Prometheus 6

There seems to be some confusion here.

Money flows to opportunity like water flows downhill. It's not news. And it is the free market.

I'm sure Adma Smith would recognize the laissez-faire nature of the government interventions of China and the USofA.

There is no free market.

It's correct that the USA puts up its own barriers to the flow of money.

However, these aren't particularly relevant when discussing the relationship between Walmart and China. Consider the extreme. Some unnamed country enslaves its entire citizenry (except for a few government officials). The slaves are provided with a minimal existence, and put to work in factories. The goods are sold on the open market, and are cheaper than the competition.

Now if Walmart or you or I buy those goods, that's the free market in action. The free market, the flow of money, is amoral.

The free market, the flow of money, is amoral.

I don't see the equivalence that would make "the free market" and "the flow of money" interchangeable.

But the free market is, indeed, amoral. Quite the concise statement of what's wrong with using free market principles to run a government and/or society.

I don't see the equivalence that would make "the free market" and "the flow of money" interchangeable.

Would it seem different if it were "the free flow of money"? Do you see the free market as something other than the free flow of money?

Quite the concise statement of what's wrong with using free market principles to run a government and/or society.

There exist two major forces in modern life: money and government. People with sufficient money tend to trust the power of money. Money is a defensive thing, it keeps other people and to some extent even the government from exercisiing power over one's person without consent. Normally such people use the power money in a benign fashion, for example to compel the restaurant waiter to treat them well. People without sufficient money tend to resent the power that money holds over them, and look to government for protection. They feel they have more control over government than over money, and thus they seek to transfer money from people who have it to the government (which in turn gives some to them, reducing the tension between those who have and those who do not have money).

The only thing keeping government in check (given the natural tendency for everyone to vote themselves money from the national treasury) is that people with money create more people with money (from people without money), and that's good. People without money don't create people with money, and that's bad.

So voting for more taxes does not yield increased prosperity, as the discrepancies between the US and Europe so well illustrate. Increased taxes can "even things out", by making the average income far less; it never results in overall improvement.

All that said, if people are literally starving to death, they're going to become a threat to all those monied people nearby, so we're motivated to create the "safety net". When the safety net is well managed, it becomes an important facet of modern civilization. When it becomes a way of life for an underclass, it has failed. So yes, we can't run government purely to aid the flow of money, we occasionally have to divert a bit. (one of several examples of why I'm not a big-L Libertarian).

Do you see the free market as something other than the free flow of money?

I see them both as non-existant...rhetoric, conceptual filters.

Is there really free flow on money? Is there really a market in existence that isn't maintained by government action?

The only thing keeping government in check (given the natural tendency for everyone to vote themselves money from the national treasury) is that people with money create more people with money (from people without money), and that's good.

Trickle-on down economics is proven bullshit.

Trickle-on down economics is proven bullshit.

What can be observed as a universl truth is that societies which do not impede the flow of money are more prosperous than those which do impede the flow of money.

Is there really a market in existence that isn't maintained by government action?

Good flow of money requires an infrastructure maintained by the government. A court system to ajudicate disputes and establish predictable precedent. A legal system to punish theft. A currency which is protected from counterfeiting. We've also benefitted by the existence of the interstate highway system, which allows a full semi-trailer of stuff to be delivered from pretty much anywhere in the country to pretty much anywhere else, within two weeks or less, for around $2000 or less. That is money flowing. Those goods gained more than $2000 in value over the trip. No other economy is that efficient, transportation wise. Not even close.

So agreed, it's not that we might oppose government, but prosperity arises from that flow of money.

What can be observed as a universl truth is that societies which do not impede the flow of money are more prosperous than those which do impede the flow of money.

Then say that instead of claiming people with money create more people with money from people without money. That's like claiming corporations want deregulation to increase competition.

That's like claiming corporations want deregulation to increase competition.

The problem is, corporations don't want deregulation as defined by the dictionary. They want deregulation as described by THEM. Which means, usually, that we will divide the company into two parts, the regulated part, and the deregulated part. The regulated part protects them from competition.

When someone proposes _real_ deregulation, they're there to oppose it.

==
I really like the new background color.

I really like the new background color.

 I went for legibility instead of "Hey I LIKE that color!"

Then say that instead of claiming people with money create more people with money from people without money.

It's seldom a primary goal, but it's what really happens, and in two ways:

1. Hiring. A person without money but willing/able to learn to be valuable will, over time, be converted into a person with money.

2. Business opportunity. Sometimes straight out, sometimes over time. A person with money represents a market for what you're selling. They are willing to pay more for your products, enabling you to make more profit, and become a person with money.

The primary flow of money is mostly through various forms arbitrage. Capitalists buy stuff here and sell it there. This is the "flowing of money like water flows downhill". In order to play that game, you indeed have to start with some money. But these capitalists connect buyers and sellers in ways which improves the lives of both. By definition. If they don't improve things, they can't make any money. If they're not offering the seller a better price, the seller will sell elsewhere. If they're not offering the buyer a better price, the buyer will buy elsewhere.

And the better it works, the more people with money are created. People involved in transportation and warehousing and administrating the arbitrage. People who specialize in various niches along the way, providing value and tapping into that stream of money flowing by.

And wealth?

Because wealth is what matters. 

Economics has a problem that is fundamentally different than cosmology or global warming. The problem is that the objects of economics (people, markets) are constantly changing. Instead of starting with physical law and working up to a model, economics starts with an observation (e.g., market reaction) and then guesses what other observations might have to do with it.

Using the current method of "observe and guess", it's literally impossible for economists to create an accurate, persistent model because the objects of economics are always changing (e.g., different mixes of firms and individuals, tax laws change, political events). In order to do any better, economists would have to first disaggregate individuals, firms, funds, currencies, etc.., and understand how each different type of market participant actually functioned in response to various inputs. In other words, they would have to start all over from scratch. It's just not worth it. It would be better to turn economists into glue or something and not have to listen to their nonsense anymore.

As for the superstitious who uncritically pay heed to economic dogma...,

"Then say that instead of claiming people with money create more people with money from people without money.

It's seldom a primary goal, but it's what really happens..."

Has
it?  We're experiencing Version II of the implementation of supply
side economic theory.  Where is the empirical data suggesting that
supply side economics functions to create more people of wealth? 
All I can see is the worst economic
recovery since WWII, stilted job creation, and wages not commensurate
with
inflation.

Taken out of the abstract and examined under the harsh
light of reality, trickle down theory is a proven failure. 
Supply side economics serves to enrich those who are already top
earners; it does little to nothing for everyone else, particularly
African Americans.

We're experiencing Version II of the implementation of supply
side economic theory.

 I'm
not sure what "supply side economic theory" or "trickle down theory"
are, exactly.  I heard the terms used by Ronald Reagan but I don't
think they match up to what I'm saying.  "Enabling the flow of
money" is the goal.  GW Bush is only partially committed to doing
that, no more so than Bill Clinton.

 One good thing about
enabling the flow of money is that we know exactly what it is, and we
know how to see it.  If there's some law or tax or unavailable permit impeding your and
my ability to do business, that's an impediment to the flow of money.

In
India and Mexico, and probably more than a few other countries, the
nominally rather free flow of money is dramatically  obstructed by
corruption.  The permits might not cost much and might have
reasonable conditions, but you have to pay off the officials to get them. 
The cost for a phone might be reasonable, but you have to pay off the
phone company to get one. Then, if you succeed, there's some more
people there with their hand out, and they're empowered to make your
live miserable if you don't pay off.  Call it what you like, but
the lower classes of India and Mexico are the worst losers in this
corruption, because very few businesses can survive such a gauntlet,
meaning that there isn't much money flowing by.

I'm
not sure what "supply side economic theory" or "trickle down theory"
are, exactly.  I heard the terms used by Ronald Reagan but I don't
think they match up to what I'm saying.

What you said here matches precisely. (BTW folks, behind the date and time of the comment lurks an anchor you can link to).

 "Enabling the flow of
money" is the goal.

Whose?

Those who get the flow which does NOT trickle down.

<i> I'm
not sure what "supply side economic theory" or "trickle down theory"
are, exactly.</i>

They are the theories that you are advocating, despite your "free flow of money" obfuscation.

 <i>If there's some law or tax or unavailable permit impeding your and
my ability to do business, that's an impediment to the flow of money.<i>

And so now taxes are conflated with corrupt permit schemes?  Are
you seriously arguing that taxation equals corrupt post-colonial
governmental systems?  I should hope not. 

Whose?

If random person A conducts a business transaction with random person B, that's money flowing.

If there's some law or tax or unavailable permit impeding your and
my ability to do business, that's an impediment to the flow of money.

And so now taxes are conflated with corrupt permit schemes? 

 I
was referring to taxes specific to doing business.  Sales tax is
one such tax, but there are worse.  Real estate transfer taxes
come to mind. Taxes on the transfer of yachts.  The kind of taxes
which stifle business transactions.

"The kind of taxes
which stifle business transactions."

Then
any and all taxes would stifle business transactions in your
conception.  Income taxes keep me from being able to purchase more
disposable junk; taxes on the proceeds of state lottery winners keep
them from being able to purchase more disposable junk.

What taxes don't stifle business transactions, according to you?

And
again, can we elevate the conversation from the amorphous, lofty and
impossibly simplistic supply side economics claims and instead discuss
a factual analysis of what actually works well in this country? I'm
surprised that in the Bushist context of reductions in taxes on passive
income, and various and sundry pro-corporate measures, you are unable
to back up your arguments with solid data indicating that these
measures have (1) increased the number of wealthy people in this
country; (2) helped the middle or working classes, at all; or even (3)
point to the long-term fiscal health of the US economy.  Facts,
please.

What taxes don't stifle business transactions, according to you?

Consider the word stifle for a moment. It doesn't imply inconvenience, it implies substantial effect.

In the USA, we generally do not face taxes which stifle business transactions.

 you are unable
to back up your arguments with solid data indicating that these
measures have (1) increased the number of wealthy people in this
country; (2) helped the middle or working classes, at all; or even (3)
point to the long-term fiscal health of the US economy.  Facts,
please.

Percentage wise, far more Americans are wealthy than in Europe.

Average wealth in the USA, including wealth controlled by working classes, vastly exceeds all other "ordinary" countries. 

And
we have the comparative tax structure to thank for that wealth. 
Europe does have taxes which stifle business transactions, and its
basic tax structure, while falling below "stifle", is nonetheless
substantial.  In most of Europe, the value of something to a buyer
must exceed the value to a seller by at least 17%, or no transaction
occurs.  How many sales are passed over because the buyer was only
willing to pay 5% more than the seller was asking? 

"Percentage wise, far more Americans are wealthy than in Europe."

 That's
not what I asked.  I asked in the context of this country, which
has seen recent measures intended to decrease taxation on passive
income and pass measures designed to benefit corporate interests, where
is your data, your proof, that these measures serve to increase the
number of wealthy people, benefit the middle and working classes, and
enhance the long-term economic health of this country.  Surely,
economic data from this country should support your theoretic
assertions, right?

"Consider the word stifle for a moment. It doesn't imply inconvenience, it implies substantial effect."

In
your previous comment, you stated that taxes on luxury items (yachts)
serve to stifle business transactions.  Why would you carve out
this subset of consumer transactions and claim that sales taxes on the
wealthy are unhealthy for our economy, yet argue that sales taxes on
everyone else are a mere inconvenience.  Incoherent.

 As
for your continuous attacks on European countries, have you similarly
studied countries like Norway, or are you limited to the "socialist"
caricature of countries like France?

I asked in the context of this country, which
has seen recent measures intended to decrease taxation on passive
income and pass measures designed to benefit corporate interests, where
is your data, your proof, that these measures serve to increase the
number of wealthy people, benefit the middle and working classes, and
enhance the long-term economic health of this country.  Surely,
economic data from this country should support your theoretic
assertions, right?

In the margin, it's hard to demonstrate cause and effect.

In the sum, it's easy.

In
your previous comment, you stated that taxes on luxury items (yachts)
serve to stifle business transactions.  Why would you carve out
this subset of consumer transactions and claim that sales taxes on the
wealthy are unhealthy for our economy, yet argue that sales taxes on
everyone else are a mere inconvenience.  Incoherent.

Transaction
taxes have little effect at 5%, start breaking transactions at 10%, and
become stifling around 50%.  A while back Japan had a 100%
transaction tax on the transfer of real estate.  The result was
that real estate seldom changed hands.  So-called "luxury taxes"
tend to be transaction taxes, and have the effect of stifling
transactions.  That's why they're so pernicious. While they seem
to be purely taxes on the rich, they end up blocking the vital flow of
money.

Income taxes, for comparison, have little effect below 25%, and become stifling at around 60%. 

As
for your continuous attacks on European countries, have you similarly
studied countries like Norway, or are you limited to the "socialist"
caricature of countries like France?

Most
people would consider Norway more socialist than France, but I suppose
one is entitled to supply one's own criteria.  In any case, an
observation of relative prosperity does not in any sense constitute an
"attack".  Some people prefer to live where the monetary gradient
is less steep than in the USA. A place where everyone is less
prosperous, but especially so at the top.  It seems more a community,  you know. It sure ain't me, but to each his own.