point is coming when our representative systems of government will be replaced by something less benign.

    That, too, is my “fear”. We lack the collective insight and resolve to “do the right things” so must take the hard path through collapse and ruin. Forever nailed to The Wheel…

    I didn’t previously know that the critical issue had been identified and predicted so long ago.

    The more I read the old writers, the more I despise TV.

    As near as I can tell, back when there was no TV folks were forced to spend more time keeping themselves busy; and for the brighter folks that meant thinking and “discourse”. As a result, they were far more skilled at both than the typical politician of today.

    I’m also pretty sure that being forced to learn Latin AND Greek and read the Classics caused a certain sharpness of mind that is not present in the MTV Generation…

    Sad that…

    (Heck, despite setting it as a goal some couple of decades ago, I can only barely read simple Latin and have just enough Greek to prounounce a few words and pick out the cognates… Another “unfinished symphony”… )

    I wonder if there is a “market” for the English Empire era style of school. One where you learned Latin, Greek, English, a foreign language, and then read the classics in their original language (instead of Cliff’s Notes…)

    I know I’d have liked it much more than what I got (where I was bored stiff all day most days and spent most of my time looking out the window daydreaming… waiting for the “me time” at the library where I could go learn something interesting…)

    @gnomish:

    Perhaps you missed the implied sarcasm… Let’s try again:

    I must admit that I find your mental gymnastics nearly impossible to replicate…

    /sarcoff>

    Look, you like tossing around a lot of words with large meanings, but mostly in ways that obscure rather than illuminate. Then you like to ramble a long time (one could lean toward ‘potificate’ easily) on topics of the virtue of your binary blinders driven world view and toss rocks at folks who see the world more fully, with the depth of a non-binary scale. It can, and does, get tedious.

    An example would be your desire to toss out the subtile differences of meaning in the jargon of Economics with a wave of the “ontological” word you love so much.

    (Ontology just being the study of what is real “Ontology (from the Greek ὄν, genitive ὄντος: “of that which is”, and -λογία, -logia: science, study, theory) is the philosophical study of the nature of being, existence or reality as such, as well as the basic categories of being and their relations. Traditionally listed as a part of the major branch of philosophy known as metaphysics, ontology deals with questions concerning what entities exist or can be said to exist)…

    So rather than saying: There is no such thing as “local monopoly”, one is either a Total Monopolist or not a monopolist in any way: you “dress it up”. Yet it just hides what is being said. It loses the fact that you treat the word “monopoly” as a binary scale, and absolute (and it does lend itself to that in the popular usage as “sole provider”); but it ignores the “terms of art” that derive from looking in detail at the effects of a Pure Monopoly and seeing what forms of action that Pure Monopoly causes which can then form the definition of what is “Monopoly Power”. It also obscures that IFF one decides that is “a bad thing” one could look for that same action, that same behaviour, in folks who have not achieved a final Pure Monopoly and decide that rather than waiting until they have scorched the whole marketplace, one ought to curb the behaviours now.

    So perhaps we ought to take just a moment to look at “what is real”. What has happened in the real world, historically.

    Then you rail about things like “predatory pricing” based on some notion that everyone ought to be able to do any thing any time regardless of the impact on others or the society at large. Your Ayn Rand binary world view. It is not some great communist plot to destabilize capitalism to realize how a Pure Monopolist acts. One of those actions is to price goods below the Cost To Manufacture (in local geographies to achieve dominance, supported by excess prices where they have already achieved dominance). There is NOBODY who can compete on that basis. The Biggest Wallet Wins. Period. Full Stop.

    Then they can use that Pure Monopoly in that one industry to take over the next one. And the next. And the next.

    There are Economies Of Scale in financing (without regard to the particular industry) that let them do this. Look at GE for example. They are in all sorts of things just based on their size letting them get money more cheaply.

    The end game of THAT, is the eventual owership of the entire economy by One Giant Monopoly.

    Please note: At no time am I saying if that is good, or bad. I am only saying that is how the math of finance and scale will have things end.

    Yes, there are “diseconomies of scale” too. BUT, the Monopolist will expand, using their Monopoly Advantage, and consume even the lesser economic areas as they do so until such time as all economies of scale are balanced against the diseconomies of scale. That point is clearly about the size of an entire economy (as seen in the various Socialist Economies where they are such a Monopolist and run the whole place. It works well for a while, then the diseconomies start to stack up as individual initiative wanes). Unfortunately, that “fade” point only comes AFTER the Total Monopoly has succeeded…

    Please note: This is NOT theoretical. We “lived that dream” in the Robber Barron era. We had the J.P. Morgans and the Rockerfellers “doing their thing” unimpeded. The result was “not pretty”.

    Now you may want to live in a world where you are free to be a slave to them as they fight for ultimate dominance. Most folks do not.

    So we, as a culture and as a country, decided that the use of those particular practices that damaged others and were clearly only to “win” rather than make life better were “a bad thing”. (i.e. running prices down to ruin the wealth of other businesses, then UP to steal the wealth of the remaining population; with a large net destruction of wealth and a horrific concentration of it in the hands of the Monopolist)

    You may not like that, but for pretty much everyone other than the dozen or so Robber Barrons who were bent on economic domination of the world, it has been a Very Good Thing. We see the same process being played out again but this time with the Chinese Government bringing ruin to our markets and driving our businesses under in what is euphamistically called “Mercantilism” but would be more accruately called “State Monopoly Practices”…)

    You see, the basic problem is this:

    There ARE large economies of scale in many industries.
    There ARE large financial economies of scale in any case.
    There ARE natural and local monopolies.

    If you blend those together and stir, then wait… The inevitable result is “Fattest Wallet Wins”. It really IS like the board game of Monopoly, that was marvelously designed with the same instability in it.

    The necessary result of that is you get these 3 equally unfree/bad choices:

    1) Forbid the game. Have Socialism.

    2) Let the game run. Have Laissez-faire capitalizm and accept that you will certainly be a slave to a Robber Barron. In the end there will only be one left standing, so you better hope they are nice… “It’s good to be the King”, but you are not going to be it.

    3) Try to manage the system such that the worst effects of it are mitigated, to preserve the competition seen in non-monopoly markets, while avoiding the ills of too much Socialism. The “mixed” or “regulated” economy.

    There is NO choice of a nice free and competitive market with millions of players all in liberty and open competition. That is an Ayn Rand Fantasy based on failing to recognize that in such a world “The Fattest Wallet Wins”.

    This is NOT a theoretical. The world has run these experiments repeatedly.

    Socialism regularly fails. Sometimes dramatically. Sometimes with a whimper. From Soviet Russia to Fascist Italy to Maoist China to East Germany vs West Germany to North Korea vs South Korea.

    We’ve had the Robber Barron experiment too. Never quite to completion (though we can see it happening again in China where the Government is taking that role… we will see if they end up owning the world. So far it’s working…) It is quite clear how things ran in the 1800s. That the population at large decided to stop the experiment before it destroyed everyone else does not invalidate the observed results. “Free” Capitalism results in concentration of ownership and power, unending, with the ruin of the smaller players.

    And we’ve run the “mixed economy” from about 1890 with the Sherman Anti-Trust act forward.

    Of all of them, the “Mixed Economy” has worked the best for individual wealth and freedom.

    (If you would like to dispute that, please point to the example of a large participant in the global economy that has Laissez-faire laws and has a wealthy population – not just a few wealthy families – with freedom for all; or at the Socialist State that has not fallen into ruin…)

    If you would think of pointing back at ancient economies, such as Rome, please be advised that there is little new under the sun in Economics.

    http://en.wikipedia.org/wiki/Competition_law#Roman_legislation

    An early example of competition law is the Lex Julia de Annona, enacted during the Roman Republic around 50 BC. To protect the grain trade, heavy fines were imposed on anyone directly, deliberately and insidiously stopping supply ships. Under Diocletian in 301 AD an edict imposed the death penalty for anyone violating a tariff system, for example by buying up, concealing or contriving the scarcity of everyday goods.

    More legislation came under the Constitution of Zeno of 483 AD, which can be traced into Florentine Municipal laws of 1322 and 1325. This provided for confiscation of property and banishment for any trade combination or joint action of monopolies private or granted by the Emperor. Zeno rescinded all previously granted exclusive rights. Justinian I subsequently introduced legislation to pay officials to manage state monopolies. As Europe slipped into the Dark Ages, so did the records of law making until the Middle Ages brought greater expansion of trade in the time of lex mercatoria.

    So while you have a nice fantasy view of a “free and competitive market”; the reality is that in the long run markets can be Free X-Or they can be Competitive, not both. Human greed, avarice, and abuse of power will inevitably lead to market manipulation, restraint of trade, price fixing, pricing below cost (“predatory pricing”), formation of Cartels, Unions, Trade Associations, Trade Combinations, false shortages, and a very long list of other non-competative behaviours.

    The end result of those behaviours is ownership of the world by a few families (and eventually only one of them would survive if allowed to run to completion; but it collapses before then).

    Be sure that is the world in which you wish to live before you decide it is the best and only way…

  58. Verity Jones says:

    Great post E.M. I was trying to comment on this the other evening but our broadband wasn’t behaving. I have to say I get goose bumps when I read some of the stuff de Tocqueville wrote all that time ago that is so pertinent now.

    Got to pick up on one thing…

    Pascvaks (2 June 2011 at 11:43 am)
    “Don’t y’all just hate “words”? There’s too many of them. And folks just don’t know what they all mean.” (and your follow up)

    Yup – I have a love/hate relationship with words.

    gnomish (31 May 2011 at 7:58 pm) said

    “language matters – it’s what we use for thinking.”

    Well I tried to say the other evening (broadband didn’t cooperate) “Speak for yourself”

    Give me pictures any day. I can describe the pictures but sometimes the words I use are approximate. Telepathy, however sometimes works quite well. Some people are on the ‘same wavelength’ , others, no matter what you say it feels like to are from different planets.

  59. gnomish says:

    heh.
    according to the historian i read:
    in 312 ad, under diocletian, the citizens lined up in the bread lines with bone and metal meal tickets for their ration.
    diocletian got the idea to silver plate copper coins and proceeded to debase what had formerly been the standard currency in trade from madagascar to siberia where they have been dug up – the silver owls, i mean. he was apparently the forefather of johnson’s clad coinage.
    the smaller monetary unit, a copper rod, called the ‘as’, shrank from about a foot long to about 2 inches.
    diocletian’s economic system was not protecting anybody, e.m., it was plundering everybody.
    those crazy inversions, eh?
    and you should know what it really means when you hear the word ‘hoarder’ bandied about. i hope nobody should ever experience it first hand.

    i understand you have a problem with whatever you consider rand’s philosophy. i don’t think she really is useful to cite as an economist, but i understand that her mythology must constitute reproach to certain types of individuals.
    i did quote greenspan, which you didn’t remark on, and i can quote from adam smith to luddy von mises if i feel like – but i do understand the point of your post. can’t say it’s worthy of my respect but i will comply for reasons i do respect.

    good for you to look up the big words like ontology and find that i use them correctly, even if i can’t manage capitalization…lol

    if you study more, you may also find i’ve not misspoken on anything, but no fan of cruelty, why rub it in?
    as pat condell says, ‘peace’.

  60. E.M.Smith says:

    @Verity:

    There are “word people” and there are “gestalt people”. I am able to think in words, but usually just “think in knowings” and translate it into words. Words are wonderful things, but so limited, single threaded in time and space…

    Yes, “visual thinking” is what I call it a lot of the time… but it’s more than that. Sometimes it’s composed of non-visual gestalting… Sometimes just that vague “doesn’t fit” feeling, then I spend a day or two figuring out what “it” is and how “it doesn’t fit” then translating it all into words to tell someone else how they are wrong in their word puzzle ways… The “logic engine” just says “reject”… but without the word…

    How to explain a color/smell happy/sour to someone as “why they are describing it wrong”…

    I don’t have a full blown version of it, but this is a description of the limit case:

    http://en.wikipedia.org/wiki/Synesthesia

    Some ideas just taste wrong…

    @gnomish:

    Please note that Atlas Shrugged is a novel. Not a work of analysis nor a guide book to life. A work of fiction.

    I have no “problem” with Ayn Rand, the philosophy she plays with in her novel, nor even how folks like to play off of it for political effect. (Other than that the damn book is just too longwinded and wordy for me to ever manage to finish it, try as I might from time to time. I guess I get bored too easily…)

    My only “complaint” comes from trying to cite a work of fiction as life guidance or thinking that it has more “insight” into real world economics than the assembled work of all the luminaries of the field… Yes, it serves a purpose as a propaganda tool for the ultra-free-market “side”, but it is not reality.

    You may not LIKE the way terms of art are defined in any given field, but they ARE the correct and valid terms to use. But you must learn them correctly to use them wisely. Frankly, I just get tired of the constant orthogonal use to which you put them. Keeping “two sets of books” gets old.

    At any rate, if you think “free markets” are God’s Gift, I suggest a much more in depth reading of Economic History. I’m not fond of slavery, and that is where you end up under completely “free” markets. The market remains free, but you do not. The traditional “end case” was the King who granted “favor” and the establishment of royalty. The USA took a new turn with our “royalty” being based on who got the fattest wallet quickest when there could be no King doing it by force of weapons. Rome had the Empire taking over the natural monopolies as they arose, then deciding that didn’t work too well either as it played with early forms of The Socialism Shiny Thing. Now it is China using “Mercantilism” as a national “Fat Wallet” and the WTO rules to bend the “Free Market” into domination. All through history you can find, repeatedly, the problem of “free markets” meaning manipulated by the largest player as soon as they were large enough to do it. Then everyone ends up their slave. So “good luck with that”…

    BTW, citing a reference to establish the basis for a “springboard” off of it is not “looking it up” to find out what it means… It is “establishing the premises”.

  61. Stephen Wilde says:

    “Sometimes just that vague “doesn’t fit” feeling, then I spend a day or two figuring out what “it” is and how “it doesn’t fit” then translating it all into words to tell someone else how they are wrong in their word puzzle ways… The “logic engine” just says “reject”… but without the word…”

    Yes, that’s my experience of it too. However, sometimes the thought that follows the feeling eventually shows that the feeling was wrong and I have to bite the bullet.

    I guess the people we need to be scared of are the ones who don’t do the thought bit. There seem to be rather a lot of them and they can get nasty.

    It seems to be quite rare to be able to think through first principles and then tell oneself that the initial ‘taste’ of an idea was not the correct reaction.

    Perhaps we should try training schoolkids on that.

    Wait, didn’t just that get done in school when we were young ?

  62. David says:

    Regarding gnomish
    “The statement that “Power corrupts”, is fundamentally flawed. No reasonable person seeks to be powerless, to be a victim subject to the discretion of others”

    with ‘power’ defined as ‘the ability to force another person to do something’, the quote is logically sound and true.
    no reasonable person seeks power (to enslave)
    the choice is not to be master or slave.
    it’s not the only game in town.
    rights and the exercise thereof – it is distinct from and opposite to the exercise of power.

    easy.”

    Not certain of your point Gomish. Power is, in many respects, the ability to accomplish one’s goals. Thus a person may submit to another, a gold digger” for instance, as a means of achieving a desired result. This submission is still the weilding of power. When I state , “No reasonable person seeks to be powerless, …” I am refering to having a complete inability to achieve that which they desire, be it wise or not.

    My main perspective was that the very word “government” refers specifically to “govern” as in direct others, or power over others, which always involves coercion through force, and this aspect of power is a “necessary evil” as Jefferson stated.

  63. David says:

    Regarding E.M.

    “Per “power”: The economics version of it would be more like “unbridled power corrupts”; as we are usually looking for a balance, a “countervailing power” to any other.

    To that extent, we’re more in line with your ideas that SOME power is good, and it’s too much, concentrated and unopposed, that’s the problem…”

    Yes I agree, as in your discussion of monoplies, which can be very real and either the result of the most effcient means of production, or any number of direct manipulations of others, as in “robber baron” tactics.

    So again the distinction I make with Lord Acton, is the same in economics. Power, used to direct accomplishment of a goal, “sell as many wickets as possible” is fine, as long as one is trying to sell them via making them better and or less expensive. When one crosses the boarder to influence the competition, “sell below cost, drive them out of business”, then one is exerting power over others, trying to “govern” them.

    I make a further distintion that “power” itself does not corrupt, it just reveals or enables the expression of that corruption. You. like me, have appointed people to various levels of power and leadership within business. It is always curious how different individuals respond to this new power. Some use it matter of factly, to accomplish the business goals, some bathe themselves in petty dictatership like direction of others. The “corruption”, in those petty dictaters, was pre existing, it only blossomed when it was given the opportunity. Thus power “reveals” corruption, it does not cause it.

    The lesson I wish socialist / statist to comprehend is that almost all matters of uncontroversial crime, in all categories including economic crimes, involve exerting power over others to control (govern) their behaviour either directly or indirectly. And so yes, “Government” is the most dangerous of all, for it inherently has the most potential evil. History bears this out quite well does it not?

  64. David says:

    Regarding Pascvaks
    “David

    Honest Injin.. wasn’t throwing a stone at you, your comments were not a target either. The “observation” I was making was very truly general to the whole discussion;….”

    Thanks Pascvaks, and no. I did not really take it that way, although my preceeding post was rather wordy, (-; I just thought the comment rather random and did not know how it pertained. I am glad I asked, as your comment here provided greater clarity. I think I got more then 10%, but some claim we only use ten percent of our brains, so perhaps you are correct,
    (-;

    A Chrisitian fundementalist friend once told me that the Bible was the WORD of God. In response I asked him, “Then, when the Bible says, “God said….” was there a giagantic bible spinning out of the nothingness of space?” I then explained that words are symbols of things, not the thing itself. A very wise man once exclaimed, ” Learn to read the verbage between what words people say, for their words, and what they mean to say, may be poles apart.” Our host has commented on this in his discussion of asbergers.

    Cheers

  65. E.M.Smith says:

    @David:

    Per the Bible… We know when various books were written, and by whom. You might also ask “If it is the WORD of God, then why is it called the Book Of {Mark, Matthew, Luke,…}?”

    One could also point out that “The Begats” (as we called that part where most of us ended our “read the whole Bible” project ;-) were written by the Jews as a record of their lineage and don’t seem to have a whole lot of Godliness in them…

    For bonus points you could ask if the Maccabees were written by God too? (Nice for starting a discussion of the apocrypha and the decsions about “what’s in what’s not”)

    It is very important to remember that The Bible was written by men. (And, perhaps, women, if you think the Gospel of Mary Magdalene belongs in…) Lest we fall into the trap that has consumed the Muslims….

    Per the comments on power: Yup, you got it…

    You can’t have a power vacuum, something will fill it. So the best you can do is put in a hobbled power. Just enough to keep the evil overbearing power out…

  66. geo says:

    Awesome site… inspired me to read poor Richards almanac. Is there somehow regular American People can save our currency by investing in the go’ernment in a way that encourages ownership of the Philosopher’s Stone?

  67. George says:

    Portugal becomes the latest country to show the “progressives” to the door in today’s elections:

    Portugal’s governing Socialist Party has admitted defeat in the general election.

    Socialist leader Jose Socrates said he accepted responsibility for the defeat and resigned as head of his party.

    The victorious centre-right Social Democrats (PSD) led by Pedro Passos Coelho are expected to form a majority with the conservative CDS.

    http://www.bbc.co.uk/news/world-europe-13658998

  68. George says:

    Oh, and there’s this:

  69. E.M.Smith says:

    @Geo:

    As near as I can tell “Investing in the goverment” is an oxymoron and the easy way to invest in the “philosopher’s stone” is to buy coins…

    @Murray:

    Oh Boy! Now I can buy a Fiat Pickup Truck ;-)

    @George:

    Love that poster ;-)

    Nice to see that Portugal is not all stooges on the government dole… Now if we can just get some of them to move to California to tip the vote here…

  70. plenarchist says:

    @EM – Interesting thread. You found some very good quotes. I’m impressed by your breadth of reading (in many areas; not just politics). I’m trying to read more about politics, economics, etc to the extent I can and there is so much. I could spend a lifetime just trying to work my way through all the material on Mises.org.

    Anyway, I see a central theme to all manner of interventionist state, the corrupting influence of power over others whether held by one individual, oligarchs, or the ‘majority.’ And yet I think that it’s not the power which corrupts men as Acton famously remarked, “Power tends to corrupt and absolute power corrupts absolutely.” I think he was wrong. Humans are born corrupt and that power simply makes the corruption manifest.

    But what we are calling ‘corrupt’ might actually be part of man’s nature. That evolution has equipped men with an instinctive desire to dominate and that this need is so compelling it will overwhelm any man’s sensibilities given the opportunity. That this instinctive need to dominate is akin to the sex drive. Maybe even somehow related. Is that Freudian?

    Anyway, I believe that the only way to gain real sustainable freedom is for all men to be impotent to impose their desires on others leaving persuasion and negotiation as the only means to get what we want. Which leaves me to believe that *all* forms of government, i.e. where power over others is institutionalized, will inevitably destroy the society. Only to be reborn as something else; an infinite loop… as in Miller’s ‘A Canticle for Leibowitz.’

  71. E.M.Smith says:

    FWIW, raising bunnies has shown me that greed, desire for dominance, etc. is innate and not just human…

  72. R. de Haan says:

    That’s why the Founders drew up a most brilliant Constitution.

  73. plenarchist says:

    @Haan – Unfortunately, the Constitution is fatally flawed. As EM noted in the other thread, Aristotle rightly observed that electing gov officials leads to oligarchy which is what the US has been at least since Lincoln. What was brilliant about the Constitution was the Bill of Rights.

    I remember reading somewhere that Jefferson was disappointed that the BoR wasn’t more encompassing but was relieved that it was in there at all. Of course, today the Constitution is a meaningless document. It’s exploited like the Bible… trot out a useful bit when it serves a purpose and ignore it the rest of the time.

  74. Pascvaks says:

    @R. de Haan –

    So true, and FWIW, IMHO the most brilliant part is the first three words. When things get really flakey it’s ‘We The People’ going back to LEXINGTON and CONCORD, or FT SUMTER. Tis true that nothing lasts forever. But if we ever have to go back to Square One and start all over, that good old piece of paper is better than most. Just erase all the non-sense that it was said, implemented, and ruled on, by past Congresses and Presidents and Supreme Courts, edit the bits that were peoplerly ammended (not amendments ‘imposed’ by courts), delete the entire Federal Register, re-boot the States the same way, and begin again from scratch. Maybe call it the Second Republic too, just for added historical effect;-)

  75. Pascvaks says:

    PS: Of course it’s VERY EXPENSIVE in blood and property and fortune. Very, very expensive indeed. One day, perhaps, things will have become so bad that ‘We The People’ will think it’s cheaper than continuing on with what they have. Life’s a beach! Always changing. Always the same.

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