Men Should Be Free, Markets Should Be Competitive

Men Should be Free, Markets Should be Competitive

Is it a coincidence that one of the most powerful discovery's for peace and prosperity the world has inherited would be harvested in a decades long study of "Moral Philosophy"?  (Adam Smith was a professor of Moral Philosophy before writing "The Wealth of Nations.")  Adam Smith's often quoted, "It is not from the benevolence of the baker...but from their self interest that we expect our dinner.." is not an endorsement of selfishness, but as he saw it an application of the Golden Rule.  Once we give what someone else wants, we get what we want.  In context, it is seen that in order to elicit the exchanges that would benefit ourselves, we must first think of benefiting others.

Our goal should be free, competitive, and just markets not just "free" markets.

Smith would reject Ayn Rand's now popular idea in business that selfishness is a virtue, he saw selfishness and greed as a vice.  Imagine that.  As lust is to marriage, so greed is to capitalism, while lust and greed are bad, it cannot be rooted out of men.  We are both evil and benevolent, so we should be aware of this and make policies appropriate to encourage the later and discourage the former, not have a free-for-all, elite-dominated market just because the elite can dominate.

"Das Smith Problem"

The Germans saw a contradiction between Smith's earlier work, "The Theory of Moral Sentiments," which relied on mens' small town benevolence for a good society, and, "The Wealth of Nations'" big city reliance on self interest.  Actually there was no conflict.  Smith combined the two in Wealth and thought that men still had a basic desire to be accepted in a just society which would balance his self interest and enable exchanges which treated people with justice.  But what happens when the society itself encourages greed as a virtue?  We get volatile markets, spooked investors, abuse of personal and public credit and the list goes on.

It is time to stop the ideological ignorance and bring some balance back to our economic and political system.

Below is a continuum of economic thought that might be useful to put this discussion in some context.  It was not until the mid to late 20th century that the Chicago School and other venomous epistemologies used the ideas of "efficient markets" and "selfishness as a virtue" to gut competition and justice from our political and economic systems.

The continuum of faith in free markets:

• Marxist-no faith
• Keynesian-some faith
• Smithian-good faith....I advocate
• Chicago School-great faith
• Austrian School-complete faith
  

I am "post-Chicago," so perhaps "good faith," or an original Smithian, Classical School of economics.  Our goal should be, as Smith laid it out; free, competitive, and just markets not solely free markets.

Sincerely,
Lawrence Feriozzi

The Clone Town Free Market vs. Competitive Markets

Once upon a time we enforced antitrust or competition law in this country.  A time when you could go to a different town and it was actually different.  It had different stores that were owned by different people in the community.  Ownership was local so everything had a more local feel.  Our money more or less stayed in that community as the owners were not conglomerates.  They spent their profits locally, in local businesses.

Now, of course, it's different; a majority of US towns look the same.  "The Clone Town," as it has come to be known, have the same corporate names and all profits leave town to be redistributed via the corporate headquarters.


National branding and central management has gone a long way toward efficiently manufacturing our wants and then satisfying them--to the detriment of your local community.

Civil Anti-Competition Lawsuit Filings from 1890-2003

Accept for public utilities and patents, we have long had a public policy has been theoretically directed by a single guiding principle: competition.  Only, as seen by this graph, it hasn't been enforced since Johnson.  (Note if this graph was per business it would be much more dramatic.)  As an old school Smithian, Classical School, I believe in free, competitive, and just markets not solely free markets.  I also believe we should enforce the law.

Individuals should be free, markets should be free, competitive, and just, like Adam Smith originally conceived. 

Sincerely,
Lawrence Feriozzi

The continuum of faith in free markets:

• Marxist-no faith
• Keynesian-some faith
• Chicago School-great faith
• Austrian School-complete faith
  

(I am "post-Chicago," so perhaps "good faith" or an original Smithian, Classical School.  Our goal should be free, competitive, and just markets not just free markets.)

LINKS ON THIS TOPIC

American Independent Business Alliance--Helping Communities & Local Independent Businesses Thrive!

Journal of Competition Law & Economics

Likely made by a Marxist or Keynesian, but it emotes a relevant point for today.

Exploitation & US State-Capitalism

Recycling cotton

Most of the products that empower our standard of living often enable and perpetuate state-capitalist systems of unfairness in the US and worse systems overseas.  Those multinational corporations that can get away with exploiting people in developing countries through their supplier are motivated to do so because we demand higher quality and lower prices.  I don't blame consumers, that’s what consumers do; it’s what makes capitalism the best, most efficient economic system available in the world today.  There is no incentive for either the consumer or the manufacture to reveal exploitation.  It would lower our enjoyment, and their profit received from these products.

This one minute video shows a women sniffing burnt plastic
with her lighter in order to separate plastic for recycling.

"You don't talk to outsiders."

This is our government’s job; they, exclusively, are in a position to oversee and try to remedy these injustices.  Unfortunately our government is by and large captured by these enormous multinational corporations they “oversee.”

Sincerely,
Lawrence Feriozzi

2011: Big Banks Up 29%, Small Banks Down 43%

St. Louis Federal Reserve President Ballard

Dallas Federal Reserve President Fisher

 Notable, non partisan, economist calling for big bank breakup.

Dallas and St. Louis Federal Reserve Presidents Richard Fisher and James Bullard, itulip's Eric Janszen, former IMF chief economist's Simon Johnson, and many significantly knowledgeable non-democrats call for breaking up the largest banks. This is not something most of the these people would risk saying without good reasons for saying it.

I agree that we must breakup these largest banks to restore real capitalism and competition.  Until these largest banks' parasitic largeness is dealt with, the Federal Reserve, Congress, the President, and captured regulators will continue to enable their dependence on taxpayer's dollars.

Former IMF Chief Economist

Venture Capitalist Eric Janszen

A growing economy since 1972--YES, ...for the finance industry, stagnate wages for ever one else.  The pie has gotten bigger, but our slice stays the same.

These banks shapeshift.  They are libertarians while making a profit, and socialist when needing a Fed fix after a speculative spree.  This is not going to stop by the Fed giving them more money.  Just like a drug addict, this will just enable them and allow an uncompetitive banking system to continue further draining the productive economy.   This same uncompetitive, state-supported "capitalism" occurs at all of the largest companies but the big banks are at the top of the list in trillions of dollars transferring from the productive economy to the greediest speculative finance economy.  Why?  We should remember the several hundred fold increase of politician campaign support that has occurred over these last two decades, in both parties.  What was about 15% of a hundred times smaller pie of campaign contributions in the late 80's, is now 40% of a preposterously larger waterfall of cash coming from the financial, state-supported oligarchy.

Sincerely,
Lawrence Feriozzi
Neotraditional, fair-minded, conservative

When is a Firm Ideology Good?

When is a firm ideology good?  Never, accept in the underlying empowering assumptions of our Constitution.  If we start dissecting the "truth" of our collective assumptions of the ideal, such as, "all men are created equal" then our entire society will break down into a vulgar relativism and result in an uninspiring chaos.  Do we have a firm basis for "knowing" these underlying assumptions?  No we don't, but I believe them in faith without proof, and also for the above mentioned practical reason.

Given that condition, a firm ideology has a horrible track record of destructive obstinacy. It's practitioner's ideals are the ideals everyone else should be following-if others just understood.  Republicans are saying to themselves, "If they just understood Ayn Rand, Milton Friedman, etc. ... they would sign the no new tax pledge, they would allow unfettered free markets," etc....Republicans, your ideals are ruining this country.

Sincerely,
Lawrence Feriozzi,
Neotraditional, fair-minded, Conservative

Legitimization of State-Capitalism 2.0 & Unfettered Freemarkets Connection?

Wow, was I surprised when The Economist ran a debate between a Harvard professor in support of state capitalism "2.0," as he calls it, and a run of the mill free market professor.  I also thought of the new book, "No One's World" where the author points out how the state capitalist developing economies of Russia, India, & China, did not suffer the downward fluctuations like the Western, state independent economies of the US, Europe, and Japan.

Aside from Marx's evolution of state-capitalism being the final stages of an economy before a final proletariat take over, support of such a system seems so outrageous to my ingrained free market sensibilities.  I took a few deep psychic breathes and was thankful such a view was made explicit, in such a reputable way, being out of Harvard.

Next I started thinking of the prevailing ideological neo-conservative and neo-liberal extreme free market thought and practice of the past decades in business and government, i.e. Ayn Rand and Milton Friedman.  How this unbalanced thinking provided the huberous of our 2008 economic crisis and precident for bailouts to the largest financial entities, a little like, you guessed it: state-capitalism.  Hmmm?

I will reluctantly agree, on it's face, that a state sponsored corporation will be better able to compete against other Leviathans sponsored by, say, our Chinese friends.  But there is also something, on it's face, extremely sinister about "my" government essentially picking industry leaders to better compete in a globalized economy.  The risk for abuse seems so high.  No matter, it is the direction we are heading.

Finance & Productivity are Good, Corruption is Bad

The finance industry provides the bricks and mortar for new ideas to become goods and services to be made and rendered.  It helps make the jobs that allow billions of people to eat, have shelter, and exist.  It provides for the efficient allocation of resources and the reduction of risk so businesses will open and provides goods, services, and jobs.

I have no problem with the essence of our modern finance system.

I have a problem with the disproportionate power and influence, aka corruption, the largest corporations assert over our formerly democratic processes in this country.  It is no longer possible to vote against the continued corrupting centralization of this power: both Obama and Romney take a vast majority of their contributions and advise from this well thought out prevailing corporate ideology.

Sincerely,
Lawrence Feriozzi

Cornel West, Capitalism, Trustbusting & the 2nd Amendment

All good things.

Modern life is the most complex it has ever been in the history of mankind.  To think simple ideological solutions will solve our most intractable problems is an understandable instinct, but it's also wrong.

Life was easier when I fit into the neat ideological sliding scale of prefabricated political categories defined by today's public discussion.  Problem is these issues are too important and complex to leave in the hands of the world's narrow preexisting categories for political meaning.

I have, as Dr West puts it, "put to death" some of the weakest prefabricated ideas that were made for me as a Republican.  I now have more nuanced understanding of the world.

• Immigration policy in this country is inhuman, irrational, and shameful--it contributes to the "rot" or internal decay that have dismantled all great empires.  It is a "keep what's ours" mentality not based on reality but in selfish fear of losing what we have.
• Free-market capitalism is the best economic system the world has to offer, but the Justice Department needs to seriously ramp-up it's Anti-Trust prosecution and break up our present day oligarchies which have hijacked the democratic process.
• It is no longer possible to vote against this oligarchy of big business and banks; they have essentially captured our government's democratic processes entirely.
• Police should be respected as the critical institution it is in maintaining our tenuous civil order; however, too large of a percentage abuse their power and violate the rights and dignity of the citizens they were sworn to serve and protect.

Because these ideas lack "concision" and  will not fit neatly between two commercials and for other reasons, they are not discussed, debated, much less analyzed before the masses.

Sincerely,
Lawrence Feriozzi