What Happens to Jobless Individuals in a Free Market During Economic Downturns?

[kasse]

Maybe a meaningless question, but:

Libertarians keep saying that interference in the economy creates an unhealthy economy that involves bubbles that will sooner or later burst. But isn't it then possible that bubbles can be created as a result of interference in the market when human rights are being violated?

 

[imiyakawa]

Social security is not a human right, and it ought not to be.

Would you be saying that if you broke your legs?

From an economic perspective, I agree. Social security promotes inefficiency and undermines one of the foundations of America's capitalist economic system: incentive. (Although it could be argued taking money from the rich and giving to the poor actually leads to an increase in Aggregate Demand because those on the dole spend almost all their money, leading to increased economic growth and more money for the rich (simple multiplier effect)..

Although I agree that there are too many people who can't be stuffed working and get social security (my plan for the future).

 

[mal4mac]

What happens to the unemployed who have not taken out unemployment insurance?

"Even if there are no general grounds for considering the unemployed deficient in
employment commitment, do the variations between countries suggest that the
relative generosity of the welfare system may have an important impact on work
motivation? There is no indication that relatively generous welfare systems give rise
to low motivation among the unemployed. Employment commitment was highest
among the unemployed in Denmark (85%) and Sweden (82%), while the Netherlands
shared joint third position with Britain (81%)."

http://www.nuff.ox.ac.uk/projects/uwwclus/Papers/restrict/lisbon.pdf

 

[kasse]

In a free market society, will it cost money to enter the city park for a walk?

 

[kasse]

Would you be saying that if you broke your legs?

Isn't that just an appeal to emotion, and not a valid argument?

 

[kasse]

How about heritage buildings in a free market society? Should everyone have the right to buy anything they want, and treat it as they see fit?

 

[arildno]

There is no reason why a wholly unregulated economy would be a good thing.

If you are poor, at the physical starvation level, even the merest twinkle of hope to get bread for the next day makes you willing to agree to any sort of degradation.

We have pathetic letters from 6th century Gaul, where a man sells himself into slavery to the local land-owner in order to gain some sort of security in his life.

People sold their own children (if you were a carpenter, scraping by, and then had an accident making you unable to work for a long time; what would you choose: let all your children starve to death, or sell one to a guy who says he will be treated well, giving you the money to care for the others while you are ill?)

The list goes on and on, and there is not the slightest reason why any wholly unregulated economy might not develop degenerate features like these.

It doesn't matter if formal laws are passed against these particular practices, they WILL happen, in the darkness of the night, unless all people has some minimal resources to fall back upon.

Insofar as some (small) level of social aid IS furnished by the state, then the free market will regulate ITSELF thereafter, because any company trying to cut costs by offering wages distinctly worse than the minimal level will get no applicants.

There is no reason why the state as such should stipulate minimum wages at all, indeed, that can be counter-productive.


As for those on the receiving side of social aid, I think it ordinarily should be coupled to a willingness to do work, whenever the opportunity arises.

 

[Vanadium 50]

It doesn't matter if formal laws are passed against these particular practices, they WILL happen, in the darkness of the night, unless all people has some minimal resources to fall back upon.

I don't see many people selling themselves or their children into slavery in 21st century America. 21st century America is not 6th century Gaul.

 

[arildno]

I don't see many people selling themselves or their children into slavery in 21st century America. 21st century America is not 6th century Gaul.

That might change.

They were EXACTLY like you and me in their human natures.

Consider the implications of that.

 

[xxChrisxx]

I don't see many people selling themselves or their children into slavery in 21st century America. 21st century America is not 6th century Gaul.

How many of those people are facing starvation? I can tell you something for nothing, given the choice of certain death or selling themselves to slavery, I would say 99% of people would choose the slavery option. (There is always the stupid stubborn bastard)

It's very easy to say "oh that'll never happen". But until someone is truly put in that situation not even they can say what they would do. It's very easy to imagine, another to experience.

EDIT: And just exactly what makes it different to 6th century Gaul?

 

[rootX]

There is no reason why a wholly unregulated economy would be a good thing.

It is even unrealistic to believe in a completely unregulated or a completely regulated economy.

 

[fleem]

Yesterday I posted a graph from an extremely reputable source showing a profound and irrefutable correlation between a nation's economic freedom and its per-capita wealth. The only comment I received on that graph was, "Correlation does not imply causation". What does this tell us about the intellectual prowess of the socialists in this thread?

 

[rootX]

Yesterday I posted a graph from an extremely reputable source showing a profound and irrefutable correlation between a nation's economic freedom and its per-capita wealth.

Per-capita wealth is not equal to the personal welfare.

 

[xxChrisxx]

Yesterday I posted a graph from an extremely reputable source showing a profound and irrefutable correlation between a nation's economic freedom and its per-capita wealth. The only comment I received on that graph was, "Correlation does not imply causation". What does this tell us about the intellectual prowess of the socialists in this thread?

The below is not to imply that you or the graph is wrong, just bakcing up the statement of Correlation does not imply causation.

There may be a correlation but that does not mean that single variable is responsible. You also need to be careful about the conclusions you can draw from a graph like that. You have to ask, do the results indeed imply causation or as a consequence.

Eg. Do rich people have more TV's in their home because they are rich. Or are they rich becuase they have more TV's. (In this case the answer is obvious becuase of common sonse, but strictly from the correlation alone you cannot draw the conclusion that they have more TV's becuase they are rich)

Point is: your graph lovely as it is, by itsself is inconclusinve.

 

[fleem]

Per-capita wealth is not equal to the personal welfare.

So do you believe it is inversely proportional, then?

 

[fleem]

The below is not to imply that you or the graph is wrong, just bakcing up the statement of Correlation does not imply causation.

There may be a correlation but that does not mean that single variable is responsible. You also need to be careful about the conclusions you can draw from a graph like that. You have to ask, do the results indeed imply causation or as a consequence.

Eg. Do rich people have more TV's in their home because they are rich. Or are they rich becuase they have more TV's. (In this case the answer is obvious becuase of common sonse, but strictly from the correlation alone you cannot draw the conclusion that they have more TV's becuase they are rich)

Point is: your graph lovely as it is, by itsself is inconclusinve.

This makes no sense. It sounds like you are trying to defend your (or whoever's it was) statement, "correlation does not imply causation" by now saying "consequences aren't necessarily caused by anything".

I assure you, correlation always implies causation, unless, of course, you reject the scientific process.

Please take a look at my first response to that "correlation does not imply causation" post. I address the issue of direction of causation, but I'm being difficult, here, because it really looks like someone is trying to obfuscate simple matters in order to pretend they didn't make a bad (and, IMO, spun) statement.

 

[DavidSnider]

fleem:

What does GDP say about the quality or sustainability of what is being produced?

 

[xxChrisxx]

This makes no sense. It sounds like you are trying to defend your (or whoever's it was) statement, "correlation does not imply causation" by now saying "consequences aren't necessarily caused by anything".

I assure you, correlation always implies causation, unless, of course, you reject the scientific process.

Mathematically you are wrong. Technically its always correct to say "Correlation does not imply causation"

Correlation is not equal to causation; it is only a requirement for it.I wasnt making comment about anything you or anyone else said, becuase I really couldn't care less. Just defending the (correct) point that you have to be careful when using a graph you have found to instantly conclude you are correct.

EDIT: I also said that I wasnt saying you were wrong (as I agree with the conclusion that the more free the economy, the grater the wealth) I'm simply backing up the statemnt from a statistically honest perspective.

 

[fleem]

fleem:

What does GDP say about the quality or sustainability of what is being produced?

A high per-capita GDP says that the products and services in that nation are being purchased by the consumers in that nation (over foreign goods) because those domestic goods are all extremely low quality and the consumers are all masochists and want their economy to plummet to oblivion. (just kidding).

 

[fleem]

Mathematically you are wrong. Technically its always correct to say "Correlation does not imply causation"

Correlation is not equal to causation; it is only a requirement for it.I wasnt making comment about anything you or anyone else said, becuase I really couldn't care less. Just defending the (correct) point that you have to be careful when using a graph you have found to instantly conclude you are correct.

EDIT: I also said that I wasnt saying you were wrong (as I agree with the conclusion that the more free the economy, the grater the wealth) I'm simply backing up the statemnt from a statistically honest perspective.

Ah of course. I thought you were implying the strong correlation among the many data points in that graph impied a notable liklihood of no causation. As with all science, we refer to a strong enough correlation as a "proof" of causation. But your technical point is taken.

EDIT: I do, though, think the original statement was simply made to imply the graph was notably suspect on purely statistical grounds (assuming no foul play in its creation), because the person that made that post didn't make clear, like you, that he was simply setting the technical record straight.

 

[DavidSnider]

A high per-capita GDP says that the products and services in that nation are being purchased by the consumers in that nation (over foreign goods) because those domestic goods are all extremely low quality and the consumers are all masochists and want their economy to plummet to oblivion. (just kidding).

or perhaps they buy them because the products are cheap and buy them again because they fall apart and prefer what they can buy now over what they have to save for to get later.

 

[Evo]

If welfare and big government is bad, how come the scandinavian countries suffer less than other countries during the financial crisis?

Swedish economy hits 30-year low

Sweden’s government has released data showing the nation’s economic growth has slowed to its weakest levels in more than 30 years. Anders Borg, Sweden’s Finance Minister, announced the bad news along with a forecast that the Swedish economy will shrink by 0.8 percent in 2009.

Sweden’s labour market will also be affected by the economic slump, with unemployment expected to rise to 7.7 percent in 2009 and 8.5 percent in 2010. Again, the government foresees 2011 as being the turning point when figures begin returning to healthier levels.

http://www.icenews.is/index.php/2009/01/19/swedish-economy-hits-30-year-low/

Population: 9,059,651 (July 2009 est.)
(Source: CIA Factbook)

New York City has almost the same population at 8.36 million. You're comparing apples and oranges.

 

[fleem]

or perhaps they buy them because the products are cheap and buy them again because they fall apart and prefer what they can buy now over what they have to save for to get later.

Quick, somebody give their blow hard politicians the power to save them from that hell on Earth!

Seriously, I could say the same thing about foreign goods. You're making things up to avoid talking about that graph.

 

[mheslep]

That might change.

They were EXACTLY like you and me in their human natures.

Consider the implications of that.

The concept of a free people, the worth and rights of the individual have radically changed over the last couple millennia, more so over the last two or three centuries. In the middle ages, generation after generation expected that the world would not change at all for them, even for their descendants, other than the possibility their social group might be obliterated. They were correct in that thinking. Before the settlement of North America, culminating with the American revolution, large societies had an expectation around the world that they would answer to a King/Emperor/Pope somewhere. There was zero expectation on the part of the average person that they could ever be King. That thinking has radically changed in the developed world.

 

[xxChrisxx]

The concept of a free people, the worth and rights of the individual have radically changed over the last couple millennia, more so over the last two or three centuries. In the middle ages, generation after generation expected that the world would not change at all even for their descendants, other than their social group might be obliterated, and they were right. Before the settlement of North America, and culminating with the American revolution, large societies had an expectation around the world that they would answer to a King/Emperor/Pope somewhere. There was zero expectation on the part of the average person that they could ever be King. That has thinking has radically changed in the developed world.

Maybe so, but the comment was along the lines of selling yourself into slavery to ensure you are kept (ie don't die of starvation).

This is a point about preservation which is the most fundamental need, it trumps expectations and aspirations. So within the context of the question, were are precisely the same as the people from 6th centruy Gaul.

 

[DavidSnider]

Quick, somebody give their blow hard politicians the power to save them from that hell on Earth!

Seriously, I could say the same thing about foreign goods. You're making things up to avoid talking about that graph.

First of all, I never made any statements about giving politicians any sort of power.

Second, I don't see anything wrong with the graph.

What I'm asking you to consider is that not everything that is important to the well being of a society is based on GDP per capita.

How would you libertarians handle the problem of environmental destruction? Let's say factories down the road are polluting your farm, but you can't prove which one of them is responsible?

 

[fleem]

First of all, I never made any statements about giving politicians any sort of power.

Second, I don't see anything wrong with the graph.

What I'm asking you to consider is that not everything that is important to the well being of a society is based on GDP per capita.

How would you libertarians handle the problem of environmental destruction? Let's say factories down the road are polluting your farm, but you can't prove which one of them is responsible?

For the record I'm only "mostly" libertarian, and also the definition does have some ambiguity. I do believe the federal government should have power to regulate certain activity damaging the environment. Of course, ideally its done with real science (not through the "scientists" bribed with govt grants), and that's hard to implement. When asked about my political leanings, I usually mention some degree of state sovereignty. I believe the federal government has convinced the people that states should not have much power. But competition among the state governments would be a powerful force keeping government clean (taxpayers move away from corruption). Unfortunately its kinda harder to move out of the country to get away from corruption in the federal government. I doubt I need to point out that 95% of what the federal govt does is blatantly unconstitutional. Finally, i applaud states that defy the federal government's unconstitutional laws, like California and marijuana, because that sort of attitude is our only hope in keeping the federal government in check.

 

[DavidSnider]

ideally its done with real science (not through the "scientists" bribed with govt grants).

Is this truthiness or do you have a specific example?

 

[mheslep]

Maybe so, but the comment was along the lines of selling yourself into slavery to ensure you are kept (ie don't die of starvation).

This is a point about preservation which is the most fundamental need, it trumps expectations and aspirations. So within the context of the question, were are precisely the same as the people from 6th century Gaul.

Precisely because the vast majority of people know that there are opportunities for nearly everyone (unlike Gaul), that tomorrow may and likely will hold even more opportunities (unlike Gaul), then it makes little sense to sell away the rest of your life because today they are destitute. Furthermore, on average everyone around them is not destitute (unlike Gaul), in fact no matter where you are in this country there is likely a millionaire within a rocks throw with no connection to the King (unlike Gaul). There are churches and other charitable organizations within a rocks throw (unlike Gaul), all of which need have nothing to do with government. Despite all this people can and do resort to desperate actions in the moment. But given the above, it is simply ridiculous to make the comparison between 21st century free societies and Gaul in terms of subsistence living.

 

[skeptic2]

Precisely because the vast majority of people know that there are opportunities for nearly everyone (unlike Gaul), that tomorrow may and likely will hold even more opportunities (unlike Gaul), then it makes little sense to sell away the rest of your life because today they are destitute. Furthermore, on average everyone around them is not destitute (unlike Gaul), in fact no matter where you are in this country there is likely a millionaire within a rocks throw with no connection to the King (unlike Gaul). There are churches and other charitable organizations within a rocks throw (unlike Gaul), all of which need have nothing to do with government. Despite all this people can and do resort to desperate actions in the moment. But given the above, it is simply ridiculous to make the comparison between 21st century free societies and Gaul in terms of subsistence living.

I wasn't aware that this discussion applied to only this country. Look at Africa, look at Central America and large parts of South America. Look at parts of Asia and you will find areas where your post doesn't apply. In these areas it is not ridiculous to make that comparison.

 

[xxChrisxx]

Precisely because the vast majority of people know that there are opportunities for nearly everyone (unlike Gaul), that tomorrow may and likely will hold even more opportunities (unlike Gaul), then it makes little sense to sell away the rest of your life because today they are destitute. Furthermore, on average everyone around them is not destitute (unlike Gaul), in fact no matter where you are in this country there is likely a millionaire within a rocks throw with no connection to the King (unlike Gaul). There are churches and other charitable organizations within a rocks throw (unlike Gaul), all of which need have nothing to do with government. Despite all this people can and do resort to desperate actions in the moment. But given the above, it is simply ridiculous to make the comparison between 21st century free societies and Gaul in terms of subsistence living.

I think you were focusing too much on the literal points of the argument as opposed to the general meaning behind it. The original point was that, as you say, desperate times makes people do funny things, now as much as the examples chang (and have become less extreme) people will act in the same manner (to preserve themselves) be it in 6th C Gaul or 21st century western world.

Now the 'sell yourself into slavery becuase of strvation arguement' takes this to the extreme, and in modern 1st world countries will never happen as we have alternatives (charites/welfare). Without the security net of welfare (be it goverrnment or other) you will find that people can and will turn to similar measures that our ancient ancestors turned to.

So the comparison is far from rediculous in terms of human behaviour, in the outcomes and otions they have then yes.

 

[rootX]

I have some related questions about (ideal) free markets (run by real people):

1) How government should afford military expenditures? or Who should be responsible for the nation's defense?
2) What should be the government objectives?
3) What should be the course of action where government objectives and free market goals interfere?
4) Is free economy prone to more boom-busts (or greed)?
5) Will profit maximizing society be sustainable in the long run? Often, short term profit maximizing goals interfere with the long term sustainability.
Or, If free market can sustain itself in the long run?
6) Should there be any public services?

 

[arildno]

The concept of a free people, the worth and rights of the individual have radically changed over the last couple millennia, more so over the last two or three centuries. In the middle ages, generation after generation expected that the world would not change at all for them, even for their descendants, other than the possibility their social group might be obliterated. They were correct in that thinking. Before the settlement of North America, culminating with the American revolution, large societies had an expectation around the world that they would answer to a King/Emperor/Pope somewhere. There was zero expectation on the part of the average person that they could ever be King. That thinking has radically changed in the developed world.

Yawn.

If you were PHYSICALLY starving (and that is an OBJECTIVE, trans-historical condition!), you would rid yourself with such notions in the manner of..seconds.

You wouldn't care about "rights", but about food.

 

[mheslep]

Yawn.

How amusing.

You wouldn't care about "rights", but about food.

Yes quite right. Which has nothing to do with your assertions above. You are spouting nonsense there.

 

[mheslep]

I wasn't aware that this discussion applied to only this country.

Yes the discussion, as started in #42, applies to the developed world where there substantial economies in existence and the possibility of changing over to a 'wholly unregulated economy' has relevance.