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Michael Shermer - The Mind of The Market
Posted: 27 April 2008 05:19 AM   [ Ignore ]   [ # 31 ]
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thoughtsurfer - 26 April 2008 09:37 PM

Libertarians care about nobody.

According to Wikipedia,  Libertarianism is a broad spectrum of political philosophies, each sharing the common overall priority of maximum limitation of government combined with optimum possible individual liberty

I actually don’t know that much about libertarianism and just this one link has a lot of detail.

In the United States, libertarianism is claimed to be the philosophy advocated by Thomas Jefferson and several of the Founding Fathers.[5] 

Libertarians strongly oppose government infringement of civil liberties such as restrictions on free [removed]e.g., speech, press, or religious belief or practice), prohibitions on voluntary association, or encroachments on persons or property. Some make an exception when the infringement is a result of due process to establish or punish criminal behaviour

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Posted: 27 April 2008 10:03 AM   [ Ignore ]   [ # 32 ]
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brightfut - 26 April 2008 08:12 PM

If government is going to be involved in the economy it has to allow for people to choose not to use the government service or else individual people have no choice. But what I don’t understand is how letting the government make those decisions is letting individual people choose for themselves.  If I have one vote in 100 million voters, that’s not having a say.

Democratic nations throughout the world *DO* allow people to choose - at least as much so as a shopping-mall owner gives its retailers a choice. In both cases, if you don’t like the overall value you realize from the package of services that you pay for, then you can choose to move to another location. Individual people unhappy about the quality-of-life return they receive from the taxes they pay, can choose to move to another township, or state, or even country. Yes, it’s possible that the market is not providing you your ideal government product, but I face the same problem with retail space and cable service. 
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In both cases, you wont have enough leverage with your individual vote (1 in 300million at the federal level) nor with your individual consumer dollar (similarly a drop in the bucket). In both cases, it takes creativity and ingenuity and work to organize and design another option that the market will buy into whether that market be the market of voters seeking better government or the market of retailers seeking a better shopping-mall. 
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Here’s a personal experience that I’ll share:
Recently, my township decided that it would be a good idea to provide free wireless Internet access service to everyone everywhere in the downtown area of our city. What a great idea. This would be a great convenience personally, but overall, it would also attract a lot of people to our city and downtown area, it would promote business and enterprise, etc etc. ... but Charter Cable and other corporations that want/do make money selling such services for profit objected, and sued the city to prevent the act.  As a result, my quality of life has suffered. I am now all but forced to purchase my Internet service through Charter Cable as part of a package that includes cable television (a service which I don’t want, but have to pay for anyway ... no different than the tax based model of paying for government services that I may or may not <u>directly</u> benefit from).

The irony that my city is “incorporated” does not escape me.

[ Edited: 27 April 2008 10:55 AM by Riley ]
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Posted: 27 April 2008 10:33 AM   [ Ignore ]   [ # 33 ]
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I have a question with regard to what I believe is a common “libertarian” / “conservative” economic world view:

This world view seems to hold that the free-market economy (not necessarily 100% “free” but almost completely free of regulation) provides all people an equal opportunity to succeed, and so whatever wealth and power a private individual acquires in a life-time is necessarily fair and just; as such, the government should not be in the business of taking that money away or taxing this person or restricting the growth of this person’s enterprise—let the “invisible hand of the market” decide weather or not the enterprise should survive or fail. Right? 

Please, someone correct me if I’m wrong.

This world-view, as I see it,  is used as the basis for the political argument that there should be less government involvement in the economy and that taxes should be lower (whatever the tax rate is it seems, this political group will argue for still lower taxes).

So, here’s my problem with this world view: i
In much the same way that King George inherited his government power and authority, most of the world’s wealthiest people have begun their lives with great amounts of inherited wealth (and as such, economic power).  Isn’t it obvious that we do not start off with anything approaching equal opportunity due to the vast descrepencies of how we begin life economically? .. the economic discrepancy among people at the start of life is at least as great today as the political authority discrepancy that existed in England 1776.

And yet, it’s the economic “conservative”/“libertarian” more than any other political block that fights against the inheritance/estate tax (the “death tax”)  ...  Why is that? This tax, if any, should be the one tax I’d think that the economic-libertarian /economic-conservative should be in favor of. It would provide a more just moral basis for their economic world-view, wouldn’t it?

Obviously, I think, Libertarians agree that the government should step-in to protect civil and social liberty. But Liberty is more than simply having the right to choose, in order for liberty to be realized, you must also have the ABILITY to choose. THAT’S freedom.

Without economic independence, liberty can not be realized. If not the government, who will provide equal economic opportunity ? Who is going to ensure that every child born has access to health-care, education, and security on par with the education, health-care, and security of any other child?

This issue seems to me as basic an issue as “one person one vote”.

[ Edited: 27 April 2008 10:51 AM by Riley ]
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Posted: 27 April 2008 11:46 AM   [ Ignore ]   [ # 34 ]
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Riley - 27 April 2008 10:03 AM

Recently, my township decided that it would be a good idea to provide free wireless Internet access service to everyone everywhere in the downtown area of our city. What a great idea. This would be a great convenience personally, but overall, it would also attract a lot of people to our city and downtown area, it would promote business and enterprise, etc etc. ... but Charter Cable and other corporations that want/do make money selling such services for profit objected, and sued the city to prevent the act.  As a result, my quality of life has suffered. I am now all but forced to purchase my Internet service through Charter Cable as part of a package that includes cable television (a service which I don’t want, but have to pay for anyway ... no different than the tax based model of paying for government services that I may or may not <u>directly</u> benefit from).

Don’t know full story.

Here is example in Cincinatti where Time Warner “seems” to be working with local groups to bring free wireless into the downtown.
I don’t know if this ever actually came off…
http://www.broadbandinfo.com/news/time-warner-adopt-hotspot.html

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Posted: 27 April 2008 12:06 PM   [ Ignore ]   [ # 35 ]
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Riley - 27 April 2008 10:03 AM

If you don’t like the overall value you realize from the package of services that you pay for, then you can choose to move to another location. Individual people unhappy about the quality-of-life return they receive from the taxes they pay, can choose to move to another township, or state, or even country.


Forcing people to move in order to have choice seems extreme to me.  The person’s job may be in that town and telecommuting may not be an option.  What if the person has family they need to take care of? 

The solution to retail space is to own your own building.  (Easier said than done, right?) You’ll pay less to own your own building than paying rent in the long run.  Otherwise you face the same problems as someone who rents an apartment instead of owning their own house. 

About Charter Cable, everyone in the tech industry knows how monopolistic the carrier companies are.  They game the system by using the government to serve themselves.  Corporations like free markets when they’re on the way up, but when they have dominance they loose their capitalist free market ideology in favor of monopolies.  The laws need to be changed in your town.  In my town, the city power company is providing Internet service over the power lines.  This is the way to go, since the city is the only one big enough to compete with Comcast and AT&T;.  The consumer still has the choice to purchase services from a large private corporation or from a government service.

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Posted: 27 April 2008 12:48 PM   [ Ignore ]   [ # 36 ]
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Riley - 27 April 2008 10:33 AM

This world view seems to hold that the free-market economy (not necessarily 100% “free” but almost completely free of regulation) provides all people an equal opportunity to succeed, and so whatever wealth and power a private individual acquires in a life-time is necessarily fair and just; as such, the government should not be in the business of taking that money away or taxing this person or restricting the growth of this person’s enterprise—let the “invisible hand of the market” decide weather or not the enterprise should survive or fail. Right? 

I think you make a good point, Riley.  Many of the capitalist ideas such as freedom to choose, a minimum of government interference, and freedom to keep the profit you have earned are good principles.  But, any good principle taken to an extreme with no checks and balances becomes destructive, eventually.  Even with freedom of speech, people are not allowed to yell “Fire” in a movie theater.  The original justification for allowing people to keep profit was the argument that the person deserved to keep the profit because the person expended capital, acquired knowledge, did work, and took risks to make the profit.  Someone who inherits wealth has done none of these things.  How long would libertarians allow for wealth to be transfered from generation to generation?  I don’t believe that a completely unregulated system would make sense or be fair.  A system of regulations that provides a level playing field that would provide for the common good would be best.  However, the danger is that more regulations may not favor the common good since corporations can lobby to get regulations that favor themselves.  The Charter Cable story was a good example of that.  Government regulations have to checked just like everything else.

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Posted: 27 April 2008 01:28 PM   [ Ignore ]   [ # 37 ]
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brightfut - 27 April 2008 12:06 PM

Forcing people to move in order to have choice seems extreme to me.  The person’s job may be in that town and telecommuting may not be an option.  What if the person has family they need to take care of? 

People are not being forced (at least not any more so than they are if they want to get out of an undesirable rental or mortgage agreement, for instance). If the costs/benefits associated with moving are greater that the costs/benefits of staying, then you move, otherwise you don’t. We can assume in a free society that people choose to start a family and get a job in the community that they want to live in, and buyer beware.

Also, don’t kid yourself into believing that people are the owners of the mortgaged home that they live in. The mortgage company is the owner of those homes. For instance, I recently had flood damage to my house, and ALL the insurance payments to repair that damage went to my mortgage company ... not to me.  I had to do all the work in arranging for the repairs and for the design of those repairs, etc, but my mortgage company had all the final say as to whether or not they would release the money to me in order to exact those repairs. It wasn’t until they had inspected all the improvements and repairs that my mortgage company released the money to re-imburse me for my expenses.

Also, how do you think most people (myself included) managed to get a mortgage in the first place? Our home mortgages are subsidized/insured by the American government, otherwise most people couldn’t even get approved to “rent-to-own” their house in the first place. This I think is a good example of a positive government involvement in the economy.

brightfut - 27 April 2008 12:06 PM

The solution to retail space is to own your own building.  (Easier said than done, right?) You’ll pay less to own your own building than paying rent in the long run.  Otherwise you face the same problems as someone who rents an apartment instead of owning their own house. 

Yes, but this theoretical freedom to choose, in reality is not available to most people. Have you ever tried to buy a piece of prime real-estate land in a major downtown area? It requires a rarefied amount of wealth. A similar amount of wealth could buy you a small island country ... which gets back to my point: If you don’t like the lease/government that you are buying into, choose another one. You have that freedom —at least as much so as you do in a non-government involved market.

brightfut - 27 April 2008 12:06 PM

About Charter Cable, everyone in the tech industry knows how monopolistic the carrier companies are.  They game the system by using the government to serve themselves.

  Yes, and in order to game the system, they make a public appeal to the anti-government, anti-regulation, pro-free-market, “libertarian/conservative” political base. Don’t they???? This is my point of criticism about the “libertarian/conservative” political philosophy.

The dominant industry players use the “libertarian/conservative” rhetoric in order to get their preferred people into elected office where they then use government to serve their narrow personal corporate interests at the expense the general welfare (see for example,  the Bush Administration and the Tom DeLay run congress). Pollution, public safety, product life-cycle, and the use of publicly owned natural resources in general (like air, electro-magnetic spectrum, and water) are some of the ways in which a large industry can pawn-off/distribute a cost of doing business onto the general public.

brightfut - 27 April 2008 12:06 PM

In my town, the city power company is providing Internet service over the power lines.  This is the way to go, since the city is the only one big enough to compete with Comcast and AT&T;.  The consumer still has the choice to purchase services from a large private corporation or from a government service.

Well, that’s OK, but what I want is not just a competing for-pay service that I have to connect to from my home, but a “free” wireless service that anyone can connect to from anywhere inside the city, paid for with my taxes.

I want visitors to my community to be able to jack-in without a care about passwords and such. This type of service would be a boon to my community economy I think. It would also save a lot of money in aggregate because such a system that doesn’t have all the administrative overhead costs associated with billing and collection and gate-keeping. Furthermore, it would save our community money because we would own the system, instead of be renting it. Charter charges based on how much value the Internet is worth to its customers, not how much it costs to actually build and run such a system, so as a result we are paying a premium when we could be paying cost, minus the overhead of billing administration.

Yes, we need to change the laws or appoint different judges, which again is back to my main point:  the barrier preventing the passage of these new laws is the activism of those pesky Libertarians! Why should I and my neighbors not be allowed to unite our resources to BUY our Internet service infrastructure, rather than be forced to rent it from Comcast?

Providing everyone with Internet access is also a “liberty” issue I think.  I believe that in order to have an equal opportunity to succeed, kids need equal access to the Internet. People (especially kids) of all economic backgrounds need to have equal access to this service . This type of thing it too important to be left to the whims of a few for-profit media companies that will likely start using its control of the portal to gate my access with self-serving advertising.

[ Edited: 05 May 2008 05:56 AM by Riley ]
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Posted: 27 April 2008 01:35 PM   [ Ignore ]   [ # 38 ]
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brightfut - 27 April 2008 12:48 PM

  I don’t believe that a completely unregulated system would make sense or be fair.  A system of regulations that provides a level playing field that would provide for the common good would be best.  However, the danger is that more regulations may not favor the common good since corporations can lobby to get regulations that favor themselves.  The Charter Cable story was a good example of that.  Government regulations have to checked just like everything else.

It sounds like we are in close philosophical agreement on this. Much more practical than ideological.

Another thing that irks me is when the anti-regulation pundits refer to “regulation” in terms of its amount: as if regulations were a commodity, all the same. Regulation is a technology; regulations are as varied and context sensitive as any other tool.  Regulation as an issue needs to be debated as a matter of design, not as a matter of quantity.

Furthermore, even those reasonable people who grant that regulation is necessary, irk me by making it sound as if regulation were a necessary evil, that it will necessarily make our markets less efficient, but OK, in order to safeguard against criminality or what-not, the burden of regulation must be borne. They couldn’t be more wrong-headed.

As in the case of a traffic intersection,  a well designed system of traffic regulation will make the market-place of cars vying for limited space on the road <u>not only</u> more fair and more safe,  but also more efficient.

All you libertarians out there, say it with me:
“Regulation is a technology. Regulation can and have been used to improve market efficiency.”

Now say it ten more times and find at least one other real life example of this being the case (examples of this are plentiful) and you will be cured of your dogma.

You’re welcome.

[ Edited: 27 April 2008 07:29 PM by Riley ]
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Posted: 27 April 2008 09:55 PM   [ Ignore ]   [ # 39 ]
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People are not being forced (at least not any more so than they are if they want to get out of an undesirable rental or mortgage agreement, for instance). If the costs/benefits associated with moving are greater that the costs/benefits of staying, then you move, otherwise you don’t. We can assume in a free society that people choose to start a family and get a job in the community that they want to live in, and buyer beware.

And what if the seller is a liar?  Too bad for the buyer?  What if the seler is a thug and puts a gun to your head, figuratively or literally?  What about economic arrangments that amount to coercion?  Too bad for the consumer?  What if the choice is between one slum tenement and another slum tenement?  What if your choices are limited by bigots who take your gender or race or religion or whatever else into account when setting a price - if they decide to sell at all?  What if a person is physically restricted in their choices because of a diability?  How do you guarantee the free society without “regulating”?

Sometimes there are only costs, and no benefits, conditioned by coercion and violence.  This is why the libertarian point of view is simplistic and immoral.  It is also most often a covert support of property rights over all other rights, so that libertarians are, in effect, doing PR work for the corporate point of view.

Regulations can and have been used to improve market efficiency.

Supposedly regulation-free markets are as regulated as government-regulated markets.  The question is who sets the regulations and how.  Libertarians want the regulations set by the person who is willing to sink the lowest in order to win.  A free market gave us the dominance of Micosoft and Windows, which are demonstrably inferior as a company and an operating system than the alternatives (not necessarily Apple, but any number of other companies and software options that Microsoft, absent of effective regulation of their practices, quashed).

A market is regulated by definition.  Who do you want regulating markets?

You can even dispense with the whole distorted concept of “regulation” - markets are not so much regulated as ordered.  No government could ever monitor and control all commerce, only provide the structures which tend to improve the chances of fairness in trade.  We will order markets in this way, with differing and competing ideas of what constitutes “fair”, and different ideas of how that fairness can be brought about.  I think it can be brought about by thought and reason and human action.  Libertarians believe in the market fairy, a.k.a. the hidden hand.  In the real world, the market fairy is a rationalization of theft, fraud, extortion, and all the other mechanisms of a “free” market.

If you want to see a real unregulated market in action, look at illegal drugs.  Since they are illegal, there are no government regulations at all, and I think we all know how that market regulates itself.

A system of regulations that provides a level playing field

The level playing field is a myth.  It does not exist, and it cannot exist.  The best we can hope for is some levelling of power, which includes a levelling of wealth.  That amounts to some kind of democracy, which libertarians seem to have no use for, and some kind of socialism, which libertarians actively hate.

find at least one other real life example

It’s too bad that in between tract by Hayek and Freedman students of economics aren’t provided with, say, The Jungle by Sinclair Lewis.  That’s a fine portrait of unregulated industry.

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Posted: 28 April 2008 09:01 AM   [ Ignore ]   [ # 40 ]
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To be fair, I believe that the Libertarian view-point holds that the government cannot be kept isolated from the greed and corruption of powerful corporations. They would argue that government become the tool of the industries it would seek to regulate, and so by giving the government more than a bare minimum authority to regulate commerce (a bare minimum being defined as, for example, regulating against theft) you are in fact providing the means for an out-of-control corporate power, to gain even more power, and since government also has the additional authority to use military force, that’s particularly dangerous.

Personally, I think that the vast, vast majority of corporations are run by people with high moral character who want their company to be a responsible citizen. Unfortunately, the very nature of distributed plausibly deniable responsibility for the consequences of an action (see the Nazis, and related see the Milgram experiements) leads people to do irresponsible things when push comes to shove, and especially when there’s moral uncertainty about consequences of a company policy.

Also, I think that most corporations (i.e. the people that run them) would welcome clear and enforceable rules and regulations for industry, so long as everyone was made to follow them.

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Posted: 28 April 2008 11:47 AM   [ Ignore ]   [ # 41 ]
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This was very disappointing for a PoI podcast—normally so excellent—as it was basically a political ideology masquerading as science. Free markets are a “natural” way for humans to interact? Really? Let’s not forget that in the Soviet Union, “science” declared Marxism the natural state of the human being.

I found DJ—again, normally so good—rather off key here. He made some ridiculous claims, such as there is no free market in Northern Europe. This will come as news to the brokers in the Stockholm Stock Exchange. I also found the zero-sum choice between free markets and “socialism” (here simplistically defined as pretty much everything else) nonsensical. There is, in fact, a perfectly reasonable and workable middle ground: social democracy. This is not socialism a la Cuba, but nor is it unfettered free market libertarianism either. It’s simply a free market bounded by rules (those dreaded “regulations”) that ensure fair practice and protect the public from the inevitable overreaching and excesses of private enterprise. It seems to work rather well in the EU or Canada. But so far to the right has thinking slouched in this country that the word “regulation” is now spat out between the teeth, as if it were synomous with “tyranny” or “statism.”

And let’s not forget that it was deregulation fanaticism that set up the conditions that led directly the S&L;debacle in the 1980s, the Enron and WorldCom fiascoes, and now the looming abyss of the subprime market collapse. What might we deduce from those facts, I wonder? That we need even more deregulation? Would it be “scientific” to argue that?

All in all, a disappointing PoI that, I hope, marks the last time we’ll hear attempts to claim scientific mandate for a particular political ideology.

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Posted: 28 April 2008 01:39 PM   [ Ignore ]   [ # 42 ]
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Trajan117 - 28 April 2008 11:47 AM

it was basically a political ideology masquerading as science.

You’ve decided that your point of view is correct and it’s time for the discussion to stop.  Why stop the discussion?  This would be a great opportunity for you and people who share your belief to convince who knows how many people of your point of view.  Economics is too important an issue to not discuss.

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Posted: 28 April 2008 01:57 PM   [ Ignore ]   [ # 43 ]
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Riley - 27 April 2008 01:35 PM

Much more practical than ideological.

I like the difference you allude to between a pragmatist and an ideologue.  An ideologue would proclaim his/her principles and stick by them without paying a whole lot of attention to what is actually going on or how the principles are being abused (Ayn Rand, Rush Limbaugh).  A pragmatist would have his/her principles but would be mindful of the current situation before applying them.

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Posted: 28 April 2008 05:07 PM   [ Ignore ]   [ # 44 ]
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And what if the seller is a liar?  Too bad for the buyer?

Who is the seller?  The corporation or the marketing person working for the corporation?

Mostly management only tells the marketing people what they need to know.  If there is some problem with the product or it is inferior to a competitor’s there is every chance the marketing people don’t know it.

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Posted: 28 April 2008 09:09 PM   [ Ignore ]   [ # 45 ]
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First, a self-correction: The Jungle is by Upton Sinclair, not Sinclair Lewis - the latter also wrote some good portraits of American life - Main Street, Babbitt, Elmer Gantry among others.

To be fair, I believe that the Libertarian view-point holds that the government cannot be kept isolated from the greed and corruption of powerful corporations. They would argue that government become the tool of the industries it would seek to regulate, and so by giving the government more than a bare minimum authority to regulate commerce (a bare minimum being defined as, for example, regulating against theft) you are in fact providing the means for an out-of-control corporate power, to gain even more power, and since government also has the additional authority to use military force, that’s particularly dangerous.

But that is a cop-out that throws the baby out with the bath water.

If there is no governmental, which is to say public, authority to prevent corporate domination, then what authority is there?  That is why libertarians are anti-democratic: they want to abandon the idea of public control, i.e., abandon the idea of rule by the people.

Personally, I think that the vast, vast majority of corporations are run by people with high moral character who want their company to be a responsible citizen.

I disagree.  The executive who chooses responsibility to society over responsibility to the bottom line is soon fired.  There is a kind of natural selection that leads to corporations being run by people who are either ignorant of the social or ethical issues involved, distort those issues to the benefit of their own consciences (if they have them), or simply do not care about those issues and only want their company and themselves to “succeed”.  People who do irresponsible things are, by definition, irresponsible people.

What might we deduce from those facts, I wonder? That we need even more deregulation? Would it be “scientific” to argue that?

It is a simple task to look at situations where deregulation has occurred and then see what happened afterwards.  In most cases, deregulation leads to economic disaster for the poor, economic suffering for the middle class, and the rich and corrupt getting richer.

There are very few examples of the opposite happening.

Who is the seller?  The corporation or the marketing person working for the corporation?

Or the advertising agency, or the television network, or whoever?  All of the above.  If you oen a TV station and you run an ad for Q-Ray bracelets, you are as much a fraud as the Q-Ray salesman, and the Q-Ray ad production team, and the Q-Ray manufacturers.

Marketing people, from what I can tell, outside of marketing techniques know nothing.  Ask one the time and he’ll try to sell you his watch.

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