"When two people trade, both win. No one buys a bar a soap unless the money they’re spending for the soap is worth less to them than the soap itself."
Huge fail. People simply aren't rational actors. What about the case where an actor buys what he wants to buy, but that's not what he needs? You may want cigarettes and lottery tickets, but to say that you benefit from buying them, because otherwise you wouldn't buy them is stupidity.
To clarify, I'm distinguishing the transient benefit of "yay, I got what I wanted" from a productivity-enhancing benefit.
What about the case where an actor buys what he wants to buy, but that's not what he needs?
Who are you to say what he needs? Obviously by your values, the cigarettes aren't "correct", but it's really not your life to live.
Anyway, I think that Godin has it right as far as he goes. However, a market cannot function where there's no reasonable expectation of property rights. I mean, you're not going to risk investing in the drip irrigation system if you're afraid that the local warlord is going to just shake you down for any money you make, and maybe even rape your daughter in the process. And you're less likely to enter into a contract to partner with someone else if there's no court system to enforce the contract.
This is why so much of the aid to places like those in Africa, where there is no effective protection of property and no established system of enforcing contracts, at least for the little guy, is an abject failure. Much of it winds up being absorbed by the parties other than those for whom it was intended, and in fact makes the problem worse by strengthening those local bullies.
Godin is right, but before his solution can be pursued, we need to stop providing the sort of aid that so frequently perpetuates the bad system.
Free-market liberalism has been the dominant ideology for almost 200 years. If it hasn't solved poverty yet, there must be something wrong with the argument that it will inevitably solve poverty.
If it hasn't solved poverty yet, there must be something wrong
Or, perhaps it hasn't really been tried. I would challenge you to cite an area where the market really is free. I don't think there's any industry for which you could make this claim. But the areas that have come closest are also the ones that have shown the greatest advances, and the most productivity.
While I'm afraid of derailing off the topic of solving poverty, I think it's important to point out how the free-market fallacy is central in the current healthcare debate. Those in favor of universal healthcare argue that the free market system has failed. The funny thing is, the current healthcare industry is just about the least free market in America. In particular, bizarre insurance regulations, following salary controls (put into place by FDR, but doesn't it sound familiar today?) set up an environment where it's virtually impossible for an individual to obtain health insurance, with insurance now being almost entirely provided by either the employer or the government. This wasn't because of the free market -- it's because of meddling of government.
[+] [-] JabavuAdams|16 years ago|reply
Huge fail. People simply aren't rational actors. What about the case where an actor buys what he wants to buy, but that's not what he needs? You may want cigarettes and lottery tickets, but to say that you benefit from buying them, because otherwise you wouldn't buy them is stupidity.
To clarify, I'm distinguishing the transient benefit of "yay, I got what I wanted" from a productivity-enhancing benefit.
[+] [-] CWuestefeld|16 years ago|reply
Who are you to say what he needs? Obviously by your values, the cigarettes aren't "correct", but it's really not your life to live.
Anyway, I think that Godin has it right as far as he goes. However, a market cannot function where there's no reasonable expectation of property rights. I mean, you're not going to risk investing in the drip irrigation system if you're afraid that the local warlord is going to just shake you down for any money you make, and maybe even rape your daughter in the process. And you're less likely to enter into a contract to partner with someone else if there's no court system to enforce the contract.
This is why so much of the aid to places like those in Africa, where there is no effective protection of property and no established system of enforcing contracts, at least for the little guy, is an abject failure. Much of it winds up being absorbed by the parties other than those for whom it was intended, and in fact makes the problem worse by strengthening those local bullies.
Godin is right, but before his solution can be pursued, we need to stop providing the sort of aid that so frequently perpetuates the bad system.
[EDIT: fix grammar error]
[+] [-] cia_plant|16 years ago|reply
[+] [-] CWuestefeld|16 years ago|reply
Or, perhaps it hasn't really been tried. I would challenge you to cite an area where the market really is free. I don't think there's any industry for which you could make this claim. But the areas that have come closest are also the ones that have shown the greatest advances, and the most productivity.
While I'm afraid of derailing off the topic of solving poverty, I think it's important to point out how the free-market fallacy is central in the current healthcare debate. Those in favor of universal healthcare argue that the free market system has failed. The funny thing is, the current healthcare industry is just about the least free market in America. In particular, bizarre insurance regulations, following salary controls (put into place by FDR, but doesn't it sound familiar today?) set up an environment where it's virtually impossible for an individual to obtain health insurance, with insurance now being almost entirely provided by either the employer or the government. This wasn't because of the free market -- it's because of meddling of government.