> The idea that the free market will self-correct and optimize outcomes is a well-documented fantasy.
There are far too many documented instances of it actually working to call it a fantasy.
> Markets don’t account for externalities
Markets aren't expected to account for externalities. Externalities are the things you're supposed to tax.
> they concentrate wealth (and therefore political power)
You're describing regulatory capture. This is why governments are supposed to have limited powers. To keep them from passing rules that enrich cronies and entrench incumbents.
> they routinely underprovide merit goods like education, healthcare, and basic research (things that benefit society broadly but aren’t immediately profitable)
Markets are actually pretty good at providing all of those things. There are plenty of high quality private schools, high quality private medical facilities and high quality private research labs.
The real problem here is that some people can't afford those things. But now you're making the case for a UBI so people can afford those things when they otherwise couldn't, not for having the government actually operate the doctor's office.
> As for how to address budget issues, the solution is simple: tax the rich.
Is it so simple? The highest marginal tax rate in the US is 50.3% (37% federal + 13.3% state in California). The highest marginal tax rate in Norway is 47.4%.
Meanwhile most of what the rich own are investment securities like stocks and US treasuries. What happens if you increase their taxes? They have less to invest. The stocks then go to someone not being taxed, i.e. foreign investors, so more of the future returns of US companies leave the country. Fewer treasury buyers increase the interest rate the US pays on the debt. Fewer stock buyers lower stock prices, which reduce capital gains and therefore capital gains tax revenue. Fewer stock buyers make it harder for companies to raise money, which lowers employment and wages, and therefore tax revenue again. Increasing the proportion of tax revenue that comes from "the rich" causes an extremely perverse incentive whenever you ask the Congressional Budget Office to do the numbers on how a policy that would transfer wealth from the rich to the middle class would affect tax revenue, and the policy correspondingly gets shelved.
TANSTAAFL.
>> There are far too many documented instances of it actually working to call it a fantasy.
Markets are a tool which can work extremely well if deployed carefully and within a sensible regulatory framework. Given that the world CO2 level keeps rising, we can't eat fish because of heavy metals and we all have forever microplastics in us, I think it's fair to question some of our assumptions.
>> Markets aren't expected to account for externalities. Externalities are the things you're supposed to tax.
Agreed - however taxing externalities doesn't seem to be working out in practice (in the US).
>> You're describing regulatory capture. This is why governments are supposed to have limited powers.
Wealth inequality can rise without regulatory capture. Government is not the source of all evil. Smaller govenrment would just lead to further concentration of wealth and power within the private sector. We need a balanced system, not blind devotion.
>> Markets are actually pretty good at providing all of those things... The real problem here is that some people can't afford those thing
So can the market provide those things or not? Clearly we want everyone to have an education not just the uber wealthy.
> Wealth inequality can rise without regulatory capture. Government is not the source of all evil. Smaller govenrment would just lead to further concentration of wealth and power within the private sector. We need a balanced system, not blind devotion.
But there's the problem: The person you're replying to clearly thinks there's too much government. You seem to think there's not enough.
If I had to pick a side of this to bet on, I would bet on it being "too much" rather than "too little" at this point, simply because in the trend has been for the US government to get larger over time, not smaller. The bigger it gets, the less likely it is that it's "not big enough". I understand that the responsibilities we've delegated to the government continue to increase in complexity, but complexity drives exponential growth, which I would also weigh against the "there's not enough government" argument.
Also I'm really not convinced by the argument that "smaller government would just lead to further concentration of wealth and power". I think we agree that wealth is becoming increasingly more concentrated--but so too is the size of the government. There's simply more direct evidence that wealth concentration grows as government complexity grows, at least in the US, because that's literally what appears to be happening!
I would wager that if I look into relative size of a country's government and its concentration on wealth, I'd find that they're not terribly correlated; or if they are, that the data indicates that increasingly government complexity drives increasingly wealth concentration. But I don't have a lot of confidence in that wager! But I also certainly don't buy the naive "markets fix everything" argument, either. People love to game markets, and if they're not controlled in some fashion, fraud tends to win out every time. Just look at crypto!
Too generic terms become an issue at some point. "Government" and "market" are not one thing that you can easily measure to "big" or "small" or "good" or "bad".
To make a technical parallel can we really say "C is good, Java is bad"?
I think focus should be much more on discussing actual policies and their impact - which can become quite complex - rather than stamp everything with "more/less government/market" and then use the predefined belief that one or the other is good. I personally favor various policies, and I can't put all of them at the same time in a box with a label of "more government" or "less government".
> Given that the world CO2 level keeps rising, we can't eat fish because of heavy metals and we all have forever microplastics in us, I think it's fair to question some of our assumptions.
"Idiots will dump mercury in the river if you let them" is one of the assumptions.
> Agreed - however taxing externalities doesn't seem to be working out in practice (in the US).
It doesn't work if you don't actually do it.
But notice the important distinction between "carbon tax which is fully refunded to the population as a divided" and "tax things that aren't carbon to subsidize cronies who waste money on questionable hydrogen cars and ineffective carbon capture nonsense."
> Wealth inequality can rise without regulatory capture.
It's mostly regulatory capture. The primary driver of wealth inequality is corporate entity size. The billionaires are the early shareholders in megacorps.
The main exception is corporations violating antitrust laws, but this is still a form of regulatory capture, i.e. capturing the government to enforce contracts in restraint of trade when the government ought not to be doing that.
> So can the market provide those things or not? Clearly we want everyone to have an education not just the uber wealthy.
You don't have to be uber-wealthy to afford school. Most of what pays for public schools is the taxes paid by the parents of the students. Where this doesn't work is for the poorest or orphans etc., and this was traditionally handled through charity and scholarships. Ironically things government policies have been decimating by propping up real estate costs so high people can't afford space to have private community organizations, taking the money they could have donated to charity as taxes and spending it on boondoggles and military adventurism and otherwise encouraging people to rely on national governments rather than local communities.
Wealth in a free market is not "concentrated", it is created.
The total wealth in a free market country rises, which can only be explained by wealth being created rather than shifted around.
> Clearly we want everyone to have an education not just the uber wealthy.
Educational materials abound in this country, even for free. For example, I took some MIT courses that were on youtube, for free. I found my college textbook "Special Relativity" at a book sale for $.50. SAT prep books are available free at the library, and are often at thrift stores for a couple bucks.
It's never been easier to get educated.
It is not only about learning material being available. It is also about live circumstances of people. Think about when you are doing your learning. When do you have opportunity to learn. Think about what other people might be doing at that time, that prevents them from learning. Think about the mental framework you have, that enables you to learn and that others might not have.
Many times when I see some idle shop keeper wasting their time at candy crush on their phone, I think something like:
"Oh my, stop wasting your time! You could read something interesting or even learn a whole new subject!"
But then I remind myself from what a position I am thinking these thoughts. From what kind of knowledge and background. Could people start using their time better? Sure. But it will be damn hard for them, in contrast to probably many people here, including yourself, and we should not forget that. What's more is, that even if those people learned a lot about some subject, let's say even computer programming, there is no accreditation for them. Where can they go, to claim certificates or whatever, for their new knowledge, to get any chance of employment?
My friend Eric Engstrom (yes, that guy) got a programming job at Microsoft despite having zero education beyond high school. He became a team leader for DirectX.
I have a degree in Mechanical Engineering, not software. Yet I got jobs as a software developer with zero certifications.
At the D Language Foundation, we have never asked any of our participants for there certifications. Some have PhDs, some have high school diplomas. We only care about what they can do.
You don't need to have any certifications whatsoever in order to start your own software business and do contract work.
You cannot buy an education. It's necessary to put in the work to learn it one way or another. I learned that the hard way in college. No work, no pass.
This post is a great example of how very smart people can fall victim to their own biases.
When you put the "all are welcome" sign on the door of your programming language organization, you're not sampling from "all" but just the people who are already interested in programming, and especially the design and construction of programming languages. These people are inherently motivated to learn and particularly self motivated.
You know as well as anyone that languages in particular, far and away from all other projects in the area of computing, scratch the deepest itches that good developers have. Languages are a siren song for devs who have a burning desire to get to the bottom of computing machines.
And so of course this breed of dev is going to be great whether they have a PhD or not. They are the github-history all green every day crowd. You're skimming the cream of the crop.
But you can't build an entire economy out of the cream. The other people have to do things too. They can't just go to the flea market and pick up a book on "Special Relativity" and learn it. Heck, I got an BS degree in physics and I can't even do that. I needed someone to explain it to me, and a lot of students do. They need the environment that is conducive to learning. I think COVID really proved that people can't just sit on YouTube all day and learn from a screen.
I completely agree and would add that different people have different social needs. I love learning by myself. I don't need an example, I do it for fun. In the universities I studied, I have seen LOTS of people that were learning because everybody was learning. And they were smart, and capable, they just needed an environment and some structure.
While I don't "get" their way of being, I have to acknowledge such people do exist, and it is wasteful to consider the people I "get". Otherwise the other "types" might gather around some stupid leaders that come with ideas like "science kills babies let's burn all scientists on a stake!" (exaggerating a bit, but similar things did happen)
> Where can they go, to claim certificates or whatever, for their new knowledge, to get any chance of employment?
That is what I responded to, especially the "any chance" aspect.
A young colleague of mine wanted a job at a FAANG company. He did not have a programming degree or cert. He knew he'd be faced with the dreaded leetcode interview, and wanted to know how to proceed. I suggested to him to get the leetcode books, and study them for 3 weeks or so. He balked at that, and I said the 3 weeks would be the best investment of time he'd likely ever make. He got the point, and studied for 3 weeks. He aced the leetcode interview and got the well-into-6-figures job.
The people with get-up-and-go are going to find a way get what they want.
P.S. The people who are members of the D Language Foundation are all self-selected get-up-and-go types. I enjoy watching them grow into first class programmers.
BTW, here in Seattle we have a monthly "D Coffee Haus" meeting, where we talk about programming and airplanes. It's been going for a year now, and I should have thought of starting that a long time ago.
I get where you are coming from, I really do, I've worked with those self starters. I worked with a guy without any education past HS and he was great, he taught me a lot.
But the example was about a shop keeper playing candy crush on their phone, and you're relating it to experience with your highly motivated and bright colleagues working at your programming language organization, people I'm assuming you associate with based on their programming aptitude and innate interest in programming languages. How many shop keepers (the kind OP is referring to we're not talking about Good Will Hunting here) do you work with at your organization?
As an educator dealing with 20-somethings who are in the position of finding employment, I don't think what you're suggesting can scale. It's not a path the 100+ students I teach every semester can take. These students cannot pick up a leetcode book and study for 3 weeks and land a job at FAANG. Some of them have trouble landing a FAANG job with the degree, and the work experience, and project experience.
"The people with get-up-and-go are going to find a way get what they want."
Sure, this is just saying that the cream rises to the top. Maybe a handful of students could do it, but 90% of the rest of them not going to, so they need alternatives. And we need to provide those alternatives because like I said, you can't build an economy from cream.
95% of the people need a framework to educate themselves, they can't just go to youtube.com and come away with the ability to pass a Google interview in 3 weeks. They need focused, intensive study. A tight feeback loop. The ability to get 1:1 time with an expert to move past hurdles. The ability to work closely with peers and to work in groups. Broad and varied perspectives. Instruction from actual experts (which I will point out your college had and most people don't). You know, a real education.
While what you say is true, I think it is a failure of generalization. A few special cases show it is possible, but what you don't mention is how extraordinary these cases are and at what time they happened and what background, including ideas, information, location, and motivation the people had.
You can very much buy an education in many places. Money from parents pays for the best universities, no, actually schools already, the best teachers, the best atmosphere/setting for learning. While some children work on a farm, rich people's children will already be learning, simply because the parents can afford it.
There are many places, where it doesn't work like in your extraordinary examples. Just because something is possible for a few, it doesn't mean, that it is generalizable and that it can be done for everyone.
"One of the important ways we make use of donations is in awarding scholarships to highly skilled students. Each $5 you donate contributes to approximately one hour of work by a talented graduate student" from the dlang website.
I think it's good that scholarships are awarded, some money goes to graduate students doing work (even if I think the amount per hour is low), etc.
But I can't square your implications that this type of education is equivalent to self-taught when your own foundation seems to put an emphasis on it. Or is it just marketing for an audience that might believe that they're not equivalent?
Why is there this focus on people from formal education backgrounds or supporting people through scholarships to get a formal education when describing what a donation would go to?
I want to re-iterate. It's not that I believe you can just go sit in a class without focusing and acquire an education. I also don't believe that someone can't learn outside of a formal setting or even that they can't get superior results!
But, it seems to me that there's definitely some sort of difference between equally motivated people in a formal setting and in a self taught setting. And it seems to me that even the dlang foundation acknowledges that implicitly. Obviously there are lots of free resources provided by the foundation as well, so I can't argue there's a strong preference. But, if they were equivalent the foundation could just support one of them. And if a choice was to be made wouldn't the freely available resources be a more efficient allocation of donations?
Pointing to unusual people, then claiming that proves they exemplify what should be usual…
That isn’t an argument or solution for anything. That’s state some fact, then state your desired conclusion, without even an attempt at reasoning in between.
Show me any community that turns their success demographics around. Someone pointing at a few successful examples, and saying everyone should do that, won’t be how they did it.
People have suffered in disadvantaged demographics from the dawn of time. They are real. Nobody wants differences like that to exist, but they are pernicious. Context has a huge impact on people and bad contexts are often very self-reinforcing.
Speaking as someone who has been both a technical interviewer and an interviewee many times over the past 30 years, I find it a bit disingenuous to compare second hand bookstores to a formal primary or secondary education when it comes to their application in an active job market.
There's the Khan Academy, too. Apparently a lot of home schoolers rely on it, and it is used by students who need extra help.
It's true that what I wrote about is not formal education, but it is education nevertheless and freely available.
> Is it so simple? The highest marginal tax rate in the US is 50.3% (37% federal + 13.3% state in California). The highest marginal tax rate in Norway is 47.4%.
Marginal income tax rate. People's aggregate incomes are a drop in the bucket compared to the amount of wealth in the world.
I'm mostly a fan of free markets, but the way we've set up the game around the Western world, we're moving back towards a sort of feudal system made up of an asset owning upper class and then everyone else who needs to work to survive.
I think what we need is a 100% marginal estate tax. Maybe something along the lines of 1M$ tax free per child and spouse.
Everyone should have the right to vast financial success through free enterprise, but no one should be able to build multi generational dynasties, since it destroys the fabric of democracy over time.
In the US, capital gains are taxed at a different rate from ordinary income, so taxing the "rich" (where the money is) doesn't necessarily have to destroy investing (not to mention a lot of retirement is tied up in investing, the rich aren't the only investors).
Clinton's government balanced the budget and had a surplus by decreasing spending and increasing taxes. He backed off on some capital gains tax increases and still had the surplus.
The fact of the matter is that if the US government is going to outlay X% of GDP then it needs to match X% of GDP in revenue: that's what Clinton's government did. Outlays dropped from 20.7% of GDP to 17.6% of GDP, tax revenue increased from 17.0% of GDP to 20.0% of GDP. [1]
And that government did not defund Universities to do it (iirc they actually increased funding).
Norway's tax revenue as a % of GDP in 2023 was 41.4%. United States was 25.2% [2]
Your marginal rate comparison doesn't paint a fair comparison because a lot of their government revenue comes from VAT and a special very high petroleum tax (I couldn't find exact percentages). And I think they have fairly low income inequality[3].
[1] https://en.wikipedia.org/wiki/Economic_policy_of_the_Bill_Cl... (citing https://www.cbo.gov/sites/default/files/114th-congress-2015-...)
[2] https://www.oecd.org/content/dam/oecd/en/publications/report... [page 15]
[3] https://gateway.euro.who.int/en/hfa-explorer/gini-coefficien...
> Is it so simple? The highest marginal tax rate in the US is 50.3% (37% federal + 13.3% state in California). The highest marginal tax rate in Norway is 47.4%.
Sure. It’s not simple. But you’re missing a lot of the picture too. People with high wealth and ownership can leverage massive loopholes (like taking a loan with stock as collateral) which means they pay very little effective tax on their “income”: https://www.profgalloway.com/earners-vs-owners-2/
The solution is surely not the status quo.
> Markets aren't expected to account for externalities. Externalities are the things you're supposed to tax.
> You're describing regulatory capture. This is why governments are supposed to have limited powers. To keep them from passing rules that enrich cronies and entrench incumbents.
The problem is that those two principles are at odds with each other. You need the government to have enough power to fix externalities, but also limited power to avoid corruption.
Norwegian here. It's not at all comparable. Norway has a wealth tax (about 1.09%), lots of consumption-level taxes (25% VAT, fees on gas, etc.), high capital gains tax (37.85% flat, no "qualified dividends" or tax-free bonds or Roth loopholes or anything like that).
> There are far too many documented instances of it actually working to call it a fantasy.
There are no documented instances of a truly free market. The parent's point I think has less to do with "it has been tried and it failed" and moreso that the idea that truly free market can exist is pure fantasy.
FWIW - Costa Rica is probably the greatest example of a Libertarian's dream of a free market. I would love to show any free market absolutionist the colossal amount of time it takes to just pave 500m of a road in that country.
> There are no documented instances of a truly free market.
There's no such thing as pure water, either. Nor is there any person who has not had impure thoughts. Nor can you ever cut a board to an exact length. Nor has anything created by man (or nature) been perfect.
The historical reality is the more free a free market is, the better it performs.
A free market does not have to be a "truly free market" in order to deliver the goods.
>The historical reality is the more free a free market is, the better it performs.
Citation VERY MUCH needed. A free market leads to monopoly and abuse. It does not lead to competition, it does not lead to better long-term results, it leads to corruption, market capture, and oppression.
The United States, postwar Japan, postwar Germany, Hong Kong, Taiwan, S Korea, China, and so on.
How do you explain the scores of millions of people that came to the US, and still come, if the US free market is a hellhole of monopoly, abuse, corruption, and oppression?
The united states during its periods of greatest growth as well as the other environments you called out had strong regulatory environments to keep "the market" in check
I suspect you may be thinking that a free market is anarchy (no government). It isn't.
> The historical reality is the more free a free market is, the better it performs.
Performs for whom? The central idea of a free market is that is provides better goods and services and thus better outcomes for civilization. We have countless examples of innovations that have come through government intervention (internet, space grade goods and services, GPS, etc. just to name a few), so you simply cannot say in a deterministic way that a free market "performs better". This is simply NOT true.
FWIW - I'm a free market advocate, but I recognize markets and areas where externalities cannot be controlled for and thus require a centralized body to regulate.
> Performs for whom?
In the 19th century, the free market resulted in bootstrapping scores of millions of people up out of poverty into the middle class and beyond. The government was not involved in this.
> We have countless examples of innovations that have come through government intervention
We have far more from the free market. Have you ever looked at the number of patents?
As for the internet, that was simply a protocol. There were many other network protocols - Prodigy, RBBS, Bix, AOL, Ethernet, etc. Any time someone had two computers, they were connected with some form of network.
You're overlooking the grandaddy of networks - the telegraphy system. Yes, the first international binary network protocol. All later networks were based on ideas it pioneered. But somehow only the IP is valid?
Did you know that controled, powered flight came from the free market? Did you know that jet engines were developed thanks to funds from the free market, as the military saw no use for jet engines? The government did not get involved until they saw flying jet aircraft?
The free market also invented cars, bicycles, light bulbs, electric power generation utilities, telephones, circular saws, and on and on and on and on?
> I recognize markets and areas where externalities cannot be controlled for and thus require a centralized body to regulate
Externalities, such as pollution, are not free market, and are in the purview of government.
> In the 19th century, the free market resulted in bootstrapping scores of millions of people up out of poverty into the middle class and beyond. The government was not involved in this.
Did you know that the US railroad system was largely propped up by the US government during the 19th century, thus leading to the greatest exchange of goods and services across the whole of the US?
> Have you ever looked at the number of patents?
Did you even read the article?
Today, U.S. universities license 3,000 patents, 3,200 copyrights and 1,600 other licenses to technology startups and existing companies. Collectively, they spin out over 1,100 science-based startups each year, which lead to countless products and tens of thousands of new jobs. This university/government ecosystem became the blueprint for modern innovation ecosystems for other countries.
> Externalities, such as pollution, are not free market, and are in the purview of government.
You're proving my point yet again. If externalities are regulated ("purview of the government") then the good or service that is provided IS NOT REALLY A FREE MARKET. A truly free market would presume that any externality incurred would cause a subsequent good or service to be created to solve that externality.
You keep providing examples of the free market creating goods and services that are meaningful and beneficial as counter examples as to why they are better than government innovations. Yet, I am saying BOTH ARE IMPORTANT and one cannot unilaterally be true because we have cases on both side. In other words, it's not mutually exclusive, both can be true. Yet you continue to beat this drum that free market solves everything. Odd.
>Did you know that jet engines were developed thanks to funds from the free market, as the military saw no use for jet engines? The government did not get involved until they saw flying jet aircraft?
sigh At least try to look for examples that aren't so completely, utterly wrong. Which "flying jet aircraft" would that even be? The only one where you could even start to make that argument would be Heinkel's He178 prototype. Apart from the fact that it was explicitly designed to be monetized militarily...where do you think those funds came from in late 30s Germany, at one of the leading military plane manufacturers? (and please don't say Lufthansa...they didn't operate on a "free market" even since their inception in 26, and certainly not after 33).
You can't spell jet aircraft without military-industrial complex. Hell, even the first 707 family variant in service was a military one (KC-135).
Edit - almost overlooked that nugget:
>Externalities, such as pollution, are not free market, and are in the purview of government.
Ah yes, privatize profits, socialize costs. That kind of free market. I shouldn't have bothered.
It would be interesting to note how you define a free market in this context and what makes it “more free”.
Because a market can not be free unless there are rules and they are enforced.
Without rules and government intervention when necessary, what you get is the law of the jungle, which is precisely the thing the last 12000 years of human history has been about escaping.
A free market is not anarchy. It requires a government to protect rights, enforce contracts, and deal with externalities.
This is precisely my argument. A free market isn't really free if the government has to intervene in any form or manner. Per wikipedia:
https://en.wikipedia.org/wiki/Free_market> There are no documented instances of a truly free market.
But why is that interesting?
If you enter into a contract to sell your car to someone and then instead of paying you they steal your car and kill you, that's crime, not a free market. Killing people by dumping mercury into the river is still just crime. Killing people by burning dirty coal is something that should be crime, even if it officially isn't.
But this is different than banning things where each involved party is consenting, or imposing unfunded mandates or bureaucratic filing requirements. The less of those things there are, the freer the market is, and those places tend to do better than the places captured by central planners.
Moreover, the main point is completely valid. If Palm's product isn't as good as an iPhone then you don't have to buy it and then they go away. If the DMV sucks, what are you going to do?
> those places tend to do better than the places captured by central planners.
There is no deterministic evidence for this and you cannot unilaterally say that. The problem here is that the market/service requires context. The main point made was that you can take any market and it will eventually self correct - this is simply untrue and we have countless examples of this.