The Most Persistent Economic Fallacy of All Time!

[@adulby]

"spending isnt good, producing is good" took a nice shot at Keynes right there. supply economics at its best.

[@jackbrady9738]

spending produces produce tho

[@Yurothehotot]

Supply has no value without demand.

[@logmeindangit]

@@jackbrady9738 spending does not produce. People produce, in order to exchange their labor for something else of value, something that someone else can provide better than they can. For example, let's say one guy knows how to make saws and nails, and another guy knows how to cut lumber. They each see value in the other person's labor, so will either barter to exchange goods and services, or will create a placeholder, money, to represent the value of those goods and services.. Money produces nothing, it just stands as a representation of value, but if confiscated from the person who earned it, as doesna thirf or a government imposing a tax, the confiscator, who has less respect for how that money was earned, because they did not earn it, they only took it from someone else. That taker will not be as careful in negotiating how it is spent. Too often, it is wasted on projects and people who do NOT produce an equivalent return of value for the money given them by the takers, the "thieves." When it is just two people agreeing to a transaction, exchanging their money for something else of value, like cut lumber, saws or nails, they are free to reach a decision, an agreement on what a fair trade would be. When government taxes people, taking money from earners, it did not earn it, it just took it. Since it did not earn it, the value of what effort it took to create that money is not nearly as well respected by government as the person who sacrificed their time and effort, and earned it. Government will often spend that confiscated money in ways that produces nothing but allegiance, as in a bribe. Also, welfare payments produce nothing for government when that money is "spent." The result, though, creates dependence by the welfare recipient, who didn't work for the money - they were given it because they were pitiful. And the pitiful will then come back to government to beg for more "free" (to them) money, and they will produce nothing in return except a dedicated vote for the government people giving them that confiscated, then redistributed money. But what did this do for the person from whom that money was taken? Nothing. In fact, it actually put that person farther behind, because the money they worked for, earned, was taken away from them, so has to be earned all over again. Taxation that does not benefit the taxed is enslavement, forced labor, the fruits of which are taken to become the oroperty of the thief, government. This is an example of how money does not always create production or products. Most of the time it does. The perversion arises when a third party, such as a robber or government, takes money from producers who have earned it, and gives it to people who have not. Certainly the robbers and government didn't earn it, and they produced nothing in exchange for the money they took. And the people receiving money from the thieves do not care where that money came from, ... but they should. They would, if they had honor.

[@MicahErfan]

what no understanding of aggregate demand does to a mf

[@DerDammerung]

​@@logmeindangit you explained that so well. Thank you.

[@evankant5965]

The exact same debate, the exact same arguments found in Bastiat's, "The Broken Window" written in the mid-19th century. It seems that Economic History is progressing in a very slow pace.

[@kcor4]

Or what was true a couple hundred years ago is still true today. Truth doesn't progress or regress; it merely is.

[@m.browne2548]

Agree with both of you but I also feel that these truths are still not being understood and still seem taboo at this time.

[@youtubearchive3668]

Oy vey dont ya know ve invented economics!

[@szczesciejestkoloruczarneg749]

Economics is so hard to understand for so many. To me the hard thing to understand is why is it hard for so many? ://

[@frankk1512]

no one is a destruction of capital for production of capital the other is movement.

[@durwinpocha2488]

"You tend to think, that you're spending someone else's money and you are in a way. But he's spending yours....." Milton Friedman.

[@gibaudrac1]

This guy blows my mind.

[@ericjeon4901]

his argument is very persuasive as it focuses on the value of freedom for citizens

[@Danioton]

Friedman is asserting Say's Law - Growth in the standard of living is due to increases in the ability to produce goods and services that other people are willing to pay for and is not due to consumption itself. Say's Law is often misstated as demand creates its own supply. Anyone can easily look up one of the many English translations of Say's book and find the relevant chapter to read for yourself. Demands are unlimited and spending does not itself create value. To spend one has to produce something of value wanted by someone else willing to exchange their production with you (something facilitated by current/money).

[@krishnanunnimadathil8142]

You mean “supply creates its own demand”, as Say would have put it?

[@bdwWilliams-y7q]

so if no body wanted some thing then why would anybody supply it

[@pioneertech-w5o]

one of Keynes's biggest ideas was that government pay off debt during times of prosperity. Unfortunately, the most fundamental oversight that Keynes had was that the nature of government is not to shrink itself, but to grow itself. A government that has access to the ability to create money will never shrink, nor will it never permanently reduce its debt, regardless of the relative prosperity of the economy

[@user-ze3sg6ix1u]

THANK YOU, no idea how he, or any economist can ignore that people only do what they're INCENTIVIZED TO. When the govt is going into debt with other people's money why the fuck would they care about being responsible?

[@cerebrobeso9660]

I didn't know Friedman was the Incredible Hulk.

[@gambu4810]

What do you mean about this?

[@cerebrobeso9660]

@@gambu4810 the color seems green

[@berictzepeshku3424]

as a simple example - deciding to become an artist or a professional athlete is practically economic suicide in a country like the US in which the safety net is so threadbare. yet millions of people choose to go into these professions all the time knowing full well that the probability of doing that for a living full time is very low. they do it because they enjoy doing the work

[@christopheradderley6902]

Milton specifically refers to being employed in "productive or creative activity". People who allocate money (administrators of large Government programmes) are not by their very nature employed in creative or productive activity. Then you move on to the second debate about market resource allocation vs Government resource allocation and Hayek explained this issue better than many. How can any one person or organisation possess that kind of knowledge and act upon the information either accurately or at the correct time?

[@cm770011]

Christopher Adderley and the finance industry only allocates money therefore making private equity overall a wasteful enterprise for our elites to be pursuing with such dogma

[@christopheradderley6902]

Looking at society as a whole; misallocation of capital resources is arguably hugely wasteful. Either in a public or private capacity. Private equity is arguably less wasteful than pulling choices out of a hat and going for it.

[@solank7620]

Matt Good lord you have it backwards. Private equity does amazing good. Investors do more good than anybody. They take on great risk, and find the best talent with the best ideas. It is very, very, VERY fucking difficult to do this. Especially since you are competing with other intelligent, talented investors. Without investors, there is no Ford. No Apple. No Google. Facebook never becomes anything. And the list is endless. Investors create industries. These people deserve tons of credit. They increase liquidity in the market. They reduce bid:ask spreads. And by competing with other investors, they bid up the price that entrepreneurs can get for their companies, and increase the salaries employees can demand. Investors are some of the people you should be most thankful to in all of society.

[@solank7620]

Cerebral Cinephile There is no guarantee whatsoever that increasing corporate taxes will increase tax revenue. Most likely it would reduce them. Ireland reduced corporate taxes, their revenues went up and the EU bitched about it. You have it absolutely backwards on food stamps and such. I saw Tucker Carlson claim food stamps were a subsidy. This is total bullshit, and a misunderstanding of basic economic mechanics. Food stamps change the opportunity costs of unemployment. They are a penalty. Not some subsidy. Imagine if a state had a basic income of $20,000. Do you want employers would be able to decrease wages? Of course not. They’d have to raise wages because employees wouldn’t be as desperate for jobs.

[@prabhakaranjeyamohan4579]

@@solank7620 Investors invest in companies that makes them money, either that's good or bad to the society is later to be known. Of course they invest in company which might benefit the society but can also may invest in company which would degrade the society like say pharmaceutical companies which sell crappy medicines costing healthcare and our health, lobbying government to promote their products which might be unethical. Just saying goverment or private, good people making good decisions make the society good. And it is a good thing that in a democratic society , people have control over choosing a government which will do better in allocating resources.

[@franticamber]

No one---and I mean NO ONE---articulates the principles of free market economics better than Dr. Milton Friedman. I MISS HIM!!!

[@sandal_thong8631]

I have several economics books by John Kenneth Galbraith, which I think are excellent.

[@Renato4004]

He actually makes a case for direct democracy and small communities goods and serivces. Something that occurrs in Switzerland. The people from that community have the right to vote where to spend the money and how, they would first arrange meetings as it is done in several places, something like the common expenses and then decide the outcome of their spending. Switzerland wouldn't be switzerland only because of their free market, their direct democracy and their direct decision of the laws and public spending is key.

[@zubstep]

To add to your point, the concept described by Friedman here is subsidiarity. You can have subsidiarity without direct democracy, but it seems much more likely to be in practice with direct democracy than without it.

[@BygoneT]

Yeah but direct democracy is a suicidal enterprise if people don't care about politics and factual data. People also tend to get greedy about having more "Freedoms". I don't think it would work in large scale and especially in Murica.

[@sungod9797]

Direct democracy leads to mob rule.

[@GhostSamaritan]

@@sungod9797 How? If anything, representative democracy leads to a mob rule. A bottom-up approach to direct democracy would be superior (i.e. a city has more influence over itself than the state, a state has more influence over itself than the nation, etc.)

[@felixchanthapanya2912]

The EU makes me really sad.

[@burhanjohncena]

The government should not involve itself with economic activity too much, but at least, the government should provide mechanisms to reduce pollution emissions and provide policing and defense.

[@JordanSumberg]

You are the most reasonable person in all of politics and modern discourse.

[@selfishcapitalist3523]

Yes

[@Lexrezende]

Economy should try to become a science again and stop being an ideology, a religion. Economy should substitute homo economicus for homo sapiens and become a serious area, not the hilarious and pathetic bullshit it became.

[@jackbrady9738]

government should: 1. long long term medical research (that free market wouldnt do cuz too risky) 2. defence 3. justice

[@jamesedmonds5693]

My Boss who installs carpet has been charging the same price for 20 years. His only pay increases comes from accepting more work. We were talking to a guy once who owned some rentals who said he just paid some mexicans to install carpet for him and their prices couldnt be beat, then Lonnie told him what he charged per square yard and the owner said he them twice as much. Then lonnie told him about the guarentees he offers, which the mexicans didnt.

[@SilvanoJulio]

This is awsome. I was libertarian during my entire life, in a instinctively way, and I didn't know it. I didn't know this way of thinking existed and It had strong fundations. I am very impresed. I always was the special guy who was born very poor but I always thought as a rich man, even when I was a kid. I didn't like my neiborhood, the way poor people acted, their habits, I wanted to be different. For the past 16 years and currently, here in Argentina, a socialist goverment created millons of poor people that depend on the govemernt help to live. Then they use poor pleople for the reelection, and so on. Now, I am very very well economically thanks to my own effort and I have to pay too much taxes to affort the rest of the poor people that is not able to produce any goods or service. All those theories are present here in Argentina

[@shybandit521]

Most people are instinctively libertarian. Most have to be trained either through education (communist teachers) or through daily life giving you a mindset (I'm poor so I'll always be poor) to become anything else. It's human nature to buy and sell, people always want to sacrifice as little as possible to get something, and gain as much as possible from a sacrifice, and it always hurts on an instinctual level when what you gain from a sacrifice is taken away. For example, no matter how necessary a good road may be to get your bakery more business, it feels like you baked the bread for nothing when you lost a significant portion of your profits on that sale to a government who you barely feel the effects of.

[@gabbar51ngh]

Almost everyone is an individualist when they realise Their Freedom is violated. You can find homosexual socialists suddenly talking like Libertarians when it comes to government banning homosexuality. Individualism Trumps collectivist ideology.

[@DCLNick]

@diurdi I agree with the theory but I'd like to see everyone pursue their goals on an even playing field. I'm not sure it always works that way in practice. I include profit because it tends to accumulate the resource of money towards those that are in the position to profit i.e. existing higher socio-economic groups, and those with money have easier access to resources to pursue their goals. I don't believe the most wealthy are always the most worthy, work the hardest or are the most creative.

[@soumyabhattacharjee6442]

I like his propensity to look at logical extremes (though I don't agree with a lot of his ideas). I tend to look at logical extremes as well, it's an immediate way of judging a logic. My friends hate it when I do that. They confuse it with a straw man 😑

[@adamhammond9985]

Same thing happens to me. It's a formal argument known as reductio ad absurdum. People think it's appealing to extremes but it is not. www.logicallyfallacious.com/tools/lp/Bo/LogicalFallacies/30/Appeal-to-Extremes

[@tiendoan1333]

@@adamhammond9985 You can commit a fallacy but still have a correct conclusion

[@gabbar51ngh]

@@tiendoan1333 he didn't commit a fallacy. When your inherent statement or argument itself is flawed from the very beginning then it's good way to show how ineffective it is by expanding it to show it's not producing any results.

[@RedPillGrimReaper]

True. What you’re talking about is reductio ad absurdum, and the reason people think it’s a logical fallacy is because people have use logical fallacies to make it work most of the time. But if you’re using it while maintaining the framework of the argument, it does not necessarily have to be a strawman

[@truckerfromreno]

I'm so happy we have reached agreement. Much love x

[@branhoff]

Honestly there should be no Corporate tax period. Milton Friedman discusses this point. The problem with corporate taxes is that corporations don't pay taxes. People pay taxes. Corporations simply push their tax burden onto their workers in the form of less jobs or lower wages/benefits or onto consumers in the form of higher prices. When they can no longer do that viably they simply pick up and move. I will reply to this message to extend a few more points. Please be sure to read it :)

[@Griesmer]

"Feds" "loose" $9 Trillion, Do"D" "loose" $2.3 Trillion on just one occasion

[@Kevin-rs6cr]

The principal fallacy is supply-side economics. Giving the super-rich giant tax taxes cuts does not lead to greater investment by the rich it leads to greater savings. One must understand the very important difference between investment in economic terms and investment in financial terms or savings. When one buys a share of stock in a company, or any other existing capital asset, that is not investment in economic terms, that is savings. Supply only increases when new capital is created not when the ownership of existing capital transfers from one person to another. There is already a significant tax advantage to economic investment. When a company takes its profits and reinvests them by hiring people or purchasing capital equipment in order to expand production those expenses are 100% tax-deductible over time. When top marginal personal and corporate income, capital gains, and dividend tax rates are lowered the cost of recognizing profits and using those profits to purchase existing capital becomes more favorable relative to making new investments. It should be clear that this policy is a rent-seeking policy on the part of the super-rich and does nothing to expand the economy. Furthermore the idea that tax revenues are simply frittered away is nonsense. The government makes important investments in education, infrastructure, and basic R&D which would simply not occur if left completely to the private sector. Taxing wealth which is being hoarded by the super-rich and directing it towards necessary public investment can reasonably expected to be an expansionary policy.

[@ModernGameArmy]

Kevin Neeland supply side economics is not a thing. In no economic text book will you find such a phrase

[@Kevin-rs6cr]

en.wikipedia.org/wiki/Supply-side_economics

[@ModernGameArmy]

"In no economic text book" Of course there is a page on Wikipedia

[@Kevin-rs6cr]

I am not sure what your point is. It is covered in the following textbook: www.amazon.com/Principles-Economics-7th-Mankiws/dp/128516587X/ref=sr_1_2?ie=UTF8&qid=1502594262&sr=8-2&keywords=economics+textbook It literally took me 2 minutes to find an economics textbook which discusses supply-side economics.

[@ModernGameArmy]

I can't find anywhere on that page where it mentions anything about supply side economics.

[@elsiegel84]

The fundamental fallacy here is that the government taxes to spend, whereas the opposite is true. The government must spend dollars into existence before they can ever be taxed, and before they can ever be exchanged for bonds. Any notion to the contrary defies logic.

[@hermitoldguy6312]

Govt could levy taxes in wheat, rather than dollars.

[@elsiegel84]

@@hermitoldguy6312 Of course they could and often did under feudalism. Under capitalism only money counts.

[@sandal_thong8631]

Nonsense.

[@PFB1994]

Unfortunately decades of facts won't change their faith in Friedman's ideas.

[@thomasjgallagher924]

Yeah this hasn't stood the test of time, has it?

[@Audiofalcon7]

2) Businesses need accessibility to get people around. Whether it's efficient parking lots of easy to travel roads - accessibility is another major factor that businesses, real estate companies, and more, would invest in. Competition in road production and infrastructure will also allow for creative methods to be built that increases efficiency, safety, as well as lower the cost significantly. Roads *need* the creativity of architects and citizens to help create better travel; it needs a market.

[@Mandibil]

Government spending is always the broken window. Friedman apparnetly coludnt let that one go

[@WJack97224]

Exactly. This fella admitted taxes are theft, which is sin, and so he is attempting to justify sin. Pure lunacy. Thank you Milton for setting this fella straight. Thanks for posting this video. Good on ya mate.

[@khurmiful]

The guy makes a lot of sense, most of the times

[@brekinla]

I have yet to hear the exception, could you enlighten us?

[@gabbar51ngh]

@@brekinla well he wanted fed to let money printer go brr to avoid great depression. Milton's a monetarist. Look up Hayek's views on Milton.

[@MillionthUsername]

The premise in the question is that taking 40% doesn't harm production because that taken money then gets spent. The fallacy is supposing this spending has the same effect as the spending that the producers would have done. But this is false because the producers would spend more on production while the takers spend it more on consumption. This holds true at any level because it's the nature of the act itself. Production is the engine of prosperity, not consumption.

[@jwidja]

There's this guy called Stefan Molyneux, he's what's considered an anarcho-capitalist, similar to Adam Kokesh. He's a philosopher moreso than Friedman who is an economist, but he has some amazing economic presentations. I personally prefer the philosophy he teaches, but I love economics and he has some of the most comprehensibly and clear presentations on both subjects I have ever come across. Recommend him greatly

[@cm770011]

2:15 yep

[@Lexrezende]

I love how people that create the most fallacious theory in history still have the poker face to tell other people they are using fallacies lol

[@luvbotany]

Its hard to imagine local governments or private biz developing the Interstate system, the internet, NASA, CDC, EPA, SEC, Military, the Fed,.... while the government isnt good at everything, in many things the government does makes life for the vast majority of the people of the USA better. Thus the argument that stealing money for taxes is bad doesnt hold water. The big topic of the day is healthcare but if you look around the world, big government healthcare is by far better for the people, empirically far better result. Additionally who pays 40%? certainly not the rich... only us working smucks pay that which is a whole nuther problem. And additionally additionally, that whole 'if 40 then why not 98%' doesnt work because what about 0% huh? Milty is the master of 'winning' an argument with the absurd notion but not offering real truth. Certainly there is a balance. Funny how when you travel the world, the countries with the highest taxation has the highest standard of living and the highest satisfaction ratings. That cant be a coincidence...

[@mikeblain9973]

Friedman was not really arguing for a particular tax rate. He was only refuting the questioner's point that the gov employees buy stuff which benefits the rest of us. Friedman was just saying everybody would be better of by maximizing productive jobs, and minimizing gov jobs. He was not saying gov is unnecessary.

[@luvbotany]

Mike Blain Everyone is only better off by maximizing productive jobs and minimizing gov jobs if society is actually better off, let me explain. Privatizing the prison system has been a disaster. Incompetence in the public sector is no justification for privatization because maybe the job is just too big and hard for private monies, like NASA and FEMA. Mistakes happens but gov learns from its mistakes much better than private companies as they are held morally as well as fiscally responsible whereas private companies can come and go without any consequences with people holding big bags of money, in privatizing profits and socializing losses. Freedom industries in WV polluting a river is a typical example that is repeated daily. Just the fact that people agree that gov play a role in many aspects of life tells me that its not about gov/no gov but about where to draw the lines. If your rich vs poor can dramatically change where you think that line ought to be drawn. This also tells me that profits ought to be taxed much heavier until such a time whereas privatizing profits and socializing losses is not the norm but the exception to pay for the inevitable...

[@mikeblain9973]

luvbotany I think most people agree that socializing losses is a bad idea, and Friedman would have definitely have agreed. Yes, the prison system should be handled by gov. But those things have nothing to do with Friedman's point in this video. So how fiscally responsible are the SEC? When they make mistakes (like Madoff) it does not cost them anything. How is anyone morally responsible for invading a country under false pretense? They only have to bluff their way through to the end of their elected term, and no consequences.

[@mikebetts2046]

Hey luvbotany, I think you are dead wrong about "working smucks" paying 40%. I know of nobody making less than around 200k + that pays the 40% marginal rate. I just crossed the 100k line and the rich still pay a higher rate than I do (at least the working rich; doctors, lawyers, company execs, etc). Too many people live under the delusion that the poor and middle class carry the heaviest tax burden. I for one call BS on that.

[@mikebetts2046]

Furthermore, your comment about higher taxes and standard of living is not as logical as you think. I could just as easily state that the higher standard of living allows higher taxes while you seem to think the higher taxes caused the higher standard of living. If you are correct then why not crank everyones tax rate up to around 75% then? Just think of how great it would be then?

[@MavHunter20XX]

I just saw this video, and I feel he is right by all counts. When we are taxed locally, we see the immediate impact locally, but if we're taxed federally, we don't know where all that money is going or if it's going to a different state because the fed see's fit to move money there. However if the state tax in an unpopular way (or just plain unfair) citizens will feel it, merchants will feel it, all will react and take their money elsewhere.

[@LucisFerre1]

[[read what adam smith said about large corporations and monopolies and his quote about "the invisible hand" (it's only one passage and it is fundamentally opposed to friedman). ]] That passage about the invisible hand is in a chapter about free (international) trade. Both Smith and Friedman were pro-free trade & anti-protectionism, anti-tariffs. Indeed, Smith's Wealth of Nations had an enormous influence on the demise of Mercantilism, which is steeped in the protectionist rhetoric.

[@Enedrapvp]

Name one starving person in a capitalist system. I can name millions in socialist and communist systems. Your beliefs are fallacy.

[@haydenf4562]

Look up gadaffi Libya and South Yemen. They thrive until the cia overthrows them

[@Lexrezende]

Socialism and capitalism are both shit. We souldn't have to choose between one of them (and we don't). Only stupid people believe that we have to choose one or the other. Both are idiotic, unsustainable and self destructive faiths based on fallacies. Capitalism deny the role of collective, the collective needs of humans, mainly the need of stability and security. Socialism denies the individual needs. Both confuse infinite raise in wealth and comfort with life quality enhancement. Both produce more pollution than the planet is capable of processing. Both extract more resources than the planet is able to replenish. Both have a blind faith in exponentially technological development without considering its risks and the impossibility of taking countermeasures when things change so rapidly that we can't understand and predict problems. Both are materialistic and destroys transcendental values that are important to people and their mental health. It's unbelievable that people are still trying to force XIX century dogmas in the XXI century world.

[@88CrazyLegs88]

The original argument wasn't all that logical, but Milton's rebuttal is equally fallacious. He ASSUMES that the government worker is not, or can not, in fact create anything for the economy. But the opposite is true. Look at Boeing. A corporation that has produced, essentially, modern flight. Pay homage to the Wright brothers all you like, it was Boeing who produced what we see today and in the last century of modern air travel. And this just scratches the surface. We could go into the theory that advanced flight has ushered in an era of relative peace compared to what might have come about. Or any of the other corporations who benefited from the government either directly or indirectly and revolutionized the world. Like Microsoft, for example bringing the modern home computer. The list is substantial.

[@mikeblain9973]

So you are saying commercial enterprises are productive. Yes, and Friedman was saying government is not productive. It sounds like you are making the same case as him, except for your first sentence. Do you want to clarify?

[@88CrazyLegs88]

Who do you think subsidized Boeing? The government. The Pentagon funding tons of research into what is our now modern day technological civilization. MIT was at the heart of it. Milton is just flat wrong. The only argument he could make is that the free market MIGHT have done the same thing but cheaper. But, I doubt he would tread that far.

[@mikeblain9973]

88CrazyLegs88 Gov involvement generally stifles innovation. Surely you are not saying we would not have had those innovations without gov?

[@88CrazyLegs88]

Mike Blain What you're saying here is fairly common among Libertarians and of course Neocons, but it's just untrue. Gov stifles innovation CAN be true, and it can surely be false. Look at Nuclear power plants for instance. Without the Manhattan Project there never would be this alternative energy. But, the government DID stifle progress on specific types of nuclear power that uses Thorium instead of Uranium. Thorium cannot be weaponized, so no funding. That was bad, in my opinion. So, it can be, just like many things in the world, good or bad.

[@mikeblain9973]

88CrazyLegs88 Government is not a source of funds, they can only channel taxpayer funds. They might postpone taxpayers having to pay, by borrowing then taxing later. Maybe thorium will prove viable, maybe not. Government cannot make it viable if it isn't.

[@LaureanoLuna]

The man mentions the 'marginal propensity to consume' too. It could be that private people would not spend all that money but save a part of it whereas the government would spend it all, so circumventing the 'exit' that savings represent. The difference between government's and people's marginal propensity to spend is a well-known issue, which is relevant in some contexts.

[@thatsthewayitgoes9]

This segment by audience member and Milton Friedman is, in my opinion, brilliant & true and should be taught in every grade & High School & college

[@gobbly1337]

And 35 years later we have more goods and services than we know what to do with, and our economy sucks.

[@gavihuts]

Part One. Just because individiduals aren't spending their money immediately doesn't mean they are misers who hurt the economy. I read in a book from 2001 that the average worker uses about $150,000 worth of tools. You can't procure that money out of nowhere, an individual or company must save money to create that business, and when taxes are increased you are inhibiting the creation of those industrialized jobs.

[@dovahkiin516]

@PeaceRequiresAnarchy The last thing I want to reply to is that the paper said aggression is not justified. Which is interesting because both papers point out that you still need a form of justice when people steal, murder, etc. The difference is that in Chaos Theory he writes that if someone hunts you down it is not against your will if you sign a contract. But you have to sit back and think in both societies you are experiencing aggression from the state, and in anarchy you are experiencing

[@generatordoc]

Water cooperatives existed for years in incorporated communities wherein a community board provided oversight for a modest stipend, and all construction was bonded and contracted by the coop. There were full time employees that performed the labor functions at the utility for wages. Utility bills were calculated to provide maintenance and cover payroll expenses. Police, fire, and public maintenance were departments of local governments. It is in the interest of all involved to contribute.

[@LucisFerre1]

[[If you have a right to your own life, you have a right to your liberty, to your property (the product of your life).]] ... Right. Life is a process of self-sustaining and self generating action. The right to life means the right to engage in self sustaining and self generating action. "Earn" is the flip-side of "own". "You take my house when you doth take the prop that doth sustain my house. You take my life when you take the means whereby I live. " ~ Shylock, The Merchant of Venice.

[@lavabeard5939]

Yes. You are right. But that is NOT how government spending can be applied effectively. Like Friedman said, there are some things that the government does better than the public. Defense, for example is one everyone agrees on. There is also Keynesianism which is effective if used correctly. For example, during a recession the government can fund infrastructure or scientific projects or participate in a war if that is the unfortunate case. After the economy recovers, spending can be reigned in.

[@Nukepositive]

I'm not sure I heard this right. What I got from Friedman was that: taxes are justified because we actually receive goods and services in return. If we didn't receive goods and services (but in most cases we do), then taxes would be unjustified. Just making sure I got that right.

[@dovahkiin516]

Electrical distribution is a private company, but is a monopoly because of government. You don't see three or four power lines going to your house because power companies have a monopoly. As for water utilities most are gov. A empirical study done in a water privatized country showed that water concessions have the hardest time making a return profit. With 7 out of the 10 concessions had negative return rates with one more going out of business. I don't really see that as a "works best"

[@drummah107]

wow. excellent point. I was not familiar with either corporatism or hypercapitalism, and because of that I struggled to explain to my professors why capitalism is a more efficient system than they believe it to be (for all of the same reasons that Friedman articulated).

[@frankvonfrauner]

How much should a loaf of bread cost? A question no socialist can answer

[@anthonyesposito7]

​@frankvonfrauner pretty sure marx addressed this. Also, as a side note, one of the interesting things arises as a result of "capitalist logic" is that when capitalists over produce - which they often do and that's fine - in and of itself, but what happens as a result of that over production of good is that the in order to keep the perception of artificial alive they will often destroy there existing stock of whatever it may be like cars, or any other consumer items, the most horrible being the destruction of food rather than giving it away. After all they can't sell it anyway. The funny thing is, capitalists would actually prefer to take a lost than to give away surplus goods because it will affect the price of the existing stock. Capitalism and its flawed logic of which this is just one of many examples should have been abolished long ago and will given enough time. Time to move on to production for need, not for profit. It's illogical to say otherwise.

[@redunzl5]

Investment bank securitizers were more willing to securitize risky loans because they generally retained minimal risk. Whereas the GSE's guaranteed the performance of their MBS's, private securitizers generally did not, and might only retain a thin slice of risk.[34] Often, banks would offload this risk to insurance companies or other counterparties through credit default swaps, making their actual risk exposures extremely difficult for investors and creditors to discern.[35]

[@dovahkiin516]

For one, road safety (excluding highways) is really not an issue. Privatized roads have tolls, and they often exclude people from using it. Having increased cost to travel will cause people to have decrease travel resulting in less tourism. Interstate trade will have an increasing cost structure. Also, just because businesses need roads does not mean anything. Do you expect that the burden of cost to fall mainly on businesses?

[@maximemeis111]

Actually the "or" part means that it can be defined as either or. Anyway "responsible for this child' fits perfectly with "duty to deal with something". But you might still ask yourself: do you have a right to your own life? And do other people have a right on your life? The question of government taking care of healthcare (if you choose to be consistent with your answer) will depend on the answer you give.

[@shepd3]

Assuming a free society, flame throwers and missile launchers hurt nobody (well, assuming they are not fired at someone else's property). You may dump toxic waste on your property as you wish, so long as you damage nobody else's. You may hunt bald eagles as long as they land on your property unclaimed. You may burn tires on your private property so long as the toxic fumes are contained to your property. What you are missing is that burning tires and toxic waste often damage other's property.

[@fedupwithfed4047]

The Govt should be concerned MORE about what govt costs the people and less concerned about what people COST the gov't! -Tom Ferner

[@sandeepr2087]

Great man and a great teacher ability to conceptualise complex subject in simple words.

[@jannmutube]

My perspective is that deregulation started a process of stealing from Individual Retirement Accounts. It started with the technology bubble. The explanation for the market fall was that companies were being put on the NY Stock Exchange that were really name only and there was nothing behind them. They took money in and cashed out. They could do it because the conservative "free market" proponents repealed the Glass Stegall Act which would have prevented over capitalization of stock.

[@FletchforFreedom]

@niclasjt Those were just some examples. The average "poor" household in the US has more than one color TV, cable, a VCR and DVD, cell phones, a microwave, ceiling fans, etc. The median "poor" family with children also has a computer, a video game system and three color TVs. The average house owned by the "poor" has three bedrooms, one-and-a-half baths, a garage, and a porch or patio. Clearly, the concept of poverty has RADICALLY changed.

[@LucisFerre1]

Adam Smith's single comment about the invisible hand (Wealth of Nations, book 4, chapter 2) is not opposed to anything Prof Friedman has said. What Smith said was, (paraphrasing) businessmen pursuing their own interests, (profit) inadvertently do good for society without that being their main intent. Because they profit by finding out what people desire & need and offering it to them. Competition (i.e. self improvement) consists of offering higher quality, lower prices &/or greater convenience.

[@GenghisVern]

The fallacy is that federal government needs to tax dollars in order to spend, when that's not the case at all. The USG cannot "go broke" in US dollars; it's impossible. Alan Greenspan tried to explain this to Paul Ryan about 10 years ago when they tried to privatize SSA.

[@JohnnyOU08]

No, but they can run the currency into the ground through hyperinflation.

[@GenghisVern]

@@JohnnyOU08 hyperinflation is proof they cannot go bankrupt in USD. And don't assume you know the first thing about Weimar inflation

[@redunzl5]

As mortgage originators began to distribute more and more of their loans through private label MBS's, GSE's lost the ability to monitor and control mortgage originators. Competition between the GSEs and private securitizers for loans further undermined GSEs power and strengthened mortgage originators. This contributed to a decline in underwriting standards and was a major cause of the financial crisis.[34]

[@PeaceRequiresAnarchy]

@Phalanx3800 The US Post Office only has a coercive monopoly on first class mail. Companies like UPS manage to compete in a sense because of the similarities of third class mail and first class mail services, but competition in the specific services of first class mail are still violently outlawed by the state.

[@sandal_thong8631]

Nonsense. In the past city folk could send some documents by bike courier instead of the post office. They weren't "violently outlawed."

[@ChuckSFP]

Yes but if you're subsidizing spending through government, you're effectively lowering the spending power because not only are you removing spending power from individuals, you're taxing the public employees, lowering their spending power anyway. He's talking about government spending, not the spending of the populace at large. He didn't necessarily deny that public employee's work and spend money, but he denied the Keynesian idea that the government can grow GDP simply by spending.

[@sandal_thong8631]

Economics is not science, but rather propaganda to justify policies that keep wealth in the hands of a few.

[@sakarikaristo4976]

Something like that but not quite. I have tried very hard to imagine what would it be like if businesses saw a lower rate of return on capital employed tolerable. Should that improve workers’ salaries and tilt the income distribution towards more ”fairness” (definition needed)? Or should it lead to efficiency? Or less spending and investment, meaning less employment? It’s not simple to find a balance where workers win and businesses and business owners lose, and are content with this outcome such that it would be stable.

[@sandal_thong8631]

@@sakarikaristo4976 With regard to business the idea I'm currently mulling over for the last couple months is that people are promoted to their level of incompetence. That is, if they do well at their job (and the corporation is big enough to allow it), they might be offered a promotion to a position in which they may or may not be suitable based on the requirements and their talents. If they succeed, they get another promotion. If they don't then they're at the level of their incompetence. An alternative is the Dilbert Principle based on the comic strip. The author states that bad engineers are promoted to management to get them out of the way of the people doing the work. So far, I'm more inclined to believe the former.

[@Treblaine]

They are in competition, even if not in conflict. Navy has significant air-strike capability, so does Air Force (Army+marines to lesser extent). Army + Marines boast similar ground operations capability. Delta force (army) and Navy SEALs compete for honour in special operations. They compete for Commander in Chief's favours for different operations competing to who is best for almost identical functions. They DO cooperate, but they seek to do better than the other to justify their existence.

[@redunzl5]

I'm familiar with it. It affords loan opportunities to previously marginalized populations via relaxed lending criteria and regulations. Nowhere in the act does it force lenders to make bad loans. You should read it.

[@dovahkiin516]

(continued), thus since the government contracts out all it's work to private companies it does use the market force to get a cheaper better road. So, as you can see private companies compete for the gov contracts for road building. This results in the creative methods for efficiency/safety/lower cost, private roads thus have little advantage since the government already uses market powers.

[@redunzl5]

again, lending diversely is different from lending recklessly I don't deny that there was pressure to lend diversely. There was definitely NOT pressure to lend recklessly. The deregulated banks loaned recklessly because they could in an effort to boost their bottom lines while knowing full well that they would pass the risk on to others. The motivation was indeed greed.

[@michaelkilcommons57]

Milton Friedman was a Nobel Prize winning economist, but his neo-liberal economic policies did not work so well. Now we have vast concentrations of wealth, so we have luxury housing being built for millionaires while most struggle and many go homeless.

[@michaelkilcommons57]

@@victoneter You are probably the most ignorant person who ever responded to a comment I made. I am not in a position to know what the government is spending and for what purposes, and neither are you. You must be listening to some neo-liberal propagandist like Larry Kudlow. I do know that trillions are being spent on the military and around a trillion or more has been spent on bank bailouts. You have fallen for a bait and switch scam. The free-market conservatives promised free-markets and prosperity and what was delivered was the dystopian nightmare of poverty, homelessness, drug abuse, etc. that we are living through. We were both victims of a con job my friend, the only difference is that you have not woken up to the fact that we were hoodwinked.

[@michaelkilcommons57]

If free-market capitalism is so great, why is it that China has modern new infrastructure and a rising standard of living for its people, and we have rising homelessness and poverty? I remember a time when it would be unusual to find people living in the streets. Every time I see the Russians blowing up billions of dollars of ammunition and war material and I think of the problems this country is facing at home, I hate the people who are in charge of this country more and more.

[@michaelkilcommons57]

The people who control the country, billionaires, psychopaths and pedophiles, did not use their newfound economic freedom from high taxes and deregulation to invest in productivity. As a matter of fact, they shipped the productive elements of the economy to China where they could get a better return on their money. They impoverished the country. Everything Milton Friedman said is a lie.

[@firstlast9916]

@@michaelkilcommons57chine was fully communist until 1978. They freed trade (Especially international trade) back in 1978. And now they will be surpassing the US in gdp in about a year or two. Before 1978, the had practically zero gdp.

[@Audiofalcon7]

You are essentially stating that there is a market where one does not exist. Creative methods are not allowed as freely as you make it out to be: If creative, entrepreneurial methods would exist, then toll roads would *not* be the only idea to spawn. The monopolization exists *through* the use of government contracting, because only one institution is allowed to handle the contracts, which creates a type of oligarchy ab initio. Mandates and other costs makes it *very* hard for entrepreneurship.

[@Treblaine]

What I'm getting at is things are not always as they seem. To someone with no expertise in road maintenance 3 months between road resurfacing may seem a waste, but experts may point out issues that cannot be delayed. I work in a computer repair shop and people act incredulous that a computer needs upgrading after what they think is a short time, but they bought an old computer that was shortly going to be incompatible soon and now is.

[@MillionthUsername]

It's not a slippery slope fallacy. It's a logical extension of the questioner's premise. If someone is making an argument that stealing 40% of the producer's wealth does not harm production, then it FOLLOWS that stealing 100% would not harm production. We can see the questioner's fallacy by taking his own logic further. Slippery slope fallacy, OTOH, refers to drawing a conclusion which does not necessarily follow from the premise logically.

[@maximemeis111]

I must disagree. Gov's role should be to protect individual rights. When a politician declares that you have a right to health care, there are two possibilities. Either he tells you that you can hold a doctor prisoner until he gives you a treatment or he tells you that you can hold somebody else prisoner until he pays the doctor for you. Saying that is saying that you don't have a right to your own life.

[@LeviDanielBarnes]

Why must the dependency be linear? Whatever you think of Dr. Friedman's conclusion, his response here is the very definition of a slippery slope fallacy. Milton Friedman is brilliant. This just wasn't his strongest moment. It makes me glad there are no cameras recording all the dumb things I do and say daily.

[@branhoff]

I'm ok with making some cuts to Defense. I try emphasize that, however, defense spending has remained constant for the last years while entitlement programs cost more than the previous fiscal every year (plus taking up 2/3 of the budget as it is). If we don't get entitlements back to a reasonable level it will consume us eventually. Defense spending could stand to be reduced as well though.

[@generatordoc]

"Because of the government" is the reason for both problems. Electrical power companies cooperate when it becomes more feasible and cost effective than building new generation facilities. When water and sewer is kept seperate from municipal government, it is self sustaining and rates reflect costs. When government gets control rates reflect costs plus what is siphoned of to fund other pet projects of politicians

[@skibumwilly1895]

In “Inheriting an Abundant Earth” a simple rule tweak on inheritance ends up changing the direction and purpose of modern human life! Here’s a fair way to transition forward! It's something specific we can demand. If this isn’t the best answer, at least we’re thinking about what might be. Are we really just this close to having it work right? Oh yeah, it's a Ski movie! Watch “Inheriting an Abundant Earth” on KZbin, then sign the petition, and share it everywhere!!

[@generatordoc]

No, utility distribution would be in the pervue of the local citizens. Electrical distribution is often private companies or local coops. When municipalities start generating power, it becomes more expensive by default. Water utilities work best as local coops as government utilities are inherently more expensive. Sewer systems operate best as coops as well.

[@FletchforFreedom]

@Porkusido As both of the premises on which your thesis is based (economic success of Scandinavia; quality of the services provided by the state) do not bear scrutiny, the conclusion cannot hold.

[@PFB1994]

I am not missing anything. The question is whether it is better to regulate and not allow free toxic waste pollution in the first place or allow the toxic waste to be dumped and try to settle it in court procedures on what the damage was to the injured parties(provided the injured parties have access to similar quality of lawyers that the corporation doing the polluting has). But either way you are going to have the government involved.

[@LucisFerre1]

The Veterans Hospitals are using volunteer services from very well paid doctors on loan from other hospitals. Their training took years and LOTS of money...and they make enough money to draw them to that demanding career that consumes much of their lives to qualify for. If you have a government monopoly on medical treatment, then hospitals will be run like the DMV and the quality of doctors will be like something you get in the Philippines.

[@Vnam72]

So you disagree with Freidman (and me) when he says that producing is good, not spending. He said that paying government employees to do nothing does not improve the situation, i.e. create growth. I agree. I think paying someone to not dance is an equal waste. As you say, I may see greater worth in not having a dance than in paying for a dance, but I'd see even greater worth in paying for something I did want. That was the point.

[@Treblaine]

You are right that Military healthcare is not of same quality as private. That is GOOD. You want people to go for private healthcare if they can afford it. Public healthcare is not about the Hotel treatment, it is about the "not-dying" treatment. If you got cancer and for any reason you can't afford private, they would do a reasonable job of getting that tumour... but it's going to be the most cost effective treatment, not the very most expensive treatment.

[@FletchforFreedom]

@cosmopolite66 Sorry for the confusion. I am not using an "ad populum" fallacy. Had I suggested that everybody believes my point that would be the case, be referencing the conclusion of those actively engaged in the research (historians) is not a fallacy at all. And I didn't even make that point as an argument, per se, but as a response to the claim that I was ignorant on the American Revolution when I am, in fact, well versed in the research and the take of historians.

[@nathanneiman]

You don't want to pay for the road, you don't want to pay for the police, you don't want to pay for the justice, you don't want to pay for the public education, you don't want to pay for the street lighting, you don't want to pay for the city cleaning, for the garbage collection and disposal, you don't want to pay for the water and sewage treatment, you don't want to pay for the Army, you don't want to pay for the Congress, you don't want to pay for the firefighters, for the environmental protection agency, you don't want to pay nothing because you think you don't need nothing. All you think you need is to be more selfish and richer. You call Socialism the payment for these public services, but in Socialism you don't have to pay nothing for that, it's all free.

[@Mrcamhi]

Nathan Neiman Lol, do you understand anything about political ideologies? Seems not... Claiming the right doesn't wan't to pay anything to the government for those kind of services is so moronic...

[@FletchforFreedom]

@Porkusido In actual fact, the US still has the finest healthcare in the world (including for the poor) as demonstrated by actual studies of care (longer survival rates after diagnosis of a serious illness, longest life expectancy net of instant deaths from accidents/murders; more access to diagnostic equioment and treatments; more time with a primary care physician; and faster treatment). The healthcare is so much better in the US that people frequently come here for treatment.

[@maximemeis111]

(continuing) "[healthcare] should be a government responsibility" According to the oxford dictionary : "1the state or fact of having a duty to deal with something or of having control over someone" By definition, it's totally in contradiction with individual rights. But the deepest question is : do you have a right to your own life? (And maybe : do you have a right on the life of others?)

[@TheBrutalDeluxe]

I totally understood what you said and assuming corruption is endemic, if not inevitable, in a capitalist economy is not prejudice; it is borne out by the smattering of examples I gave you. I could go on and on but like you say, there's a 500 character limit.

[@PeaceRequiresAnarchy]

@dovahkiin516 For example, in today's society you can choose where you want to buy food. You aren't forced to buy it from grocery store A or B or Restaurant C or Walmart or anyone else. In the same way, in an anarchist society you would be able to choose who you wished to purchase law services from rather than be forced to pay for a monopolistic gov'ts law services.

[@FletchforFreedom]

@mistersmith6000 The answer is a combination of a) and b) leading to outcome c). This is hardly problematic. The market has been pressing for less CO2 emmissions in countless areas and the market has been responding, just as it did in terms of other pollutuants. It is no accident that the correlation between capitalism and a cleaner environment is HUGELY positive. It's the main reason that those opposed to capitalism have found it necessary to distort the science and call it "consensus".

[@Satarack]

@halloranedward Google UNICOR, also known as the Federal Prison Industries. They don't produce goods for the common market, but they do produce goods for the government. Any purchase by a federal agency of more than $2,500 is required by the mandatory source clause to purchase from UNICOR if UNICOR offers those goods (The US Defense department has an exemption from this). If the agency wants to purchase from the free market they need to receive UNICOR's permission to do so.

[@PFB1994]

And because the BP Oil spill had the government fail at its duty, doesn't mean that BP should have been allowed to happen. It means the government isn't doing the job of regulating industry and protecting the people. Friedman's theories would tell you - leave BP alone, for they would never allow such a dangerous oil spill to happen, because the oil is what makes them their profit.

[@Gabriel21733]

@TheRosa63 : as I was saying, it you got all you needed for free you and you learned a trade, you would produce what you loved, and what was not necessary you would not produce. Food, shelter and care or healthcare would be provided by your inner circle and vice versa. People Irving in communes do not need money. And when you needed something you did not have you traded. We need to simplify matters.

[@silentmajor]

Are there anymore Milton Friedman's around? :(

[@maximemeis111]

The problem with health insurance in the US is that it's heavily regulated. You have very few choices and basically have to buy a comprehensive insurance if you buy one. So it drives prices up. In a free-market, if I want an insurance for, let's say, accidents and big diseases but not for small diseases. An insurance would probably be interested and it would be cheaper than comprehensive plan. Plus taxation doesn't help the poorest (Friedman robin hood myth)

[@christopheradderley6902]

No he's not contradicting himself because he is discussing a system of exchange. We don't have a barter system - we use paper money. People do not typically produce potatoes in their garden to swap at a market with people who produce tomatoes for example. We have a monetary system.

[@patheally]

My general thinking on the subject is: many areas that promote a strong nation may have to be propped up no matter how much money they lose. And I'm not talking about health care either. (health care threatens to bankrupt our country, hence needs the efficiency of the insurance company's to manage it). But more like science, the arts, the military, and infrastructure perhaps to cite a few.

[@TheBrutalDeluxe]

1. Yes it does. If you want to play games on your PC then Open Source OS's are out. If you want to play the majority of games released then the Mac is out. The keyword in my post was virtual. 2. The tendency to defect isn't strong if the demand is stable e.g. dairy products or gas/electricity supply (with the obvious exception for seasonal demands which of course would affect all suppliers) 3. Behave yourself!

[@TheBrutalDeluxe]

1 There are no current monopolies because of antitrust regulation. The closest you can get are virtual monoplies. As in "they are virtually monopolies". Just like the example I gave. 2. Read up on cartels and how they operate then re-read what I said re stable markets. 3. Read up on antitrust and how it operates. And why for that matter. The example you gave would increase competition because people presumably started watching HS/College games.

[@dovahkiin516]

The world already has a market for private roads. The creative methods produced was toll roads. The market for private roads have not solved anything. Private roads excludes people from using it, and puts tolls up. All roads inherently create monopolies by design, unless you have multiple roads from different companies next to each other, which would be a waste of resource and an inefficient use of land. Gov contracts out to private companies to build roads. The cheapest/best wins the contract

[@FletchforFreedom]

@byroniczero That Chilean copper and Saudi oil are produced by governments undermines Friedman's point not in the slightest. In each case, the product can be provided FAR more efficiently by the private sector and, thus, the difference is a net economic loss. The whole point is an AGGREGATE one. If the privae sector produces 60 and the public sector produces 40, the total is 100%. If the alternative is 120/20 (consistent with actual results) you can see public production REDUCES wealth.

[@ManiTati]

Btw, what "loss of intellectual property"? Which country was losing what intellectual property? I didn't know that, can you elaborate?