Posts Tagged 'mutualism'

Profit of Privilege

As I stated in a previous post I agree with Gary Chariter and other left-libertarians when they decry capitalism on the grounds that most people conceive of it in a way that is not actually associated with a freed-market. However, initially I was somewhat resistant to this position because I felt like we did have a society in which, while the government was intrusive in many ways, did maintain some semblance of a free market. I have come to realize that government intrusion is not the exception in the economy, it is the norm, and really there is no market which is not affected by some government action. Also most of the government action, while usually given a purpose that sounds good, is largely a hand out to big business in one way or another.

One way the government intrudes in a market is to enhance the economies of scale and remove diseconomies of scale. For instance, large companies can afford to hire lawyers to lobby congress for privileges, get around the complex patent and tax codes, and comply with licensing requirements (some increased economies of scale). Small companies still have advantages in that they may be more nimble in adjusting to changes, able to customize better for the individual consumer and not have large transportation costs (some diseconomies of scale the government tries to remove). These government actions work to increase the overall firm size beyond what would be the optimum in a purely free market. All that government action costs money, so we get larger businesses and higher costs to the consumer.

It is usually thought that the government is a necessary tool for aiding the poor, and largely I think libertarians are silent on this issue. It is hard to argue that a government who directly gives money to the poor is not in some way helping them. I would argue though that while it does appear on the face of it that they are doing good, they actually on net do more harm to the poor in various other ways. The government raises the cost of a lost of items in modern markets, not just via taxation, but licensing requirements, and monopoly copyright laws. Also the distribution of land to government-favored persons hurts the poor who would otherwise be able to live off the land so to speak. I also largely try to make people who support government programs “designed” to aid the poor see that there is another side to the issue in that the government must forcefully take the money from some who do not wish to give it (I for one would rather give it to a more efficient private charity of my choosing). Also as many Austrian economists have pointed out, inflation also hurts the poor the most because of at least two reasons, that the prices of the consumer goods go up not necessarily in proportion to their wage, and because the money is first given to people who are well-connected to government and the first people to get the money are able to use the new money to buy things at prices before they have time to adjust to the new money.

What follows is a video of Gary Chartier describing how he thinks we can address the problem of health care for the poor while avoiding a system of government take-over.

I find his arguments to be extremely compelling. Surely freed-market advocates have been making similar arguments for decades, but his emphasis on the ways in which the poor are systematically disadvantaged when it comes to health care is to my taste. Also check out what some of the Mutualists have to say about the profits of privilege, it is surely amazing how un-free a market we have at present.


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