Re: OT: Politics and other non-Debian ramblings
Paul Johnson wrote:
Joe wrote:
Paul Johnson wrote:
Laissez-faire economics is an impossible pipe dream and Germany proved
it. Taken to it's natural end, you get Germany's pre-WWII out-of-control
rapid inflation where soon it takes millions of dollars just to make a
basic grocery run.
So... in how many countries does the government not have a monopoly on
printing money? Where would people have got the wheelbarrows full of
millions of Marks if the government hadn't put them into circulation?
All of them that don't have their currency backed by a commodity. Money
hasn't been a tangible concept in the US since funds stopped being backed
by gold. Interest and fudged numbers accidentally creates money in the
banking system all the time.
Yes, that's true now, but wasn't in the Weimar Republic. There were
actual high-denomination notes in use in large quantities. The banks
didn't print them. It's not a good example.
Nor could the banks even today 'create' money in that kind of quantity.
They do indeed lend more than they have, by trading on their reputations
in effectively issuing IOUs. Stock is also money, a company starting up
and issuing new stock is printing money. Both these cases are limited by
perception. The stockholders of the new company have exchanged real
money for stock, and now own something partly intangible. The company
could not print stock in excess of what it could sell, or at least
there'd be no point. It can issue new stock only in proportion to the
potential buyers' perceptions of the company's worth.
The bank that lends more than it has risks its debts being called in,
causing bankruptcy. That risk is generally small, but the more the bank
overlends, the larger the risk. Lending thousands of times its assets
would be asking for trouble.
Hyper-inflation is not a disease of the free market, but a disease of
national governments.
The free market does have an enormous disadvantage, which is that it is
not self-sustaining. The great benefit of a free market in consumables
is that it invokes one of the very few negative feedback systems in
human psychology, the so-called 'law of supply and demand'. Negative
feedback systems are easy to stabilise.
Unfortunately, there is no similar negative feedback system in the
relationships between competitors, whether in supply or demand. The
large company that achieves a genuine competitive advantage over the
others will get larger, and the only limiting factor is incompetence,
the Peter Principle.
In most cases, the economies of scale which give large companies an
advantage over smaller ones is more than outweighed by incompetence
and mismanagement which seems proportional to at least the square of
the number of employees. If a company can remain competent, by being
directed by a single competent person, then the only limit to market
share is the 100% one.
That's why states that consider the law of supply and demand to be
desirable will have laws concerning market share. Except, of course, in
cases where a single company is of such enormous strategic importance
to a state that the law is willing to look the other way. Which at least
points us back in the general direction of being on-topic.
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