2007 Nobel Prize for Economics winner on free markets
 

Nobel economics winner says market forces flawed

commentary

Re: 2007 Nobel Prize for Economics winner on free markets
 

Pretty biased article from reuters. Hard to tell how biased without seeing the text of his remarks, but I'm guessing pretty biased.

Re: 2007 Nobel Prize for Economics winner on free markets
 

How so? Seems pretty freakin straight forward to me.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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Nobel economics winner says market forces flawed

commentary

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Professor Eric Maskin, one of three American economists to receive the award, said that he "to some extent" takes issue with free-market orthodoxy championed by U.S President George W. Bush and some other western leaders.

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If what Bush champions is "free market orthodoxy" then I agree, I am opposed to "free market orthodoxy."

Re: 2007 Nobel Prize for Economics winner on free markets
 

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If what Bush champions is "free market orthodoxy" then I agree, I am opposed to "free market orthodoxy."



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Its hard to tell from this article but it doesnt seem like he actually brought anything new to the debate. What did he get the nobel for again?

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"How do we ensure in the case of public goods that they are provided at all, and that they are provided at the right level, taking into account citizens' preferences?" he said.

A clean environment, for example, is not a private good in that "my enjoyment of it doesn't preclude yours," he said.

"So the theory of mechanism design asks what sort of procedures or mechanisms or institutions could be put in place which allow us to choose the right level," he said.

Those mechanisms could include taxes to allow the more efficient provision of public goods, he said.



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Just pick any random economist from the past 50 years and they are likely to say this. *Yawn*

Re: 2007 Nobel Prize for Economics winner on free markets
 

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If what Bush champions is "free market orthodoxy" then I agree, I am opposed to "free market orthodoxy."


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From the article:

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"So the theory of mechanism design asks what sort of procedures or mechanisms or institutions could be put in place which allow us to choose the right level," he said.

Those mechanisms could include taxes to allow the more efficient provision of public goods [such as the environment], he said.



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I don't think you would agree with this?

Re: 2007 Nobel Prize for Economics winner on free markets
 

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In its statement with the award, the Royal Swedish Academy of Sciences said the market's efficiency may be undermined because consumers are not perfectly informed, competition is not completely free

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Somebody needs to brush up on his Rothbard.

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and "privately desirable production and consumption may generate social costs and benefits."

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And public production and consumption may generate social costs and benefits.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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If what Bush champions is "free market orthodoxy" then I agree, I am opposed to "free market orthodoxy."



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Its hard to tell from this article but it doesnt seem like he actually brought anything new to the debate. What did he get the nobel for again?

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"How do we ensure in the case of public goods that they are provided at all, and that they are provided at the right level, taking into account citizens' preferences?" he said.

A clean environment, for example, is not a private good in that "my enjoyment of it doesn't preclude yours," he said.

"So the theory of mechanism design asks what sort of procedures or mechanisms or institutions could be put in place which allow us to choose the right level," he said.

Those mechanisms could include taxes to allow the more efficient provision of public goods, he said.



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Just pick any random economist from the past 50 years and they are likely to say this. *Yawn*

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He didn't win the Nobel for saying that free markets are imperfect. He won for mechanism design, which is a branch of game theory related to what procedures to put in place to help fix market imperfections. The fact that markets are imperfect is an assumption implicit in the whole enterprise, not a result.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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"How do we ensure in the case of public goods that they are provided at all, and that they are provided at the right level, taking into account citizens' preferences?" he said.

A clean environment, for example, is not a private good in that "my enjoyment of it doesn't preclude yours," he said.

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There you go, pvn. Shade that falls on your neighbor's property from your tree is a public good. A Nobel-winning economist said so.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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If what Bush champions is "free market orthodoxy" then I agree, I am opposed to "free market orthodoxy."


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From the article:

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"So the theory of mechanism design asks what sort of procedures or mechanisms or institutions could be put in place which allow us to choose the right level," he said.

Those mechanisms could include taxes to allow the more efficient provision of public goods [such as the environment], he said.



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I don't think you would agree with this?

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Well, no. I can agree that what he's calling "free market orthodoxy" (which is actually nothing of the sort) is bogus without embracing his particular solution to the problem.

I think in a sense, he's right, though. Taxes can allow a "more efficient provision of (so-called) public goods" if you just adopt the same mindset that the bureaucrat does; something I want is not provided at the level I personally would like in a market allocation, I can apply coercion and force to get the predetermined "correct" number of units produced, therefore, this must be a good thing.

The problem (ignoring the moral implications) is that there is no "correct" number - no one person's preference is inherently better than another.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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Well, no. I can agree that what he's calling "free market orthodoxy" (which is actually nothing of the sort) is bogus without embracing his particular solution to the problem.

I think in a sense, he's right, though. Taxes can allow a "more efficient provision of (so-called) public goods" if you just adopt the same mindset that the bureaucrat does; something I want is not provided at the level I personally would like in a market allocation, I can apply coercion and force to get the predetermined "correct" number of units produced, therefore, this must be a good thing.

The problem (ignoring the moral implications) is that there is no "correct" number - no one person's preference is inherently better than another.


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I understand completely that you can oppose “free market orthodoxy” without agreeing with his method of opposing it. He has provided his method of opposition. You have stated that you oppose free market orthodoxy. So I am confused. What exactly is "free market orthodoxy" and what would be your method of opposing it (if any).

This is very important PVN as your future Nobel prize is at stake.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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And public production and consumption may generate social costs and benefits.

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It's totally awesome how you totally not understand the concept of externalities.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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Well, no. I can agree that what he's calling "free market orthodoxy" (which is actually nothing of the sort) is bogus without embracing his particular solution to the problem.

I think in a sense, he's right, though. Taxes can allow a "more efficient provision of (so-called) public goods" if you just adopt the same mindset that the bureaucrat does; something I want is not provided at the level I personally would like in a market allocation, I can apply coercion and force to get the predetermined "correct" number of units produced, therefore, this must be a good thing.

The problem (ignoring the moral implications) is that there is no "correct" number - no one person's preference is inherently better than another.

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Of course there is a correct number (see Samuelson condition). The problem is that it's hard to find that correct number, even for the market.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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And public production and consumption may generate social costs and benefits.

[/ QUOTE ]

It's totally awesome how you totally not understand the concept of externalities.

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We get it you're an expert of economics but you know way too much to bother wasting time educating us dunces. Can we just take that as read from now on without the need for these little pointless snipes?

Re: 2007 Nobel Prize for Economics winner on free markets
 

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Nobel economics winner says market forces flawed

commentary

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So what? In the area of energy policy government hasn't had a stellar performance. When the Democrats took control of Congress I believe oil was around 60 bucks a barell. I said by energy companies with both fists because everything that the Democrats wanted to do tended to drive up the price of oil. Now oil is north of 85 bucks a barell. Bush would like to see more suppyly come to market. In no way do the ideas of the Nobel Prize winning economist validate the approach the Democrats have nor do his ideas state that Bush's ideas are worse than the ideas the Democrats have. He's saying his ideas are better than Bush's.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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The problem (ignoring the moral implications) is that there is no "correct" number - no one person's preference is inherently better than another.

[/ QUOTE ] Because mainstream economics does not judge the content of preferences (normatively many might believe in your substantive moral view that no preference is inherently better than another, but this is not presupposed; the 'official statement', is that preferences are taken as a given for scientific reasons, although one could argue that they aren't doing it for scientific reasons), they are able to come up with a 'correct' number here in principle (see link at bottom). The only way we can argue that the generated number is incorrect is in fact to deny the very premise you wish to assert (that no preferences are inherently better than another), by arguing, for example, that people's views on public goods are not mere preferences, or that some preferences shouldn't be taken into account.
individual valuations

However, one can certainly make an argument that the political process isn't very likely to lead to this number being realized.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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In its statement with the award, the Royal Swedish Academy of Sciences said the market's efficiency may be undermined because consumers are not perfectly informed, competition is not completely free
Somebody needs to brush up on his Rothbard.

[/ QUOTE ] Different definitions of efficiency. Mainstream economics uses a much stronger definition of efficiency; one that is less controversial than Rothbard's (i.e. if markets meet the standards of efficiency set by mainstream economists, this is a much stronger defense of the view that markets are efficient than Rothbard's; conversely, one could argue that markets meet Rothbard's standard, but that is not good enough).

Re: 2007 Nobel Prize for Economics winner on free markets
 

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Well, no. I can agree that what he's calling "free market orthodoxy" (which is actually nothing of the sort) is bogus without embracing his particular solution to the problem.

I think in a sense, he's right, though. Taxes can allow a "more efficient provision of (so-called) public goods" if you just adopt the same mindset that the bureaucrat does; something I want is not provided at the level I personally would like in a market allocation, I can apply coercion and force to get the predetermined "correct" number of units produced, therefore, this must be a good thing.

The problem (ignoring the moral implications) is that there is no "correct" number - no one person's preference is inherently better than another.


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I understand completely that you can oppose “free market orthodoxy” without agreeing with his method of opposing it. He has provided his method of opposition. You have stated that you oppose free market orthodoxy. So I am confused. What exactly is "free market orthodoxy" and what would be your method of opposing it (if any).

This is very important PVN as your future Nobel prize is at stake.

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Read what I wrote again. [img]/images/graemlins/smile.gif[/img]

I said if what Bush champions is "free market orthodoxy" than I oppose "free market orthodoxy". The point being that I what bush is championing, regardless of whether someone wants to call it "a pony for every child" or "pushing old ladies down in the street". The name is not the thing, what bush is championing is NOT "free market orthodoxy" even though somebody with some fancy prize might call it that.

Better?

Re: 2007 Nobel Prize for Economics winner on free markets
 

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And public production and consumption may generate social costs and benefits.

[/ QUOTE ]

It's totally awesome how you totally not understand the concept of externalities.

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It's totally awesome that all you ever do is assert your way to (non)victory.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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So what? In the area of energy policy government hasn't had a stellar performance. When the Democrats took control of Congress I believe oil was around 60 bucks a barell. I said by energy companies with both fists because everything that the Democrats wanted to do tended to drive up the price of oil. Now oil is north of 85 bucks a barell. Bush would like to see more suppyly come to market. In no way do the ideas of the Nobel Prize winning economist validate the approach the Democrats have nor do his ideas state that Bush's ideas are worse than the ideas the Democrats have. He's saying his ideas are better than Bush's.

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I'm not sure where you got the idea that I was trying to make a statement on energy policy, nor was I trying to make a particular point about Bush, although I do of course believe that he is deserving of a Nobel Prize for idiocy.

I just know how much people around here like to talk about the free market, so I thought the article was relevant.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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Well, no. I can agree that what he's calling "free market orthodoxy" (which is actually nothing of the sort) is bogus without embracing his particular solution to the problem.

I think in a sense, he's right, though. Taxes can allow a "more efficient provision of (so-called) public goods" if you just adopt the same mindset that the bureaucrat does; something I want is not provided at the level I personally would like in a market allocation, I can apply coercion and force to get the predetermined "correct" number of units produced, therefore, this must be a good thing.

The problem (ignoring the moral implications) is that there is no "correct" number - no one person's preference is inherently better than another.

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We shouldn't be ignoring moral implications, so we can stop right there. Though no one person's 'preference' may be inherently better than another, that still doesn't mean that there isn't a 'correct' number.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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[ QUOTE ]
Well, no. I can agree that what he's calling "free market orthodoxy" (which is actually nothing of the sort) is bogus without embracing his particular solution to the problem.

I think in a sense, he's right, though. Taxes can allow a "more efficient provision of (so-called) public goods" if you just adopt the same mindset that the bureaucrat does; something I want is not provided at the level I personally would like in a market allocation, I can apply coercion and force to get the predetermined "correct" number of units produced, therefore, this must be a good thing.

The problem (ignoring the moral implications) is that there is no "correct" number - no one person's preference is inherently better than another.

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We shouldn't be ignoring moral implications, so we can stop right there. Though no one person's 'preference' may be inherently better than another, that still doesn't mean that there isn't a 'correct' number.

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The moral implications makes PVN's case all the stronger. if no persons preference is bgetter than any others than the only correct number can be the number that is arrived at through voluntary transactions between consenting people with no outside influences forcing them to do one thing or another.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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[ QUOTE ]
Well, no. I can agree that what he's calling "free market orthodoxy" (which is actually nothing of the sort) is bogus without embracing his particular solution to the problem.

I think in a sense, he's right, though. Taxes can allow a "more efficient provision of (so-called) public goods" if you just adopt the same mindset that the bureaucrat does; something I want is not provided at the level I personally would like in a market allocation, I can apply coercion and force to get the predetermined "correct" number of units produced, therefore, this must be a good thing.

The problem (ignoring the moral implications) is that there is no "correct" number - no one person's preference is inherently better than another.

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We shouldn't be ignoring moral implications, so we can stop right there. Though no one person's 'preference' may be inherently better than another, that still doesn't mean that there isn't a 'correct' number.

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Oh, good. Let's talk about moral implications.

I don't think I have the "correct" number of cars. I'm going to use force to get you to buy me another car. I really need the car, trust me, I just told you that I don't have the correct number.

What do you think of the moral implications of that?

Re: 2007 Nobel Prize for Economics winner on free markets
 

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Nobel economics winner says market forces flawed

commentary

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Professor Eric Maskin, one of three American economists to receive the award, said that he "to some extent" takes issue with free-market orthodoxy championed by U.S President George W. Bush and some other western leaders.

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If what Bush champions is "free market orthodoxy" then I agree, I am opposed to "free market orthodoxy."

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From an outside viewpoint I think it largely is yes.

Anyway I don't think his 'design' can be used as an argument for or against anarcho-capitalism.

I read up on bits of it and is clear it is a design where a specific outcome is desired from the get-go, so it does not seem applicable to an AC standpoint which probably has no desire to have 'specific outcomes' defined from the start.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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The moral implications makes PVN's case all the stronger. if no persons preference is bgetter than any others than the only correct number can be the number that is arrived at through voluntary transactions between consenting people with no outside influences forcing them to do one thing or another.

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The standard condition for optimal provision of public goods uses the pareto concept. Which in a nutshell is entirely based upon the premise of purely voluntary transactions.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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The moral implications makes PVN's case all the stronger. if no persons preference is bgetter than any others than the only correct number can be the number that is arrived at through voluntary transactions between consenting people with no outside influences forcing them to do one thing or another.

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The standard condition for optimal provision of public goods uses the pareto concept. Which in a nutshell is entirely based upon the premise of purely voluntary transactions.

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From what I remeber of my economics degree Pareto is about assigning ownership to everything then letting people get on with it through free trade. I'm all for that. I take it you're opposed to government then?

Re: 2007 Nobel Prize for Economics winner on free markets
 

George Bush is pretty god damn far from advocating anything like free market othordoxy. Mercantilism is the worst most twisted bastardisation of capitalism you can get.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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From what I remeber of my economics degree Pareto is about assigning ownership to everything then letting people get on with it through free trade. I'm all for that. I take it you're opposed to government then?

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I'm not opposed to government as such, I'm a statist. I'm opposed to the way government is run in reality though.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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George Bush is pretty god damn far from advocating anything like free market othordoxy. Mercantilism is the worst most twisted bastardisation of capitalism you can get.

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Well, I didn't say my view - I said outside view. [img]/images/graemlins/smile.gif[/img]

To give some perspective on what I mean: Anarchists around my parts are very rarely capitalist, they are almost always leftist. They tend to hate the US, and they tend to put an = between the US and the dangers of capitalism. They oppose capitalist forces with largely the same arguments that AC opposes the state. If somebody had explained AC to them, I am fairly certain they would get nightmares.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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From what I remeber of my economics degree Pareto is about assigning ownership to everything then letting people get on with it through free trade. I'm all for that. I take it you're opposed to government then?

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I'm not opposed to government as such, I'm a statist. I'm opposed to the way government is run in reality though.

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I don't understand you're not opposed to fairytale governments?

Re: 2007 Nobel Prize for Economics winner on free markets
 

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So what? In the area of energy policy government hasn't had a stellar performance. When the Democrats took control of Congress I believe oil was around 60 bucks a barell. I said by energy companies with both fists because everything that the Democrats wanted to do tended to drive up the price of oil. Now oil is north of 85 bucks a barell. Bush would like to see more suppyly come to market. In no way do the ideas of the Nobel Prize winning economist validate the approach the Democrats have nor do his ideas state that Bush's ideas are worse than the ideas the Democrats have. He's saying his ideas are better than Bush's.

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I'm not sure where you got the idea that I was trying to make a statement on energy policy, nor was I trying to make a particular point about Bush, although I do of course believe that he is deserving of a Nobel Prize for idiocy.

I just know how much people around here like to talk about the free market, so I thought the article was relevant.

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And the Nobel Prize winner stated the following:

"Markets work well with goods that economists call private goods" like cars or other consumer durables, Maskin said in his office at the Institute for Advanced Study in Princeton, New Jersey.

So no problem with free markets for private goods. The Bush "free market orthodoxy" is fine apparently.

"The market doesn't work very well when it comes to public goods," said Maskin, a slight, soft-spoken 57-year-old who lives in a house once occupied by Albert Einstein.

So the Nobel Prize Winner is discussing public goods when he rejects the Bush "free market orthodoxy."

He further states about specific public goods:

"How do we ensure in the case of public goods that they are provided at all, and that they are provided at the right level, taking into account citizens' preferences?" he said.

A clean environment, for example, is not a private good in that "my enjoyment of it doesn't preclude yours," he said.

"So the theory of mechanism design asks what sort of procedures or mechanisms or institutions could be put in place which allow us to choose the right level," he said.



A "clean environoment" and energy go hand in hand. The energy sector that effects the environment has all kinds of government laws and regulations associated with it. It can hardly be construed as something that operates in free market. Part of the Bush "free market orthodoxy" regarding public goods associated with the environment are to loosen regulations and government restrictions in various areas to increase supplies of energy related products like oil. The regulations and government retrictions are a product of the Democratic party basically as they are supported by the environmental lobbies. Only an idiot would draw the conclusion that the current state of affairs in energy policy that relates to public goods is somehow a product of Bush "free market orthodoxy." What Maskin is stating is that the Bush "free market orthodoxy" is not a way to change the policy related to the public goods associated with energy. However, it's also not an endorsement of the current government regulations and restrictions that exist either. You seem to be implying more or less that Maskin is endorsing the current state of affairs. Not my take at all. I realize you like to post links without doing too much thinking though.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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I don't understand you're not opposed to fairytale governments?

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I prefer the fairytale of a functioning minimalist state over the fairytale of a functioning non-state, like the vast majority of economist (and by vast I mean 99% and more).

Re: 2007 Nobel Prize for Economics winner on free markets
 

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George Bush is pretty god damn far from advocating anything like free market othordoxy. Mercantilism is the worst most twisted bastardisation of capitalism you can get.

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I'm not going to check the numbers, but I'd bet that the Bush Administration has overseen a larger absolute negative balance of trade than any other government of any other country at any point in human history. And they haven't really worried about it. How could you possibly call them mercantilist?

Re: 2007 Nobel Prize for Economics winner on free markets
 

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And public production and consumption may generate social costs and benefits.

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It's totally awesome how you totally not understand the concept of externalities.

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Public actions don't have externalities?

natedogg

Re: 2007 Nobel Prize for Economics winner on free markets
 

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Public actions don't have externalities?

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How is this relevant in the public goods context?

Re: 2007 Nobel Prize for Economics winner on free markets
 

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Different definitions of efficiency. Mainstream economics uses a much stronger definition of efficiency; one that is less controversial than Rothbard's (i.e. if markets meet the standards of efficiency set by mainstream economists, this is a much stronger defense of the view that markets are efficient than Rothbard's; conversely, one could argue that markets meet Rothbard's standard, but that is not good enough).

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In its statement with the award, the Royal Swedish Academy of Sciences said the market's efficiency may be undermined because consumers are not perfectly informed ,

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The issue with the "stronger" definition of efficiency (which is in reality weaker) is that Rothbard understands that informational barriers must exist while mainstream economists work on models where it either doesn't or has been minimized to unrealistic levels. Until such levels of information can be accomplished in reality mainstream economics definition of efficiency will be weak and Rothbard's strong.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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Read what I wrote again.

I said if what Bush champions is "free market orthodoxy" than I oppose "free market orthodoxy". The point being that I what bush is championing, regardless of whether someone wants to call it "a pony for every child" or "pushing old ladies down in the street". The name is not the thing, what bush is championing is NOT "free market orthodoxy" even though somebody with some fancy prize might call it that.

Better?


[/ QUOTE ] Yes, much better, thanks. I didn't catch that key "if" the first time around.

Re: 2007 Nobel Prize for Economics winner on free markets
 

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[ QUOTE ]
George Bush is pretty god damn far from advocating anything like free market othordoxy. Mercantilism is the worst most twisted bastardisation of capitalism you can get.

[/ QUOTE ]

I'm not going to check the numbers, but I'd bet that the Bush Administration has overseen a larger absolute negative balance of trade than any other government of any other country at any point in human history. And they haven't really worried about it. How could you possibly call them mercantilist?

[/ QUOTE ]

What does the balance of trade have to do with mercantilism?

Re: 2007 Nobel Prize for Economics winner on free markets
 

moreover, whats wrong with a negative balance of trade?

Re: 2007 Nobel Prize for Economics winner on free markets
 

[ QUOTE ]
[ QUOTE ]
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George Bush is pretty god damn far from advocating anything like free market othordoxy. Mercantilism is the worst most twisted bastardisation of capitalism you can get.

[/ QUOTE ]

I'm not going to check the numbers, but I'd bet that the Bush Administration has overseen a larger absolute negative balance of trade than any other government of any other country at any point in human history. And they haven't really worried about it. How could you possibly call them mercantilist?

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What does the balance of trade have to do with mercantilism?

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I think our ideas of what constitues mercantilism are pretty far apart here. My understanding was a system aimed at creating a favorable balance of trade, with the intention of concentrating capital in the country.