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« States Budget, Public Spending, and Fiscal Discipline: Are we at a Crossroad? | Main | Lyrics for our Time »

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government subsidies/protectionism?

All government subsidised businesses, all services provided by the government, all legislation hampering competition, all economic and financial activies funded by excess credit...

Yes, boys.

I wonder about two things: we often mean "free market" when we speak of the market process; also, why don't we use the "unfair competition" or "level playing field" labels as much as others do?

Err... yes folks, given my ignorance.

Dave,

I'm not sure I see what you're getting at. A term like "unfair competition" can be hard to pin down. A standard, and very just, criticism of anti-trust is that the semantics of it are just too loose to provide tolerable legal predictability. It's completely vague and throws us back onto the unpredictable discretion of the authorities.

So you think there is "unfair competition" in the market. Yes, I think so too. People lie all the time, including in business. That's not fair! There are lots of ways people act unfairly in their market dealings that have nothing to do with bogus government rules or the like.

You describe such behavior as "intolerable." That sounds fine, but what, precisely, do you propose to do? Fraud is intolerable and we have legal protections for that. You can sue. But it would be unwise to make a law against "unfair practices," which is hopelessly vague. So we can rail against "intolerable" practices, I suppose, but the real question is what you propose do about them?

Create a free market.

"Create a free market." And then nobody will behave unfairly, Dave?

Roger, fraud is a violation of property rights? If it is, and if we assume that the free market is characterized by the absolute protection of property rights them if we assume that we have a perfectly free market them it implies that fraud doesn't exist. Right?

It appears that Prychitko is defending the market for the protection of property rights, which means that he is defending anarchy. Correct?

Well hold on, Rafael. Roger may be using a definition of "unfair" which doesn't mean "in violation of property rights" or "in a manner forbidden by a community's legal code." He could have in mind something like "contrary to the demands of morality" or "without appropriate consideration for the moral importance of others' interests." By the first sort of definition, unfairness would present itself in a properly-functioning anarchistic free market whenever transaction or opportunity costs prevented the enforcement of justice, which is something that defenders of the system are willing to countenance. But by the second definition, we would expect to see quite a bit of unfairness in any society, and most of it would likely go unaddressed (indeed, trying to address it might produce new unfairness!).

The appropriate questions here are, I think, what Roger had in mind when he used the word "unfair," and whether he sees the presence of "unfairness" as being problematic for the justification of a system of social organization.

Rafael, “if we assume that the free market is characterized by the absolute protection of property rights,” then we are assuming away the problem. That assumption makes “the free market” a magic place where nothing bad ever happens. Many statists imagine a magical version of the state that always makes the right decisions. Magical thinking doesn’t help us find real solutions to real problems.

Danny Shahar is right to point out that lots of actions may be lawful but not fair. It’s not fair that I get a bad cup of coffee when I was promised “the world’s best coffee inside!” The realtor says, “Oh, no one will even build here.” You buy the unit and three years later your NYC view is fully obscured by a new highrise across the street. (True story except that we didn’t buy the unit.) And so on. There are lots of ways in which people will act unfairly that sink below the legal system’s threshold of observation. Even such injustices as fall under the purview of the legal system cannot always receive appropriate remedy; the legal system will have a non-zero error rate. Finally, the legal system itself will embody injustices and in a dynamic world, you’ll never be rid of all such injustices.

None of the forgoing is a slam on liberty. I’m just saying that no system unaided by magic can eliminate unfairness, depravity, crass selfishness, provincialism, bigotries of various sorts, and all the other vices of the grumbling hive. Ordered liberty does the best job of turning private vices into publick benefits, but the vices remain and they produce “unfairness” in best of systems.

Hey, we finally get the debate I was hoping for!

My point was that there is a great amount of unfair competition -- yet I don't hear Austrians complain about it much -- and that unfair competition stems from state intervention, twisting of property rights and what have you. Create a free market and that form of unfair competition will come to and end.

Now, is there also unfair competition in a free and open market? Well, that's now a separate question. I can say this: we all know the outcomes are not claimed to be "fair" by Hayek and other Austrians. I believe that, too. Is it fair, for example, that I earn more than a similar economist at Podunk State, but less than a similar economist at Michigan State? Supply and Demand (assume no state significance here; I know, I know) determine the outcome -- i.e., people's willingness to pay and to recieve.

Our claim instead is that somehow the process itself is fair. Fair or not, the free market process does lead to robust plan coordination and long run economic growth.

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