Does privatization necessitate a give away?
smithaa02
however only do anything for profit. If tycoon B only acquires the water
supply for the equivalent of 1 million units of water per year, when this is
what he will get paid in return, this is a no go for him, for he would
receive no profit! So he acquires the water supply for X and sells the water
to the public for say 2X. The public is bamboozled, and the tycoon is all
the better! The water supply issue is zero-sum. But yet profiteers (all
capitalist) will ONLY do anything for their personal gain. So the public
(the water sellers and future buyers) will be at a loss. Just as you would
be at a lost if you had someone sell your car to a used car dealership, gave
you the proceeds, and told you to buy back the car, (which you could only do
for a loss).
Isn't this true for all examples of privatization?
jonah thomas
I can argue that one both ways.
On the one hand you're essentially giving some capitalist a monopoly.
That's potentially expensive.
On the other hand, if the government runs the monopoly they may not
bother to cut costs. That can be expensive too. So you come out ahead
with the privatization if the monopolist runs his business so much more
efficiently that he charges less even after collecting his monopoly
profits. It depends on the particular government workers and the
particular monopolist.
A third alternative is to have a regulated monopoly. This can give you
the worst of both sides. Since the regulation is likely to involve
setting some percentage of profit, the regulated business gets the most
absolute profit by driving prices high.
Clearly the public does better when there are good alternatives. If
it's cheap and effective for them to store rainwater, or if they can put
up solar panels and sell electricity back to the power company etc. But
this depends on technology, and it's always kind of hit-or-miss which
technology is practical any given year.
David Haardt
That's where competition and/or regulation come(s) in.
-David
Tim Worstall
It can also give you the best of both sides....it depends upon the
nature of the regulation.
But you have the basic idea right.....it is possible ( not necessary,
but possible ) that running a business for profit provides the
consumer with a better product, or cheaper prices, than the way Govts
run things...even including the profit margins.
The Economist reported on an interesting observation recently. Water
supplies in England are private companies run as regulated monopolies.
In Wales, it is a mutually owned company, not for profit. In Scotland,
a Govt owned for profit company. In N Ireland, a Govt department.
England has the purest water at the lowest cost with the least
envronmental pollution of the four. N Ireland is the worst.
Tim Worstall
josX
Better yet: the water-supply comes from for instance water-table
wells and a river, suppose the people by their government own these
river/wells. The tycoon B is an investor and invests in proxy C to
run a bisnis in water. Proxy C is given sums of money extorted from
the poeple before through wage slavery (a bad effort/profit ratio,
causing the profit of the oversight/owner-entity). The proxy C gets to
own the river/wells to the extend the government wants them used for
drinking-water, bought with the extorted investment money given by
tycoon B, where these possesions are collateral: if tycoon B makes
no proffit from the bisnis of proxy C, and proxy C defaults on the
investment, it comes to own the water-resources (hence, how can
it lose).
Then proxy C can demand near any price for the water that leaves enough
money in the pockets of the citisens to also keep buying the other products
in tycoons B's line. Unless the price of water is too high, it will be
very difficult to compete with proxy C in water, because who has the
investment-funds to buy water-resources, indeed if there are still any
available at all. Everybody has to work for a slave-wage, hence nobody
can save to start a company.
But it is even worse i guess. When tycoon made its first fortune, it
simply borrowed from an investor (who might have been able to print
free money if it was banking), and the investor invested in tycoon
B because it thought it had a tight game-plan (and could be depended
upon to not blow the extortion scheme, but was greedy enough to stay
on top of it and perpetuate it).
The bank investing in tycoon B gave him the power to buy a resource
which became then impossible to own or farm/use by the general public
(for instance a metal mine). The wage-slavery caused tycoon B to build
a fortune for its own investment scheme.
The people need iron, and therefore the price of iron going up if
demand sinks, attracts worker-drones and master-drones to operate
it until price is high enough in the industry to be able to pay for
human drones. Those slaves that work hardest for the least wage will
be contracted (by the master-drones), forcing workers to outcompete
eachother to a low wage until, possibly, it is just enough to not die.
When the people rebel against this, the government of the same people
steps in to enforce ownership rights as it would for all, and uses its
brute-force-troops (also drones themselves) to help the investor to
keep owning what they ultimately bought with inflationary or extorted
money. Because the loan to tycoon B is ultimately payed back to the
bank at an interest, the money-supply shrinks again and the interest
(for which the bank did absolutely zero effort) can be used by the bank
to feed itself with money that hasn't lost value at the moment of repayment.
Depending on the total volume of investments the value of money goes
up or down depending on what the investors want.
The thing of interest possibly is: the bank can own (or own as
collateral) using inflationary funds. Suppose the bank can heavily
invest in other areas or withhold this investment, it can shrink and
expand the total money supply in the country, by this means it could
possibly force corporations to default so it could become to own
the collateral. This way it is less obvious that the collateral was
purchased using inflationary money, it seems "ok" (a loan was made,
property rights were correctly purchased, the loan defaulted so now
the owner most pay up, since it is bankrupt it only has its property
rights to pay with). Now the bank can rent the mine out and be a
parasite indefinitely to the proxy that will give it best profits,
so bidders to the mine rent would outcompete eachother down. Since
people still need iron and if nobody rents prices go up, sooner or
later prices are high enough for drones to become attracted to the
offered wages. It is especially usefull if a portion of society is
unemployed and near death, because this causes the base of workers
to be highly motivated for only low wages. If all had decent work,
nobody would care to mine until wages were decent compared to effort.
It is my suspicion that cycles of economic growth/downturn (recession)
are not natural but artificial, because i see no NATURAL cause for
a downturn in productivity of an entire economy. I also see that it
is in the best interest of investors to pump on the economy so to
make badly-behaving companies go bust (by not extending credit in
times of trouble) and make better behaving companies weather the problem
(by extending credit during the artificial downturn).
A huge catastrophic storm would be a natural cause for the general
economy in one region to go down. An accident (even if two big
sky-scrapers collapse), or some other non-mass event can't be the
cause. Global economic downturn is probably only possible given
a global *catastrophy*, and then only to the extend that actual
sustained mass damage occurs. If all mines collapse, then that would
be a reason for the entire economy to face some problems. I currently
see only one natural cause for economic cycles: the pumping action of
the investors trying to muscle the companies into submission. A natural
non-manipulated economy would be exactly stable, with an exactly stable
money-supply and fixed average prices over decades/centuries. A normal
non-hyped economy is not hurt too much from isolated price-deflation,
because goods are bought when and if they're needed. Hyped economy
(through advertising?) will be hurt from deflation because the buy
wasn't necesary, so it can wait. If deflation is minor it wouldn't
matter too much, in a stable economy there wouldn't be too much reasons
for wild price swings i guess.
I'm no trained expert mind you, but as in some other areas i think
that is only a benefit (notably modern physics and electronic voting,
both a total mess thanks to `experts', and i read constantly that
economics is in the same problem with its `experts').
Maybe certain investors do not like intelligent theories taking hold.
People might get too smart, could be scary for their scheme. It is
ofcourse interesting that investing can manipulate anything. An investor
can start a whole school of economics if it thinks it is proffitable
to its other interests. Investing is a threat to democracy, because it
puts power even beyond what a government has in the hands of extremely
few manipulators (especially if they can print money). The actions
of investors manipulating the society work both short-term but also
very long term (for instance by sponsoring entire universities, or
causing their proxies to advertise certain theories or policies etc,
they ultimately own TV channels, magazines, publishers etc, you can
do a lot of manipulation with all that if you wanted to.)
> Just as you would
>be at a lost if you had someone sell your car to a used car dealership, gave
>you the proceeds,
Maybe this is like that the bank is giving its proxy the proceeds of their
inflationary money creation, which is simply a tax-burden to everybody:
the dealer buys the car from you with YOUR money (tax, or extorted profit,
because resources are too expensive for normal people to buy from saving).
> , and told you to buy back the car, (which you could only do
>for a loss).
Then you would need to buy back the resource which has added value, added
by... the people themselves working in the mine. Of this work the owner
(ultimately the investor of the tax or extorted profit funds) gets its
parasitic fraction for doing nothing but fooling the people that this is
all very good for everybody. The loss is the profit made by the proxy
and investor, especially the investor who is doing nothing, especially if
it is using inflationary funds (tax money).
So, the bank buys with taxes (inflation), speculates with the tax funds
using companies (proxies owing collateral) and sucks profit. Then
the bank exerts a pumping action on the economy (boom/bust cycles)
to prevent the proxy (company) from repaying its loan and become free
of its parasitic burden. It can pump on the economy because it has
the power to make money more and less worth (some other poster said
how that was done, causing savings to become near worthless causing
re-lending which is inviting new interest-bearing loans, hence the
interest-parasite (bank or investor) is kept into the system where
you would lose it eventually without the economy pumping by the banks
(investors)) because the companies would start getting over the loan
and getting into the plus. Sadly if companies get too much into the
plus without benefiting their workers, this creates investments funds
which can then be used in the same way, so the problem continues just
with different investors.
So, to solve it you would need a law that makes it impossible for banks
to 1) be an institution of taxation (inflationary funds) 2) make it
impossible for both inflation and deflation to be occuring at all 3)
let all hype companies die if they cannot sustain themselves through
deflationary price re-adjustments (prices lowering people holding their
money on the issue). In a non-manipulated economy deflation wouldn't
be happening on all goods at the same time, and boom/bust wouldn't
be occuring in a natural economy on all companies at the same time,
but each company would be on its own cycle causing much less (even
none) economic mass-distress. There wouldn't even be a cycle, just
a continues level play where profits are rerouted to their workers
preventing the dangerous investment fund from forming. This causes
an increase in wages for workers, which causes workers to be more
resiliant in times of trouble, even to the point where they could
carry a temporarily troubled company through a dip in profit. And
they could save for retirenment, knowing what their retirenment would
be worth.
So, privatization is bad, because it gives power leverage of one
person over a natural resource. This power then becomes a tool for
extortion wages, which become a cause for investment funds to build,
which are then again the tool to obtain the power leverage over
resources: it is a self-enforcing loop fed by the acceptance of low
wage workers to accept the loan, and of brute-force troops to enforce
the laws that hurt everybody but the owner/investor. The second start
of the parasitic cycle is the printing of tax money, which creates
investment-funds from nowhere. The third way the loop can start is by
occupation of resources by arms, and denying people access unless they
sweat enough and give up a share of the profit. Apparently there are
three types of investor: the tax investor (using inflation money,
banks), the extortionist investor who is investing sweat money
pseudo-correctly "earned" given todays morals (possibly starting
its own company from scratch, or overcoming the bank investment), and
the crime syndicate (occupying resources at gunpoint, this happens in
Bolivia with drugs for instance). The dictatorial government would
qualify as a crime syndicate.
So privitization is always bad because it is power concentration.
Power concentration always leeds to power abuse. Nationalizing is
also bad if it leads to power concentration, which is usually does to
some degree at least (corrupted government officials acting as owner).
What you need is ownership by the people themselves of the resources,
because that means power-distribution. Power distribution causes
funds distribution, causes the wealth to become more evenly spread.
Wealth more evenly spread causes more joy then wealth concentrated, per
unit of wealth (a bowl of stale rice can be the world for a hungry man,
a rich man would be employing people to throw such items in the trash).
Really pretty easy. The problem start and ends again with exploitation
hierarchy, and the question if you like it or don't like it. If economists
are to think objectively, they should not like it because it causes an
objective joy-from-wealth loss in the total of the group. Give each
person a happyness index 0 to 1 (0% to 100%), then it is easy to see
that wealth concentration causes a total joy loss, and more even wealth
distribution causes an objective wealth increase, even if no more goods
were produced (try the maximized wealth concentration for instance).
It would be interesting to figure a way to fight the extortion scheme
(short of revolution by arms). I guess it all depends upon the acceptance
of any exploitation by the total population. Many people agree to the
varies extortions going on (notably effort/profit disparities), so there
is probably no way to overcome it right now, extortion is still too popular.
--
MaLenna
>
> On the one hand you're essentially giving some capitalist a monopoly.
> That's potentially expensive.
According to my proof, it is ALWAYS expensive and done in a host-parasite
like relationship.
> On the other hand, if the government runs the monopoly they may not
> bother to cut costs.
True that. However... I would deem it the lesser of two evils. While
public property suffers from communication breakdowns from the public to the
control mechanism, this can be corrected and perfected. Not so, with
private property. Corruption and exploitation is guaranteed as the profit
motivator dictates this how it will be done. Again, my example was
zero-sum. I don't the capitalist will get more money by putting fizz in
the water.
> That can be expensive too. So you come out ahead
> with the privatization if the monopolist runs his business so much more
> efficiently that he charges less even after collecting his monopoly
> profits. It depends on the particular government workers and the
> particular monopolist.
A public example of public control gone bad, is most probably not an example
of public control but private control disguised as public control.
> A third alternative is to have a regulated monopoly. This can give you
> the worst of both sides. Since the regulation is likely to involve
> setting some percentage of profit, the regulated business gets the most
> absolute profit by driving prices high.
Again, the water buyer has to pay dividends, and if a controlled monopoly
won't let him do it, he won't buy. Therefore even with regulations,
privatization is a give-away.
MaLenna
news:6bed43cc.03083...@posting.google.com...
>
> -David
you and sells your car to ('the best') used car dealership, you won't be for
less when you buy it back? Under your theory used car dealerships (and all
capitalist), would never markup their items for profit, to which they do!
...thus proving you wrong.
Again, it is zero-sum in the aggregate to sell public property and then buy
it back on the capitalist's terms. But, the capitalist only does anything
for his gain, so his gain, MUST come at the public's loss, since no real
wealth was created or destroyed.
ro...@telus.net
>The Economist reported on an interesting observation recently. Water
>supplies in England are private companies run as regulated monopolies.
>In Wales, it is a mutually owned company, not for profit. In Scotland,
>a Govt owned for profit company. In N Ireland, a Govt department.
>England has the purest water at the lowest cost with the least
>envronmental pollution of the four. N Ireland is the worst.
It would not be surprising that N Ireland is the worst, under any
ownership model. The situations in Wales and Scotland are probably
related more to population density than ownership model. It is
obviously easier to supply water efficiently to a large number of
people in a small area than a small number in a large area.
-- Roy L
ro...@telus.net
wrote:
>Say country X is considering to privatize their water supply. The buyers
>however only do anything for profit. If tycoon B only acquires the water
>supply for the equivalent of 1 million units of water per year, when this is
>what he will get paid in return, this is a no go for him, for he would
>receive no profit! So he acquires the water supply for X and sells the water
>to the public for say 2X. The public is bamboozled, and the tycoon is all
>the better! The water supply issue is zero-sum.
More accurately, water is a natural resource, so privatization is
primarily just a way to give away the economic rent thereof to private
interests. However, there is also an element of capital investment
and resource management, in which private administration is widely (if
not entirely accurately) considered more effective than public.
>But yet profiteers (all
>capitalist) will ONLY do anything for their personal gain. So the public
>(the water sellers and future buyers) will be at a loss.
That is not necessarily so, if the private owners must compete with
each other for customers. Competition (the "invisible hand") is the
only reliable stimulus to efficiency and excellence. Granting
monopolies to private owners is unlikely to result in significantly
better results than public ownership, unless the monopolies are
regulated to an extent that makes the issue of private vs public
administration moot.
>Isn't this true for all examples of privatization?
No. Privatizing natural resources or monopolies will normally be an
outright loss to rent seeking, but privatizing competitive business
operations, as the Germans did with many state-owned East German
industries after reunification, can yield significant net benefits to
the public. The difficult problems involve the complex combinations
of competition and rent seeking found in industries like broadcasting,
mining, railroads, etc.
-- Roy L
smithaa02
"josX" <jo...@mraha.kitenet.net> wrote in message
news:3f51c9c3$0$49111$e4fe...@news.xs4all.nl...
>...
For the most part, I agree with you.
smithaa02
> On Sun, 31 Aug 2003 02:21:05 GMT, "smithaa02" <mal...@chorus.net>
> wrote:
>
> >Say country X is considering to privatize their water supply. The buyers
> >however only do anything for profit. If tycoon B only acquires the water
> >supply for the equivalent of 1 million units of water per year, when this
is
> >what he will get paid in return, this is a no go for him, for he would
> >receive no profit! So he acquires the water supply for X and sells the
water
> >to the public for say 2X. The public is bamboozled, and the tycoon is all
> >the better! The water supply issue is zero-sum.
>
> More accurately, water is a natural resource, so privatization is
> primarily just a way to give away the economic rent thereof to private
> interests.
What economic rent? The people that own the property are using the
property! You can't pay rent to yourself. When the capitalist comes, buys
up public property, and resells it back for profit, now that is economic
rent.
>However, there is also an element of capital investment
> and resource management, in which private administration is widely (if
> not entirely accurately) considered more effective than public.
The kernel that is traded, however is zero-sum, and there will always be
(with privatization/profiteering) exploitation. Now if the private company
does some extra filtering, or what not, this is separate from the kernel
(that being the aquifer, piping, and processing plant). Any improvements
are separate, and are things the public could do as well, should property be
in their care.
> >But yet profiteers (all
> >capitalist) will ONLY do anything for their personal gain. So the public
> >(the water sellers and future buyers) will be at a loss.
>
> That is not necessarily so, if the private owners must compete with
> each other for customers. Competition (the "invisible hand") is the
> only reliable stimulus to efficiency and excellence. Granting
> monopolies to private owners is unlikely to result in significantly
> better results than public ownership, unless the monopolies are
> regulated to an extent that makes the issue of private vs public
> administration moot.
Competition is a joke. If your theory were correct, then used car salesmen
wouldn't mark up cars, stock brokers wouldn't collect commissions, and so
on. The profit motive is THE motive of capitalism. All business's collect
(or plan to get) profits. To believe otherwise is a fantasy. The idea that
business will compete with business is a self-defining definition. No race
to the bottom for them! All is made worse, by the fact that not all wealth
is variable, but much wealth is static (zero-sum), such that if London
privatizes their tube, competition is NOT going to tear up streets, piping,
wiring, etc to put in their own tube.
One of the chief reasons, the water supply can't be sold and bought in the
capitalist fashion, is that there is not infinite money. I can't bid for
the water supply for I have no money, which means only the few can bid, and
this will lower the price it will fetch for the public.
> >Isn't this true for all examples of privatization?
>
> No. Privatizing natural resources or monopolies will normally be an
> outright loss to rent seeking, but privatizing competitive business
> operations, as the Germans did with many state-owned East German
> industries after reunification, can yield significant net benefits to
> the public. The difficult problems involve the complex combinations
> of competition and rent seeking found in industries like broadcasting,
> mining, railroads, etc.
>
> -- Roy L
...and look at those former 'communist' countries roar! The West Germans
took over the East Germans like predators with their control over the Mark,
and the East German's dependence upon public benefits (like pensions that
were destroyed with the invasion). Today, the west is quite a bit richer
then the East.
ro...@telus.net
wrote:
><ro...@telus.net> wrote in message news:3f52448b...@news.telus.net...
>> On Sun, 31 Aug 2003 02:21:05 GMT, "smithaa02" <mal...@chorus.net>
>> wrote:
>>
>> >Say country X is considering to privatize their water supply. The buyers
>> >however only do anything for profit. If tycoon B only acquires the water
>> >supply for the equivalent of 1 million units of water per year, when this
>is
>> >what he will get paid in return, this is a no go for him, for he would
>> >receive no profit! So he acquires the water supply for X and sells the
>water
>> >to the public for say 2X. The public is bamboozled, and the tycoon is all
>> >the better! The water supply issue is zero-sum.
>>
>> More accurately, water is a natural resource, so privatization is
>> primarily just a way to give away the economic rent thereof to private
>> interests.
>
>What economic rent?
The economic rent of the resource. If you don't know what that means,
consult Google.
>The people that own the property are using the
>property!
??? No they aren't. They're selling a resource to consumers.
>You can't pay rent to yourself.
But you can collect economic rent from others.
>When the capitalist comes, buys
>up public property, and resells it back for profit, now that is economic
>rent.
Please consult a good dictionary of economics.
>>However, there is also an element of capital investment
>> and resource management, in which private administration is widely (if
>> not entirely accurately) considered more effective than public.
>
>The kernel that is traded, however is zero-sum, and there will always be
>(with privatization/profiteering) exploitation. Now if the private company
>does some extra filtering, or what not, this is separate from the kernel
>(that being the aquifer, piping, and processing plant).
No. The aquifer was there with no help. The pipes and processing
facilities had to be produced by labor.
>Any improvements
>are separate, and are things the public could do as well, should property be
>in their care.
That is the question.
>> >But yet profiteers (all
>> >capitalist) will ONLY do anything for their personal gain. So the public
>> >(the water sellers and future buyers) will be at a loss.
>>
>> That is not necessarily so, if the private owners must compete with
>> each other for customers. Competition (the "invisible hand") is the
>> only reliable stimulus to efficiency and excellence. Granting
>> monopolies to private owners is unlikely to result in significantly
>> better results than public ownership, unless the monopolies are
>> regulated to an extent that makes the issue of private vs public
>> administration moot.
>
>Competition is a joke.
Actually, it is you who are the joke.
>If your theory were correct, then used car salesmen
>wouldn't mark up cars, stock brokers wouldn't collect commissions, and so
>on.
??? Who would devote their time to buying and selling used cars for
zero wage? Who would execute stock trades all day for free?
Please try to devote at least a nanosecond's thought before posting
such nonsense.
>The profit motive is THE motive of capitalism. All business's collect
>(or plan to get) profits. To believe otherwise is a fantasy. The idea that
>business will compete with business is a self-defining definition. No race
>to the bottom for them!
And yet, businesses go broke all the time.
You seem to be very far from understanding even the most basic facts
of this issue.
>All is made worse, by the fact that not all wealth
>is variable, but much wealth is static (zero-sum), such that if London
>privatizes their tube, competition is NOT going to tear up streets, piping,
>wiring, etc to put in their own tube.
Right. There is an element of natural monopoly in many businesses.
But not all. Not even most.
>One of the chief reasons, the water supply can't be sold and bought in the
>capitalist fashion, is that there is not infinite money.
Incoherent.
>I can't bid for
>the water supply for I have no money, which means only the few can bid, and
>this will lower the price it will fetch for the public.
Are you referring to the Willing to Accept/Willing to Pay problem?
>> >Isn't this true for all examples of privatization?
>>
>> No. Privatizing natural resources or monopolies will normally be an
>> outright loss to rent seeking, but privatizing competitive business
>> operations, as the Germans did with many state-owned East German
>> industries after reunification, can yield significant net benefits to
>> the public. The difficult problems involve the complex combinations
>> of competition and rent seeking found in industries like broadcasting,
>> mining, railroads, etc.
>>
>...and look at those former 'communist' countries roar!
I am. You should try it.
>The West Germans
>took over the East Germans like predators with their control over the Mark,
>and the East German's dependence upon public benefits (like pensions that
>were destroyed with the invasion). Today, the west is quite a bit richer
>then the East.
?? But nowhere near as much richer as it was on the day of
reunification. Hello?
Are you a troll, or something?
-- Roy L
smithaa02
Semantic gobbledygook.
> >The people that own the property are using the
> >property!
>
> ??? No they aren't. They're selling a resource to consumers.
When I use my computer I am not paying rent to myself to use such. If I
were, what would I be paying it in? Yen, Euros, Dollars?
> >You can't pay rent to yourself.
>
> But you can collect economic rent from others.
Public and public are sort of the same.
> >When the capitalist comes, buys
> >up public property, and resells it back for profit, now that is economic
> >rent.
>
> Please consult a good dictionary of economics.
You are hung up on trifles and are missing my elementary points, that being
to sell externally and then rebuy back internally is not good, because of
profit motives and zero-sum mechanisms.
> >>However, there is also an element of capital investment
> >> and resource management, in which private administration is widely (if
> >> not entirely accurately) considered more effective than public.
> >
> >The kernel that is traded, however is zero-sum, and there will always be
> >(with privatization/profiteering) exploitation. Now if the private
company
> >does some extra filtering, or what not, this is separate from the kernel
> >(that being the aquifer, piping, and processing plant).
>
> No. The aquifer was there with no help. The pipes and processing
> facilities had to be produced by labor.
Surely the groundwater should belong to the public then, no?
> >Any improvements
> >are separate, and are things the public could do as well, should property
be
> >in their care.
>
> That is the question.
Nothing is stopping water-filtering company X from selling their wares to a
public water utilities.
> >If your theory were correct, then used car salesmen
> >wouldn't mark up cars, stock brokers wouldn't collect commissions, and so
> >on.
>
> ??? Who would devote their time to buying and selling used cars for
> zero wage? Who would execute stock trades all day for free?
Now we're getting somewhere! Who would bother to buy groundwater, only to
sell it back at the same price?
> Please try to devote at least a nanosecond's thought before posting
> such nonsense.
>
> >The profit motive is THE motive of capitalism. All business's collect
> >(or plan to get) profits. To believe otherwise is a fantasy. The idea
that
> >business will compete with business is a self-defining definition. No
race
> >to the bottom for them!
>
> And yet, businesses go broke all the time.
You totally miss the point.
> You seem to be very far from understanding even the most basic facts
> of this issue.
>
> >All is made worse, by the fact that not all wealth
> >is variable, but much wealth is static (zero-sum), such that if London
> >privatizes their tube, competition is NOT going to tear up streets,
piping,
> >wiring, etc to put in their own tube.
>
> Right. There is an element of natural monopoly in many businesses.
> But not all. Not even most.
All businesses will have an element of a monopoly. Zero-sum economics
establishes the framework from which all variable sum economics must grow,
therefore there will always exist these elements in all businesses.
> >One of the chief reasons, the water supply can't be sold and bought in
the
> >capitalist fashion, is that there is not infinite money.
>
> Incoherent.
I'll dumb it down for you... You don't acquire commodity X, but you acquire
the money to buy commodity X, and then you acquire commodity X. A two bit
deal, not one bit as envisioned by economist. Money has to come from
somebody else... Now for you to have this money, third person Y, must not.
He will only unload money for your use if there is something in it for him
(profits, exploitation). The selling and rebuying puts pressure on the
money supply, and gives the money changers profits.
The only way to avoid this would be to have an infinite currency system,
such that every contribution reflected an universal credit, and each
consumption represented a debit, such that the money supply could grow with
the economy.
> >I can't bid for
> >the water supply for I have no money, which means only the few can bid,
and
> >this will lower the price it will fetch for the public.
>
> Are you referring to the Willing to Accept/Willing to Pay problem?
I'm referring to the problem that I don't exist to the seller's auction, and
yet do exist in the aspect that I'm parting with my share of the water
supply.
> >> >Isn't this true for all examples of privatization?
> >>
> >> No. Privatizing natural resources or monopolies will normally be an
> >> outright loss to rent seeking, but privatizing competitive business
> >> operations, as the Germans did with many state-owned East German
> >> industries after reunification, can yield significant net benefits to
> >> the public. The difficult problems involve the complex combinations
> >> of competition and rent seeking found in industries like broadcasting,
> >> mining, railroads, etc.
> >>
> >...and look at those former 'communist' countries roar!
>
> I am. You should try it.
They are pathetic...
>
> >The West Germans
> >took over the East Germans like predators with their control over the
Mark,
> >and the East German's dependence upon public benefits (like pensions that
> >were destroyed with the invasion). Today, the west is quite a bit richer
> >then the East.
>
> ?? But nowhere near as much richer as it was on the day of
> reunification. Hello?
They valued different things, so direct materialist comparisons are not
quite accurate. Many East Germans have complained about the West's
takeover, and there have been comments from East Germans that they missed
the comradely from the old 'socialist' system.
xenman
wrote:
>Say country X is considering to privatize their water supply. The buyers
I remember reading an article a few years back in Forbes Magazine
(The Captialist Tool). The article compared a group of socialist
water systems with a simlar group of capitalist water systems in
California. Both types of systems received their water from the
same source. Their study showed that on average water bought
from the capitalist systems cost less that that of the socialist
systems. The primary reason was that the capitalist systems had
fewer employees.
It seems that when socialists get to be in charge, they can't resist
the urge to pad payrolls with an excess number of employees (my
opinion). It's an attractive idea to think that if you can eliminate
the profit motive that you're actually reducing costs, but in the
real world you end up doing the opposite.
ro...@telus.net
wrote:
><ro...@telus.net> wrote in message news:3f539245...@news.telus.net...
>> On Sun, 31 Aug 2003 20:58:46 GMT, "smithaa02" <MaL...@chorus.net>
>> wrote:
>>
>> >What economic rent?
>>
>> The economic rent of the resource. If you don't know what that means,
>> consult Google.
>
>Semantic gobbledygook.
Translation: you don't know what you are talking about, and refuse to
learn.
>> >The people that own the property are using the
>> >property!
>>
>> ??? No they aren't. They're selling a resource to consumers.
>
>When I use my computer I am not paying rent to myself to use such. If I
>were, what would I be paying it in? Yen, Euros, Dollars?
?? Let me know if you ever have anything sensible to say.
>> >You can't pay rent to yourself.
>>
>> But you can collect economic rent from others.
>
>Public and public are sort of the same.
Nope. Not when some of the public collect from others.
>> >When the capitalist comes, buys
>> >up public property, and resells it back for profit, now that is economic
>> >rent.
>>
>> Please consult a good dictionary of economics.
>You are hung up on trifles and are missing my elementary points,
Your elementary points are inane and/or counterfactual, on the rare
occasions when they are even comprehensible.
>that being
>to sell externally and then rebuy back internally is not good, because of
>profit motives and zero-sum mechanisms.
But those are not the real reasons. The proft motive exists whatever
you do, so it is not relevant. The zero-sum problem exists for a
reason: what is being sold is a rent collection privilege. _That_ is
the problem. Not the sale, but the associated _privilege_.
>> >>However, there is also an element of capital investment
>> >> and resource management, in which private administration is widely (if
>> >> not entirely accurately) considered more effective than public.
>> >
>> >The kernel that is traded, however is zero-sum, and there will always be
>> >(with privatization/profiteering) exploitation. Now if the private
>company
>> >does some extra filtering, or what not, this is separate from the kernel
>> >(that being the aquifer, piping, and processing plant).
>>
>> No. The aquifer was there with no help. The pipes and processing
>> facilities had to be produced by labor.
>
>Surely the groundwater should belong to the public then, no?
Yes. And _that_ is the problem. Not the sale to outsiders, but the
sale of a public resource to _anyone_ for less than a fair price.
>> >Any improvements
>> >are separate, and are things the public could do as well, should property
>be
>> >in their care.
>>
>> That is the question.
>
>Nothing is stopping water-filtering company X from selling their wares to a
>public water utilities.
But that is just one side of the equation, and not enough to ensure
honest and competent management of those utilities.
>> >If your theory were correct, then used car salesmen
>> >wouldn't mark up cars, stock brokers wouldn't collect commissions, and so
>> >on.
>>
>> ??? Who would devote their time to buying and selling used cars for
>> zero wage? Who would execute stock trades all day for free?
>
>Now we're getting somewhere! Who would bother to buy groundwater, only to
>sell it back at the same price?
?? No one. But you seem to think the underlying problem is simply
that fact of human nature, when the underlying problem is obviously
(to any honest, thinking person) the _privilege_ that transforms human
nature into an instrument of oppression.
>> >The profit motive is THE motive of capitalism. All business's collect
>> >(or plan to get) profits. To believe otherwise is a fantasy. The idea
>that
>> >business will compete with business is a self-defining definition. No
>race
>> >to the bottom for them!
>>
>> And yet, businesses go broke all the time.
>
>You totally miss the point.
Nope. Your "point" is just inane. Of _course_ businesses plan to
make profits. Just as people don't work for nothing. In both cases
they'd rather not have to compete, but in the absence of
government-granted monopolies, they usually do.
>> >All is made worse, by the fact that not all wealth
>> >is variable, but much wealth is static (zero-sum), such that if London
>> >privatizes their tube, competition is NOT going to tear up streets,
>piping,
>> >wiring, etc to put in their own tube.
>>
>> Right. There is an element of natural monopoly in many businesses.
>> But not all. Not even most.
>
>All businesses will have an element of a monopoly.
Silliness.
>Zero-sum economics
Which you just made up...
>establishes the framework from which all variable sum economics must grow,
>therefore there will always exist these elements in all businesses.
Except that they don't.
>> >One of the chief reasons, the water supply can't be sold and bought in
>the
>> >capitalist fashion, is that there is not infinite money.
>>
>> Incoherent.
>
>I'll dumb it down for you...
Oh, no, don't make it any dumber! Please!
>You don't acquire commodity X, but you acquire
>the money to buy commodity X, and then you acquire commodity X. A two bit
>deal, not one bit as envisioned by economist.
Nonsense.
>Money has to come from
>somebody else... Now for you to have this money, third person Y, must not.
>He will only unload money for your use if there is something in it for him
>(profits, exploitation).
You forgot voluntary exchange for mutual benefit...
>The selling and rebuying puts pressure on the
>money supply, and gives the money changers profits.
No, actually, it doesn't.
>The only way to avoid this would be to have an infinite currency system,
>such that every contribution reflected an universal credit, and each
>consumption represented a debit, such that the money supply could grow with
>the economy.
?? Almost any money supply can grow with the economy.
>> >I can't bid for
>> >the water supply for I have no money, which means only the few can bid,
>and
>> >this will lower the price it will fetch for the public.
>>
>> Are you referring to the Willing to Accept/Willing to Pay problem?
>
>I'm referring to the problem that I don't exist to the seller's auction, and
>yet do exist in the aspect that I'm parting with my share of the water
>supply.
I _think_ you are trying to express the WTA/WTP problem. You might
want to learn something about it.
>> >> >Isn't this true for all examples of privatization?
>> >>
>> >> No. Privatizing natural resources or monopolies will normally be an
>> >> outright loss to rent seeking, but privatizing competitive business
>> >> operations, as the Germans did with many state-owned East German
>> >> industries after reunification, can yield significant net benefits to
>> >> the public. The difficult problems involve the complex combinations
>> >> of competition and rent seeking found in industries like broadcasting,
>> >> mining, railroads, etc.
>> >>
>> >...and look at those former 'communist' countries roar!
>>
>> I am. You should try it.
>
>They are pathetic...
Not as pathetic as your ignorance of conditions there.
>> >The West Germans
>> >took over the East Germans like predators with their control over the
>Mark,
>> >and the East German's dependence upon public benefits (like pensions that
>> >were destroyed with the invasion). Today, the west is quite a bit richer
>> >then the East.
>>
>> ?? But nowhere near as much richer as it was on the day of
>> reunification. Hello?
>They valued different things, so direct materialist comparisons are not
>quite accurate.
Wrong. Try talking to some of them.
>Many East Germans have complained about the West's
>takeover, and there have been comments from East Germans that they missed
>the comradely from the old 'socialist' system.
Yeah. From the Party aparachiks.
The vast majority are _much_ happier with their current lives of
relative freedom and abundance.
-- Roy L
smithaa02
news:a9f9lvoc0micm2vpp...@4ax.com...
smithaa02
> On Mon, 01 Sep 2003 22:11:05 GMT, "smithaa02" <MaL...@chorus.net>
> wrote:
> >that being
> >to sell externally and then rebuy back internally is not good, because of
> >profit motives and zero-sum mechanisms.
>
> But those are not the real reasons. The proft motive exists whatever
> you do, so it is not relevant. The zero-sum problem exists for a
> reason: what is being sold is a rent collection privilege. _That_ is
> the problem. Not the sale, but the associated _privilege_.
tower, to which I billed customers for quantity consumed, that would be as
exploitative as a rent based system (to which water was recycled). Rent vs
consumption... Same deal. If I sell public wealth, then buy it back, then
the external buyer must profit, to which he therefore gets wealthier, but
since nothing really happened, the rest of the populace had to suffer to
finance trader X's income gain.
> >Surely the groundwater should belong to the public then, no?
>
> Yes. And _that_ is the problem. Not the sale to outsiders, but the
> sale of a public resource to _anyone_ for less than a fair price.
Indeed a serious problem! But if there exist profit motives, there will
really never be a fair price. Again, used car salesmen don't buy used cars
to sell them at the same price. All businesses take a markup or profit from
their endeavors. Privatizing water being no different, else no one would bid
on it. The profit motive is also problematic with labor, as a business will
only hire you, if you give them more profits. This is also most problematic
with bond sales at the Fed, where the Fed privatizes then buys back bonds
all the time giving enormous profits to the 22 bond dealers through bond
markups (else the bond dealer would never buy).
> >Now we're getting somewhere! Who would bother to buy groundwater, only to
> >sell it back at the same price?
>
> ?? No one. But you seem to think the underlying problem is simply
> that fact of human nature, when the underlying problem is obviously
> (to any honest, thinking person) the _privilege_ that transforms human
> nature into an instrument of oppression.
So you think public should never privatize anything? Should the public
'nationalize' that which it had privatized directly or indirectly in the
past?
> >> >The profit motive is THE motive of capitalism. All business's collect
> >> >(or plan to get) profits. To believe otherwise is a fantasy. The idea
> >that
> >> >business will compete with business is a self-defining definition. No
> >race
> >> >to the bottom for them!
> >>
> >> And yet, businesses go broke all the time.
> >
> >You totally miss the point.
>
> Nope. Your "point" is just inane. Of _course_ businesses plan to
> make profits. Just as people don't work for nothing. In both cases
> they'd rather not have to compete, but in the absence of
> government-granted monopolies, they usually do.
Even if they do compete... Can you see businesses idly buying and selling
wares for the same price under a mythical perfect competition world? To do
so they would have to use money, which has a cost (direct or opportunity),
which would result in them losing money. Obviously that can't happen.
> >Zero-sum economics
>
> Which you just made up...
It was in a descriptive context...
> >establishes the framework from which all variable sum economics must
grow,
> >therefore there will always exist these elements in all businesses.
>
> Except that they don't.
Take a zero-sum economical component like land... If I and my buddies own
the earth, that means you can't own anything. You need land to live, so you
pay rent to use my land to live on and grow crops. I collect your labor in
turn. Zero-sum economics forms the base (in this case land), to which the
likes of variable wealth such as labor can be commandeered.
> >> >One of the chief reasons, the water supply can't be sold and bought in
> >the
> >> >capitalist fashion, is that there is not infinite money.
> >>
> >> Incoherent.
> >
> >I'll dumb it down for you...
>
> Oh, no, don't make it any dumber! Please!
>
> >You don't acquire commodity X, but you acquire
> >the money to buy commodity X, and then you acquire commodity X. A two bit
> >deal, not one bit as envisioned by economist.
>
> Nonsense.
Maybe this is why you're not understanding how gold can be counterfeited.
> >Money has to come from
> >somebody else... Now for you to have this money, third person Y, must
not.
> >He will only unload money for your use if there is something in it for
him
> >(profits, exploitation).
>
> You forgot voluntary exchange for mutual benefit...
You don't get it. Those who start without must acquire from those who have.
Those who have will only part ways with wealth, if there exist greater
wealth to replace it. Money is no different. The problem is you purchase
money for a profit to the money seller. Nothing voluntary about it.
> >The selling and rebuying puts pressure on the
> >money supply, and gives the money changers profits.
>
> No, actually, it doesn't.
It takes money to buy the water table. My demand for money is a demand that
others don't have money. Therefore they will only sell me money to buy the
aquifer at a profit. I must pass on my cost to my town customers, else I
would be in the red. The towns people then see a price raise for their water
all thanks to the wonders of privatization.
> >The only way to avoid this would be to have an infinite currency system,
> >such that every contribution reflected an universal credit, and each
> >consumption represented a debit, such that the money supply could grow
with
> >the economy.
>
> ?? Almost any money supply can grow with the economy.
Who cares if the money supply grows in quantity with aggregate consumption,
if the money supply isn't distributed equally? Using your logic if an
economy needed to grow %150, then a counterfeiter could supply a *1.5
increase. The universal credit device would solve this failure of the
inability of an economy to grow without misallocating created money.
> >> >I can't bid for
> >> >the water supply for I have no money, which means only the few can
bid,
> >and
> >> >this will lower the price it will fetch for the public.
> >>
> >> Are you referring to the Willing to Accept/Willing to Pay problem?
> >
> >I'm referring to the problem that I don't exist to the seller's auction,
and
> >yet do exist in the aspect that I'm parting with my share of the water
> >supply.
>
> I _think_ you are trying to express the WTA/WTP problem. You might
> want to learn something about it.
I went googling, but came up empty. Help me out.
ro...@telus.net
wrote:
><ro...@telus.net> wrote in message news:3f54fa07...@news.telus.net...
>> On Mon, 01 Sep 2003 22:11:05 GMT, "smithaa02" <MaL...@chorus.net>
>> wrote:
>> >that being
>> >to sell externally and then rebuy back internally is not good, because of
>> >profit motives and zero-sum mechanisms.
>>
>> But those are not the real reasons. The proft motive exists whatever
>> you do, so it is not relevant. The zero-sum problem exists for a
>> reason: what is being sold is a rent collection privilege. _That_ is
>> the problem. Not the sale, but the associated _privilege_.
>That makes no sense... If I bought the water and sucked it up into my water
>tower, to which I billed customers for quantity consumed, that would be as
>exploitative as a rent based system (to which water was recycled). Rent vs
>consumption... Same deal.
What you describe _is_ a rent-based privilege system, because there is
no possibility to compete.
>If I sell public wealth, then buy it back, then
>the external buyer must profit, to which he therefore gets wealthier, but
>since nothing really happened, the rest of the populace had to suffer to
>finance trader X's income gain.
Right. As long as there is no competition, nothing else can happen,
it is a zero-sum situation, and the buyer is just pocketing economic
rents.
>> >Surely the groundwater should belong to the public then, no?
>>
>> Yes. And _that_ is the problem. Not the sale to outsiders, but the
>> sale of a public resource to _anyone_ for less than a fair price.
>Indeed a serious problem! But if there exist profit motives, there will
>really never be a fair price.
Garbage.
>Again, used car salesmen don't buy used cars
>to sell them at the same price. All businesses take a markup or profit from
>their endeavors.
And there is nothing unfair about that, as long as they are not
privileged to exclude others from competing with them, etc.
>Privatizing water being no different, else no one would bid
>on it.
The key point is that others cannot come in and compete.
>The profit motive is also problematic with labor, as a business will
>only hire you, if you give them more profits.
That is not a problem. That is how wealth is created.
>This is also most problematic
>with bond sales at the Fed, where the Fed privatizes then buys back bonds
>all the time giving enormous profits to the 22 bond dealers through bond
>markups (else the bond dealer would never buy).
I agree. But again, this is a problem of rent seeking, as the Fed
also controls the currency, and no one can compete with it.
>> >Now we're getting somewhere! Who would bother to buy groundwater, only to
>> >sell it back at the same price?
>>
>> ?? No one. But you seem to think the underlying problem is simply
>> that fact of human nature, when the underlying problem is obviously
>> (to any honest, thinking person) the _privilege_ that transforms human
>> nature into an instrument of oppression.
>So you think public should never privatize anything?
That is of course not what I said. Many publicly owned industries can
usefully be privatized, as has happened in the former East Germany.
But many cannot.
>Should the public
>'nationalize' that which it had privatized directly or indirectly in the
>past?
In some cases, yes. But not all.
>> >> >The profit motive is THE motive of capitalism. All business's collect
>> >> >(or plan to get) profits. To believe otherwise is a fantasy. The idea
>> >that
>> >> >business will compete with business is a self-defining definition. No
>> >race
>> >> >to the bottom for them!
>> >>
>> >> And yet, businesses go broke all the time.
>> >
>> >You totally miss the point.
>>
>> Nope. Your "point" is just inane. Of _course_ businesses plan to
>> make profits. Just as people don't work for nothing. In both cases
>> they'd rather not have to compete, but in the absence of
>> government-granted monopolies, they usually do.
>Even if they do compete... Can you see businesses idly buying and selling
>wares for the same price under a mythical perfect competition world?
They sometimes do so now. Or even at a loss. They just don't _plan_
on doing so.
>To do
>so they would have to use money, which has a cost (direct or opportunity),
>which would result in them losing money. Obviously that can't happen.
Obviously it _does_ happen. Just not intentionally. Hello?
>> >establishes the framework from which all variable sum economics must
>grow,
>> >therefore there will always exist these elements in all businesses.
>>
>> Except that they don't.
>Take a zero-sum economical component like land...
I don't know what it means to say land is "zero-sum." Land is a
natural resource that cannot be augmented by labor, and is a canonical
example of monopoly rent collection, but the existence of the rent
would seem to argue it is not "zero-sum." What exactly do you mean by
"zero-sum"?
>If I and my buddies own
>the earth, that means you can't own anything.
?? No, I can own anything that isn't the earth, as well as any part
fo the earth that I can buy from you.
>You need land to live, so you
>pay rent to use my land to live on and grow crops. I collect your labor in
>turn. Zero-sum economics forms the base (in this case land), to which the
>likes of variable wealth such as labor can be commandeered.
You are just using idiosyncratic words to describe this situation,
which is fairly well understood as rent collection.
>> >You don't acquire commodity X, but you acquire
>> >the money to buy commodity X, and then you acquire commodity X. A two bit
>> >deal, not one bit as envisioned by economist.
>>
>> Nonsense.
>Maybe this is why you're not understanding how gold can be counterfeited.
What I don't understand is how _real_ gold can be "counterfeit."
>> >Money has to come from
>> >somebody else... Now for you to have this money, third person Y, must
>not.
>> >He will only unload money for your use if there is something in it for
>him
>> >(profits, exploitation).
>>
>> You forgot voluntary exchange for mutual benefit...
>You don't get it.
I get it far better than you.
>Those who start without must acquire from those who have.
>Those who have will only part ways with wealth, if there exist greater
>wealth to replace it.
Right. It's called "producing."
>Money is no different.
OTC, it is very different. You are not allowed to print your own
money. You _are_ allowed to produce your own wealth.
>The problem is you purchase
>money for a profit to the money seller. Nothing voluntary about it.
?? Garbage. What is _in_voluntary about it?
>> >The selling and rebuying puts pressure on the
>> >money supply, and gives the money changers profits.
>>
>> No, actually, it doesn't.
>It takes money to buy the water table. My demand for money is a demand that
>others don't have money.
??? Incoherent.
>Therefore they will only sell me money to buy the
>aquifer at a profit. I must pass on my cost to my town customers, else I
>would be in the red. The towns people then see a price raise for their water
>all thanks to the wonders of privatization.
Because there is no competition.
>> >The only way to avoid this would be to have an infinite currency system,
>> >such that every contribution reflected an universal credit, and each
>> >consumption represented a debit, such that the money supply could grow
>with
>> >the economy.
>>
>> ?? Almost any money supply can grow with the economy.
>Who cares if the money supply grows in quantity with aggregate consumption,
>if the money supply isn't distributed equally?
?? An equally distributed money supply would be completely useless.
>Using your logic if an
>economy needed to grow %150, then a counterfeiter could supply a *1.5
>increase.
Not legally.
>The universal credit device would solve this failure of the
>inability of an economy to grow without misallocating created money.
Gobbledegook.
>> >> >I can't bid for
>> >> >the water supply for I have no money, which means only the few can
>bid,
>> >and
>> >> >this will lower the price it will fetch for the public.
>> >>
>> >> Are you referring to the Willing to Accept/Willing to Pay problem?
>> >
>> >I'm referring to the problem that I don't exist to the seller's auction,
>and
>> >yet do exist in the aspect that I'm parting with my share of the water
>> >supply.
>>
>> I _think_ you are trying to express the WTA/WTP problem. You might
>> want to learn something about it.
>I went googling, but came up empty. Help me out.
I don't have a URL handy for you, but Stephen Fromm, an active poster
here, sent me the following a couple of weeks ago. Gaffney is a
professor of economics at UC Riverside.
-----------------------------------------------------------------------
How Distribution Dominates Allocation
and
The Use of Coasianism to Pretend Otherwise
(an excerpt from Mason Gaffney, "What Price Water Marketing?
California's New Frontier," AJES 56(4):475-520 (October, 1997). Notes
and bibliography are at the end.)
Entitlements, the Public Trust Doctrine, and Allocation
Correct economic analysis has to presume or prove something about who
should own water: either a public trust doctrine, or a giveaway
doctrine. "Entitlements" - the initial assignments of property
rights - have a major effect on the relative bargaining power of
different parties. For years, economists would ask, say, canoers what
they as individuals would pay to keep a river wild. They got rather
low valuations, and duly reported them as the value of recreation.
This was an effective defensive strategy for dam builders.
One day it occurred to some unsung genius to invert the question: ask
not what canoers would pay for the wild river; ask what the power
company would have to pay the canoers to take it away from them. The
second question presumes that canoers, as citizens, already own the
wild river. In fact, the citizens do (not just canoers, but all
citizens).
In the current lingo, one arguing ex parte the canoers stresses that
canoers' WTA (Willingness to Accept) is the relevant dollar value, and
it is higher, perhaps much higher, than their WTP (Willingness to
Pay). (WTA is also called a "compensation-demanded valuation.") In
its basic CERCLA legislation, 1980, the U.S. Congress specified it
wanted measurements of WTA, not WTP (Carson & Navarro, 1988, p. 830).
Many pollster-theorists fret that "received theory" has "been unable
to explain ... the persistently observed differences between WTP and
WTA measures." (Cummings et al., 1986 p.41.) The problem is that
"received theory" was received damaged.
Pro-privatizing economists dismiss the matter by alleging that WTP =
WTA (Mitchell and Carson, 1981), so entitlements don't matter. They
lean on Ronald Coase, perhaps overlooking the qualifications he put in
the fine print. Distribution doesn't matter, only allocation matters.
Then just start the game of "Free Market" and deal: everything works
out so long as private property rights are firm. Resources end up
allocated the same, no matter who starts the game with all the chips,
because WTP = WTA.
That is wrong. An owner often says "My home is not for sale. I will
not sell at any price, don't call again." She can take that attitude
when she holds the entitlement. Buyers never say "I will pay any
price, call anytime." That is, WTA is much higher than WTP.
"Modern" micro-economics, dominated by Coasians, is a reincarnation of
the old Manchester School whose members prescribed "free trade in
land" as the solution to all resource problems. The trade they called
"free" was to begin with entitlements inherited from centuries of
conquest, corruption, stealing, confiscation, negligence, covin and
fraud. In this narrow view, exchange launders all. Everything is for
sale; everyone has his price; all values are determined at the margin;
etc.
Mitchell and Carson use Coasian concepts in survey research: they
poll people to put a value on environmental damages. One review
faulted "the high rate of unusable responses" (Fischhoff, p.287). Why
"unusable"? Mitchell and Carson throw out WTA answers when they
exceed WTP answers by more than 5% (Mitchell and Carson, 1981, 1988;
see also Mitchell and Carson, 1989, pp. 32-34, 226). Sometimes over
50% of the responses are "invalid." They don't fit the Coase model;
they must be, in Carson/Mitchell's phrases, "methodological
artifacts," or "outliers," or "protest responses," or "aberrations."
The aberrational aborigines are an object lesson. Some Indian tribes
have Treaty Rights to fish. Their WTP for those rights is minimal,
partly because their ATP (Ability To Pay) is minimal. On the other
hand, they will not sell "at any price": their WTA is sky-high. They
may be unreasonable, but that's the point: ownership lets you be as
unreasonable as you please, and call it "revealed preference." We
notice mainly when it is someone else, especially someone different.
Politics and institutions are involved: Treaty Rights are the most
valuable mode of holding property there can be. They enjoy legal
supremacy as high as The Constitution itself (Article VI, Section 2),
preempting contracts and ordinary legislation. All those, and other
important institutional and sociological considerations are outside
the "perfect-markets" ambit of Carson and Mitchell.
American Indians are an extreme case, but most of us have a streak of
their psychology. Not many generations back we share the same kind of
culture, a dependence on traditional lands we held in common, in
implied trust for our descendants. These traditions are still part of
the cultural subconscious, and affect current attitudes. They are
disregarded in mechanistic micro modeling in the modern style (except
perhaps as tautological "revealed preferences").
Economists who belittle the question of entitlements deserve the
paranoia they evoke in environmentalists. The proper answer to them
is, "If entitlement doesn't matter, give it all to me: then let's
talk." Most of them want to give it, fully laundered, to whatever
private party has a license now.
(snip)
NOTES on "How Distribution dominates Allocation," an excerpt from
Mason Gaffney, "What Price Water Marketing? California's New
Frontier," AJES 56(4):475-520 (October, 1997).
[I don't have the note references, but IMO the material is interesting
-- and entertaining -- in its own right. -- RL]
1. These authors, under color of technical analysis, actually base
their findings on the political premise that no pump tax should be
considered unless the result is to raise overlying farm land rents and
prices. Their model is tailored to the west side of Kern County,
California, province of a few giant landowners whose political power,
and militant opposition to metering water use, are well known.
2. In Ivanhoe the USSC rejected the doctrine that the state holds
water in trust specifically for excess landowners, opining instead
that "The project was designed to benefit people, not land" (357 U.S.
296). In Sporhase v. Nebraska (1982) it rejected the use of trust
doctrine to stop interstate transfers. I do not presume to enter the
technical side of the law of trusts, but neither decision seems to
have inhibited the flowering in the 1980s of the public trust doctrine
to protect instream uses. In all three instances, the courts seem to
be sorting things out as well as I could ask.
3. The point is made in Herfindahl and Kneese, 1965, rpt. 1974, p.287.
4. Comprehensive Environmental Response, Compensation and Liability
Act.
5. Hanemann (1991) uses "received theory" to refute Carson/Mitchell et
al.
6. In the 1981 work they find the difference is only 1%. They cite
this approvingly, 1989, pp. 32-33.
7. For a flagrant example of the genre see Wahl, p.130. Economists
today are trained to toss this off without thinking, and even come to
believe it themselves.
8. It's called the "contingent valuation method," or CV, because the
questions are hypothetical.
9. Mitchell and Carson (1989) are a challenge to decipher. The "fine
print" is scattered. It comes down to this, however. High-valued
answers to WTA questions are an "artifact," and not "meaningful."
"WTP and WTA should be within 5% of each other ..." (pp. 22-23,
emphasis supplied). To say "I want an extremely large ... amount of
compensation for agreeing to this" is a "protest answer," and they
trash it. 50% or more of all answers are often such "protest"
answers. These answers are "outliers" (p.34). They remove "outliers"
either outright or by using statistical devices that have the effect
of discounting them (p.226).
10. The case is something like that of NASA's Goddard Space Flight
Center and why they missed detecting the ozone hole before Farman
found it in 1985. "Their instruments had recorded the losses (of
ozone), but the computer interpreting the results had been programmed
to ignore readings that deviated so far from normal" (BW, 22 July 91,
p.10).
11. "In 1989 RFF received increased support from the corporate sector
for the third consecutive year. This growing support illustrates an
appreciation ... for the role RFF plays in ... environmental
policymaking" (RFF Annual Report, 1989, p.45). The list of supporters
includes most of the major oil and utility polluters that CERCLA is
designed to control.
12. Status-quo theory is shaken to the foundation by survey findings
that WTA>>WTP. Its criterion for acceptable policy changes is based
on Pareto's and Edgeworth's notion that you mustn't deprive one rich
landowner, even to help a thousand starving orphans, because you can't
compare their subjective feelings. When, however, we acknowledge
common birthrights to a clean environment, the shoe is on the other
foot. Now you can't pollute anyone's air or water because the victims
own it. They can be as unreasonable as any great landlord. This
explains the busy-ness of theorists seeking to plug the dike.
13. Another large group to consider are the rural Hispanics of the
southwest, who put a high value on preserving their communities. A
survey in Taos and Questa, N.M., found 80.6% were "Opposed and don't
want to sell." Only 6.1% answered yes to "Would sell if price is
right" (Brown and Ingram, p.79). We are talking here about very poor
people and very expensive water.
14. It was 1974 when a survey first showed WTA>>WTP, "in contradiction
to received theory (i.e. Coase)." This sent dozens of professors
scurrying to torture the data until it confessed otherwise, and save
Coase. Mitchell and Carson slog through a long literature survey,
apparently impartially, but in the end find ways to stick with WTP
after all (1989, pp. 37-38).
15. Some paranoia may be in order. According to Carson and Navarro
(p. 830), Congress wanted measurements of WTA for CERCLA, but the
U.S.D.I. overrode Congress and used WTP because of the "admitted
difficulty by economists of measuring WTA ..." That seems to say that
economic consultants overrode the Congress of the United States by
snowing them with technicalities!
16. That cuts at the root of the Pareto concept that is used as a
bulwark against challenges to concentrated private property.
According to Pareto, nothing may be changed if anyone is injured,
unless that person be compensated. Only win-win changes are allowed,
beginning from the status quo. The influence of rent-takers has
worked this idea into the center of economic theory.
-- Roy L
xenman
On Wed, 03 Sep 2003 04:20:31 GMT, "smithaa02" <mal...@chorus.net>
wrote:
And why is a city owned water system, in other words socialist,
not a "public system". What I described was two water supply
systems, one privately owned by capitalists, and one publicly
owned (socialist) by a city. What part of this don't you understand?
Tell me, and I'll try to write it in clearer language.
smithaa02
> On Wed, 03 Sep 2003 05:19:12 GMT, "smithaa02" <mal...@chorus.net>
> wrote:
> >> wrote:
> >> >that being
> >> >to sell externally and then rebuy back internally is not good, because
of
> >> >profit motives and zero-sum mechanisms.
> >>
> >> But those are not the real reasons. The proft motive exists whatever
> >> you do, so it is not relevant. The zero-sum problem exists for a
> >> reason: what is being sold is a rent collection privilege. _That_ is
> >> the problem. Not the sale, but the associated _privilege_.
> >That makes no sense... If I bought the water and sucked it up into my
water
> >tower, to which I billed customers for quantity consumed, that would be
as
> >exploitative as a rent based system (to which water was recycled). Rent
vs
> >consumption... Same deal.
>
> What you describe _is_ a rent-based privilege system, because there is
> no possibility to compete.
In order to compete, you have to have a motive to do so. No profits = no
motives. Plus with finite money, there will always be these types of
problems... Money can be thought of as being bought and sold. Those
without money, buy money for 4 units of labor, sell money for 2 units of
labor. If I don't have the
money to sell to get the water table, then I'm out of luck to those who do.
Privatization favors those with money.
> >If I sell public wealth, then buy it back, then
> >the external buyer must profit, to which he therefore gets wealthier, but
> >since nothing really happened, the rest of the populace had to suffer to
> >finance trader X's income gain.
>
> Right. As long as there is no competition, nothing else can happen,
> it is a zero-sum situation, and the buyer is just pocketing economic
> rents.
Competition is zero-sum. You undercut your competitors to steal profits at
their expense. Now competition is not going to undercut themselves into a
stupid price war, to where they both earn 0% rate of return on capital, for
what would be the point of that, and they might as well figuratively let the
fields lay fallow. Since 0% rate of return isn't possible this puts upwards
pressure on all profit levels, thus sort of nullifying competition. Like
land, money is zero-sum. If you have it, somebody else does not.
> >> >Surely the groundwater should belong to the public then, no?
> >>
> >> Yes. And _that_ is the problem. Not the sale to outsiders, but the
> >> sale of a public resource to _anyone_ for less than a fair price.
> >Indeed a serious problem! But if there exist profit motives, there will
> >really never be a fair price.
>
> Garbage.
...and yet you wouldn't let someone use 'your' property unless there was
something (that being profit) in it for you. Perpetual profits for
eternity!
> >Again, used car salesmen don't buy used cars
> >to sell them at the same price. All businesses take a markup or profit
from
> >their endeavors.
>
> And there is nothing unfair about that, as long as they are not
> privileged to exclude others from competing with them, etc.
Isn't it curious where we have freely competing used car salesmen and yet
there are
still markups? Exclusion = property rights = monopoly.
> >Privatizing water being no different, else no one would bid
> >on it.
>
> The key point is that others cannot come in and compete.
Most troublesome indeed!
> >The profit motive is also problematic with labor, as a business will
> >only hire you, if you give them more profits.
>
> That is not a problem. That is how wealth is created.
Just as wealth was created when slaves produced more then they consumed in
food and lodging!
> >This is also most problematic
> >with bond sales at the Fed, where the Fed privatizes then buys back bonds
> >all the time giving enormous profits to the 22 bond dealers through bond
> >markups (else the bond dealer would never buy).
>
> I agree. But again, this is a problem of rent seeking, as the Fed
> also controls the currency, and no one can compete with it.
The Fed controls additions and subtractions to the top portion of the
currency, but not control as in they can take it out of your wallet. Most
currency is in private hands, and that is most troublesome.
> >> >Now we're getting somewhere! Who would bother to buy groundwater, only
to
> >> >sell it back at the same price?
> >>
> >> ?? No one. But you seem to think the underlying problem is simply
> >> that fact of human nature, when the underlying problem is obviously
> >> (to any honest, thinking person) the _privilege_ that transforms human
> >> nature into an instrument of oppression.
> >So you think public should never privatize anything?
>
> That is of course not what I said. Many publicly owned industries can
> usefully be privatized, as has happened in the former East Germany.
> But many cannot.
Privatizations in East Germany was a disaster, as their economy collapsed,
when the West took over.
> >Should the public
> >'nationalize' that which it had privatized directly or indirectly in the
> >past?
>
> In some cases, yes. But not all.
...they should be made public, for errors must be corrected, else they
compound.
> >> >> >The profit motive is THE motive of capitalism. All business's
collect
> >> >> >(or plan to get) profits. To believe otherwise is a fantasy. The
idea
> >> >that
> >> >> >business will compete with business is a self-defining definition.
No
> >> >race
> >> >> >to the bottom for them!
> >> >>
> >> >> And yet, businesses go broke all the time.
> >> >
> >> >You totally miss the point.
> >>
> >> Nope. Your "point" is just inane. Of _course_ businesses plan to
> >> make profits. Just as people don't work for nothing. In both cases
> >> they'd rather not have to compete, but in the absence of
> >> government-granted monopolies, they usually do.
> >Even if they do compete... Can you see businesses idly buying and selling
> >wares for the same price under a mythical perfect competition world?
>
> They sometimes do so now. Or even at a loss. They just don't _plan_
> on doing so.
There are marketing tricks to mark down intentionally like for obtaining
customer flow, or obtaining market
share, but these are besides the points, for they all ultimately funnel into
markups and profits.
> >To do
> >so they would have to use money, which has a cost (direct or
opportunity),
> >which would result in them losing money. Obviously that can't happen.
>
> Obviously it _does_ happen. Just not intentionally. Hello?
Semantic wordplay. Businesses are profit machines, as they are designed
that way, to which they will only lose money on breakdowns, to which they
are discarded.
> >> >establishes the framework from which all variable sum economics must
> >grow,
> >> >therefore there will always exist these elements in all businesses.
> >>
> >> Except that they don't.
> >Take a zero-sum economical component like land...
>
> I don't know what it means to say land is "zero-sum." Land is a
> natural resource that cannot be augmented by labor, and is a canonical
> example of monopoly rent collection, but the existence of the rent
> would seem to argue it is not "zero-sum." What exactly do you mean by
> "zero-sum"?
Your gain is another's lose. All materiality (AKA land) is finite. To own
the earth means, everyone else doesn't. That's zero-sum, and where supply
and demand breaks down.
> >If I and my buddies own
> >the earth, that means you can't own anything.
>
> ?? No, I can own anything that isn't the earth, as well as any part
> fo the earth that I can buy from you.
Let's see what you can do in a vacuum, eh? Now sure you can buy from me!
But at MY prices, such that I would never do anything to hurt my profit
margins. Various slaves were offered the ability to work for their freedom.
Since the price is set by the slave owner this is going to be messed up, and
in reality the real issue is whether you should have to pay the owner
anything for that which wasn't of his labor.
> >You need land to live, so you
> >pay rent to use my land to live on and grow crops. I collect your labor
in
> >turn. Zero-sum economics forms the base (in this case land), to which the
> >likes of variable wealth such as labor can be commandeered.
>
> You are just using idiosyncratic words to describe this situation,
> which is fairly well understood as rent collection.
How do you define rent collection? There are situations where zero-sum
properties will affect consumables, to which isn't really a rent collection
situation.
> >> >You don't acquire commodity X, but you acquire
> >> >the money to buy commodity X, and then you acquire commodity X. A two
bit
> >> >deal, not one bit as envisioned by economist.
> >>
> >> Nonsense.
> >Maybe this is why you're not understanding how gold can be counterfeited.
>
> What I don't understand is how _real_ gold can be "counterfeit."
Its exchange value is counterfeit.
> >> >Money has to come from
> >> >somebody else... Now for you to have this money, third person Y, must
> >not.
> >> >He will only unload money for your use if there is something in it for
> >him
> >> >(profits, exploitation).
> >>
> >> You forgot voluntary exchange for mutual benefit...
> >You don't get it.
>
> I get it far better than you.
In the water example, where is the mutual benefits? There is none! It is a
one way street.
> >Those who start without must acquire from those who have.
> >Those who have will only part ways with wealth, if there exist greater
> >wealth to replace it.
>
> Right. It's called "producing."
As the serf produces for the lord, who has the land. Using your logic, one
would never be hurt by government expansion of the money supply, for others
can just 'produce' for what they need, thus ignoring the real wealth fee one
must pay to acquire money.
> >Money is no different.
>
> OTC, it is very different. You are not allowed to print your own
> money. You _are_ allowed to produce your own wealth.
The inability to create your own money causes the same problems as having
others have the exclusive ability to create money. Since money must come
from somewhere, someone is getting rich off unloading it, while others must
suffer to acquire such.
> >The problem is you purchase
> >money for a profit to the money seller. Nothing voluntary about it.
>
> ?? Garbage. What is _in_voluntary about it?
Well, I suppose you could starve to death, just as a slave could refuse work
and be beaten to death.
> >> >The selling and rebuying puts pressure on the
> >> >money supply, and gives the money changers profits.
> >>
> >> No, actually, it doesn't.
> >It takes money to buy the water table. My demand for money is a demand
that
> >others don't have money.
>
> ??? Incoherent.
There exist finite money in the economy, correct? This money is distributed
to various people. For, one without money, to have it they must take away
from another who does, right? Why does one freely part with their wealth?
If there is profit in it for them. So the money seller will obtain profit
like from interest charges or. They will sell high and buy low, such that
they sell one dollar for 4 units of labor and then they will sell that
dollar for 6 units of labor, for two units profit.. Whatever the action, it
will not negatively impact the wealth holder, because he should do what is
in his best interest.
> >Therefore they will only sell me money to buy the
> >aquifer at a profit. I must pass on my cost to my town customers, else I
> >would be in the red. The towns people then see a price raise for their
water
> >all thanks to the wonders of privatization.
>
> Because there is no competition.
Competition is supply coming in to meet demand set price levels. Various
zero-sum mechanisms (finite land, capital, money, bargaining dynamics,
economies of scale wealth, certain regulations, intellectual property, and
so on.) will determine that supply can't be increased. Therefore
competition is a no go.
> >> >The only way to avoid this would be to have an infinite currency
system,
> >> >such that every contribution reflected an universal credit, and each
> >> >consumption represented a debit, such that the money supply could grow
> >with
> >> >the economy.
> >>
> >> ?? Almost any money supply can grow with the economy.
> >Who cares if the money supply grows in quantity with aggregate
consumption,
> >if the money supply isn't distributed equally?
>
> ?? An equally distributed money supply would be completely useless.
Says something about money! Now with infinite money you sell to a universal
balance statement to obtain credits, and you buy to debit them. Trades are
between members, where the supply for money rises and falls accordingly,
with proper distribution.
>Using your logic if an
> >economy needed to grow %150, then a counterfeiter could supply a *1.5
> >increase.
>
> Not legally.
They're called banks.
> >The universal credit device would solve this failure of the
> >inability of an economy to grow without misallocating created money.
>
> Gobbledegook.
Aliens land on earth and create an island in the Pacific. Technically they
are in US jurisdiction, so they have to use dollars. You're saying they
wouldn't lose wealth to acquire dollars to circulate amongst themselves?
Thus, our current system misallocates, and ignores true need.
> >> >> >I can't bid for
> >> >> >the water supply for I have no money, which means only the few can
> >bid,
> >> >and
> >> >> >this will lower the price it will fetch for the public.
> >> >>
> >> >> Are you referring to the Willing to Accept/Willing to Pay problem?
> >> >
> >> >I'm referring to the problem that I don't exist to the seller's
auction,
> >and
> >> >yet do exist in the aspect that I'm parting with my share of the water
> >> >supply.
> >>
> >> I _think_ you are trying to express the WTA/WTP problem. You might
> >> want to learn something about it.
> >I went googling, but came up empty. Help me out.
>
>.
So it seems I'm not the first to come up with this! Now what they are
ignoring is that there are no two way transactions, but three way with
money. As the transaction is created, there exist increased demand on money
which leads to high prices for money, which leads to more profits for money
unloaders. Also, businesses do things for profit, as they acquire low, and
sell high. GE won't pay market price for their washers (say privatized new
government washers), for there would be no profit.
Tim Worstall
Really ? Depends on how you draw the boundaries of the system.
Two sellers are competing for the customs of the buyer. Net effect is
that the buyer gets the better deal when there are two or more
sellers.
If that was all that happened, indeed a zero sum game. Just that
profits have moved from the seller to the buyer.
And what then continues to happen ? The sellers continue to compete
for buyer number 2, three, all the way to 6 billion people on hte
planet. And such comeptition cannot happen just on price....but on
service, desirability, new features, improved quality, new
technology....youknow, those things that make each generations
products better and cheaper than those available before.
And this is most definately not zero sum.
Sellers still make profits, yet everything we buy is better / cheaper
than it was before.
You undercut your competitors to steal profits at
> their expense.
As above, you do a great deal more than that. You design or invent new
ways of doing things in order to beat your competitors. And that
process of advancing technology is not zero sum. It is positive.
We had an interesting comparison of various ways of encouraging such
technological advances : Capitalism v State Direction in the USSR. One
detailed example would be a Lada Zhiguli as opposed to a 1990
Fiat....say a Punto.Roughly the same cost. But the Punto was 20 years
advanced in technology ( perhaps more....the Zhiguli was based on
1960's Fiat technology ). What was the major difference ? Fiat faced
competition and Lada did not.
It's one of the better arguments in favour of a competetive
market.....that while if it were static, one would indeed just be
moving the pieces round the board, the actual incentives in the system
ensure that it is not static, and this impels technology forward.
Better than any other system we have so far found outseide " Total War
".
Now competition is not going to undercut themselves into a
> stupid price war, to where they both earn 0% rate of return on capital, for
> what would be the point of that, and they might as well figuratively let the
> fields lay fallow.
This would be true if the companies could limit competition. That is
if they were a monopoly or oligopoly. And most industries aren't. It
happens all the time that competition drives profits down to zero or
less when somebody else outcompetes them. So they go bust . Or take
another technological leap.
Since 0% rate of return isn't possible
Sure it is. Negative rates of return are possible as well. They're
called " losses ". Just read the airline accounts. Some airlines make
profits . Others don't. Some go bust , others don't. As Warren Buffet
famously pointed out, the entire industry , from Wright Brothers to
now, has not made a positive rate of return on capital.
this puts upwards
> pressure on all profit levels, thus sort of nullifying competition.
As above, this part is nonsense.
Like
> land, money is zero-sum. If you have it, somebody else does not.
>
> > >> >Surely the groundwater should belong to the public then, no?
> > >>
> > >> Yes. And _that_ is the problem. Not the sale to outsiders, but the
> > >> sale of a public resource to _anyone_ for less than a fair price.
> > >Indeed a serious problem! But if there exist profit motives, there will
> > >really never be a fair price.
> >
> > Garbage.
>
> ...and yet you wouldn't let someone use 'your' property unless there was
> something (that being profit) in it for you. Perpetual profits for
> eternity!
>
> > >Again, used car salesmen don't buy used cars
> > >to sell them at the same price. All businesses take a markup or profit
> from
> > >their endeavors.
> >
> > And there is nothing unfair about that, as long as they are not
> > privileged to exclude others from competing with them, etc.
Quite.
>
> Isn't it curious where we have freely competing used car salesmen and yet
> there are
> still markups? Exclusion = property rights = monopoly.
Ermmmm......you seem to have missed one of the basic points of
economics. There are limited resources, and unlimited wants.
This means that in general you would expect the overall rate of return
to be positive....if you cannot make a profit doing what you are, then
there are other unsatisfied wants out there that you should be able to
make a profit satisfying.....and this goes on for ever,or until all
human wants and desires ( please note this is not the same as needs.
Some needs cannot be satisfied by economic means, and those that can
be are essentially so in modern rich countries ) are satisfied out of
the resources available.
>
> > >Privatizing water being no different, else no one would bid
> > >on it.
> >
> > The key point is that others cannot come in and compete.
>
> Most troublesome indeed!
>
> > >The profit motive is also problematic with labor, as a business will
> > >only hire you, if you give them more profits.
You might also note that you only go to work for a business if you get
more out of it than you would working on your own. You can go back to
a hunter gatherer style of life anytime you want : a modern version of
it would be dumpster diving. Most but not all of us make the
calculation that working for Walmart ( for example ) at $ 7.50 an hour
is a better deal than living rough, whatever the level of Walmart's
profits.
So it is just as true to say that you will only go to work for a
business if you are better off than living rough. So, again, it's not
a zero sum game.
> >
> > That is not a problem. That is how wealth is created.
>
> Just as wealth was created when slaves produced more then they consumed in
> food and lodging!
And then people noted that even more wealth could be created by
freeing the slaves, as productivity of labour increased.
>
> > >This is also most problematic
> > >with bond sales at the Fed, where the Fed privatizes then buys back bonds
> > >all the time giving enormous profits to the 22 bond dealers through bond
> > >markups (else the bond dealer would never buy).
> >
> > I agree. But again, this is a problem of rent seeking, as the Fed
> > also controls the currency, and no one can compete with it.
>
> The Fed controls additions and subtractions to the top portion of the
> currency, but not control as in they can take it out of your wallet. Most
> currency is in private hands, and that is most troublesome.
>
> > >> >Now we're getting somewhere! Who would bother to buy groundwater, only
> to
> > >> >sell it back at the same price?
> > >>
> > >> ?? No one. But you seem to think the underlying problem is simply
> > >> that fact of human nature, when the underlying problem is obviously
> > >> (to any honest, thinking person) the _privilege_ that transforms human
> > >> nature into an instrument of oppression.
> > >So you think public should never privatize anything?
> >
> > That is of course not what I said. Many publicly owned industries can
> > usefully be privatized, as has happened in the former East Germany.
> > But many cannot.
>
> Privatizations in East Germany was a disaster, as their economy collapsed,
> when the West took over.
Slight misnomer here. The E German economy had already collapsed. As
had the rest of the Soviet style ones.
You're missing what Roy is saying ( Good grief !!1, me ? Agreeing with
Roy ? Somebody look out for flying pigs ). Businesses plan to, hope
to, desire to, make markups and profits ( not the same thing at all by
the way ). But in the real world their plans do not always come to
fruition . Why ? Becasue other businesses hace the same desire, and
sometimes they do it better....it's called competition you see.
>
> > >To do
> > >so they would have to use money, which has a cost (direct or
> opportunity),
> > >which would result in them losing money. Obviously that can't happen.
> >
> > Obviously it _does_ happen. Just not intentionally. Hello?
As Roy said. Do you ever watch the news ? Ever see " Company X
announced $ 500 million in losses this year ? " What do youmean "
Obviously that can't happen "?
>
> Semantic wordplay. Businesses are profit machines, as they are designed
> that way, to which they will only lose money on breakdowns, to which they
> are discarded.
>
> > >> >establishes the framework from which all variable sum economics must
> grow,
> > >> >therefore there will always exist these elements in all businesses.
> > >>
> > >> Except that they don't.
> > >Take a zero-sum economical component like land...
> >
> > I don't know what it means to say land is "zero-sum." Land is a
> > natural resource that cannot be augmented by labor, and is a canonical
> > example of monopoly rent collection, but the existence of the rent
> > would seem to argue it is not "zero-sum." What exactly do you mean by
> > "zero-sum"?
>
> Your gain is another's lose. All materiality (AKA land) is finite. To own
> the earth means, everyone else doesn't. That's zero-sum, and where supply
> and demand breaks down.
Again, depends on how you define the boundaries of your system.
USSR there was no private ownership of land. In the USA there is (
although still a huge amount of Govt owned land ). In one country
there were food shortages. In the other, surpluses. That does not
suggest that land ownership is such a zero sum game. Whenever you try
and define something as a zero, positive or negative sum game, you
have to be very careful about where the limits of the system are.
>
> > >If I and my buddies own
> > >the earth, that means you can't own anything.
> >
> > ?? No, I can own anything that isn't the earth, as well as any part
> > fo the earth that I can buy from you.
>
> Let's see what you can do in a vacuum, eh? Now sure you can buy from me!
> But at MY prices, such that I would never do anything to hurt my profit
> margins.
If you are able to insist on your prices or no goods, then you are a
monopoly.
Different rules then.
Both supply and demand are variable. So you're talking tosh.
Err....I sell things to GE ( not washers ).....and believe me they pay
market price.
Tim Worstall