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Old 08-10-2007, 01:11 AM
doucy doucy is offline
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Default Question about legit vs illegitimate businesses

It is the position of ACists that in the long run, illegitimate businesses cannot compete with legit businesses. An illegitimate business being one that relies on violence, theft, or defrauding customers in order to make money (other things too, but those would be the main three, I'd think). Makes sense.

But then logically, it should follow that all illegitimate governments will ultimately fail, as they rely on taxing the citizenry (theft), among other things. And history will show that all illegitimae governments DO ultimately fail.

To me, the problem arises with the word "ultimately." Governments can take the better part of a millenium before they finally go under. If an illegitimate government can last that long, why can't an illegitimate private company last that long?

Seems to me that if the mafia has me by the balls, and it won't let go until my great great great grandchildren finally come around, then this really isn't much different from a place where I have to pay 35% of my income for the government to leave me alone.
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  #2  
Old 08-10-2007, 04:44 AM
tomdemaine tomdemaine is offline
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Default Re: Question about legit vs illegitimate businesses

Are you pro illegitimate people taking your money or anti it?
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  #3  
Old 08-10-2007, 04:53 AM
AWoodside AWoodside is offline
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Default Re: Question about legit vs illegitimate businesses

The governments monopoly on the use of coercive violence exists because the people under it believe that this is a desirable state of affairs. If we ever reach a point where people don't believe this we will quickly see the powers of 'illegitimate' organizations wane.
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  #4  
Old 08-10-2007, 05:14 AM
Phil153 Phil153 is offline
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Default Re: Question about legit vs illegitimate businesses

[ QUOTE ]
If an illegitimate government can last that long, why can't an illegitimate private company last that long?

[/ QUOTE ]
They can and they do, especially where governments are weak or non existent.

[ QUOTE ]
It is the position of ACists that in the long run, illegitimate businesses cannot compete with legit businesses.

[/ QUOTE ]
This is another in a long list of AC silliness. If the core business of illegitimate businesses is run as any other business, but they use threats, intimidation, collusion, kidnappings, and so on in order to get what they want, get favorable deals, gain monopoly in an area, and so on, then there's no reason they can't prosper. This is how the mafia works today, and it's very successful at it, but of course kept in control by the government.

I am curious as to how ACers think an ethical company is more profitable than an unethical one, especially in a world where suppliers are often anonymous to the end purchaser (hence, no arguments from reputation).

Tom,

you seem to be missing the point that government (and those in them) are under the universal rule of law. Their use of force has a very different kind of legitimacy to that of the mafia, operating under their own whim and constrained by no moral or ethical code.
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  #5  
Old 08-10-2007, 05:37 AM
tomdemaine tomdemaine is offline
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Default Re: Question about legit vs illegitimate businesses

[ QUOTE ]


Tom,

you seem to be missing the point that government (and those in them) are under the universal rule of law. Their use of force has a very different kind of legitimacy to that of the mafia, operating under their own whim and constrained by no moral or ethical code.

[/ QUOTE ]

Actually the mafia have a pretty strong ethical code (snitching is evil respect the family etc). I don't understand what a "universal rule of law" is or how you think that anyone in the government is constrained by anything other than what we let them get away with. The OP knows that the government is illegitimate he just hasn't made the leap to take a stand on principle and say, lets deal with this form of illegitimate force now and if it doesn't take and another government reforms we'll deal with that form too, which is fair enough because there's enough propaganda out there to make that leap incredibly difficult. It's another story of "but what if we get back to the current situation wouldn't that be terrible?" Implicit in that statement is a rejection of the state. You just have to see it. I'm not trying to be condescending here it took me ages to come to the that logical conclusion it's tough to see those who taught you as at best misguided and at worst malicious liars.
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  #6  
Old 08-10-2007, 05:45 AM
ShakeZula06 ShakeZula06 is offline
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Default Re: Question about legit vs illegitimate businesses

[ QUOTE ]
[ QUOTE ]
If an illegitimate government can last that long, why can't an illegitimate private company last that long?

[/ QUOTE ]
They can and they do, especially where governments are weak or non existent.

[/ QUOTE ]
Last time I checked governments are by definition the anti-thesis of "weak or non-existent" in all black markets and they just happen to be the areas where both illegitimate businesses and violence thrive.

Wierd how that works, isn't it?
[ QUOTE ]
This is another in a long list of AC silliness. If the core business of illegitimate businesses is run as any other business, but they use threats, intimidation, collusion, kidnappings, and so on in order to get what they want, get favorable deals, gain monopoly in an area, and so on, then there's no reason they can't prosper. This is how the mafia works today, and it's very successful at it, but of course kept in control by the government.

[/ QUOTE ]
Explain to me why it was only during prohibition that the mob dominated the alcohol market then. I guess I'm just silly for knowing how to put two and two together.
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I am curious as to how ACers think an ethical company is more profitable than an unethical one, especially in a world where suppliers are often anonymous to the end purchaser (hence, no arguments from reputation).

[/ QUOTE ]
Uh, outiside of rare cases this isn't realistic. Reputation and competition is the whole point of why a market works.

I am curious as to how you think an elected government official will see it in his best interests to act ethically rather then unethically.
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  #7  
Old 08-10-2007, 06:14 AM
ShakeZula06 ShakeZula06 is offline
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Default Re: Question about legit vs illegitimate businesses

OP,

Here's an old post of mine dealing with the nature of the black market and why illegitmate businesses survive-
[ QUOTE ]
It's on a black market. They have to spend a lot of money defending themselves from police knocking down their doors. If they get caught dealing they're screwed by current laws. They also don't have access to legitimate arbitration and courts, which usually leads to more violence. They also can't operate in the same effecient manner legitimate businesses can (ie, you don't see sneaker dealers selling shoes on street corners do you). All of these not only drive up costs and in effect prices, but also the risk associated with dealing. Since there's more risk involved (a) On average more intelligent people move on to legitimate businesses, leaving less intelligent people with on average less efficient business models and (b) those that do participate want more money to make up for the added risk, passing those costs on to the consumer (Would you rather make $50,000 doing something legal or doing something illegal, how much more money would you have to be making to make up for the risk associated with doing something illegal?)


[/ QUOTE ]
You'll notice that among non-black markets there is very little violence in the market. However what has been chosen in non-black markets is something that must be much more effective (being that it's used much more often then violence) for unethical market actors-take a guess-government intervention in the market in the form of favorable regulation, tax loop holes, corporate welfare, no bid government contracts, you know, all the works.

Governments continue to exist because a large amount of people accept it's existence. It isn't difficult to see why, patriotism (basically religion of the state) has been indoctinated in our heads since we could comprehend such concepts. So, essentially the same reason why the majority of Americans are Christians.

edt:
Here's another post of mine over lack of concern for violence in the market-
[ QUOTE ]
For starters, a state creates tons of violence. In the 20th century 10s of millions of people were killed either by their own state, or in state on state wars. It's not even a matter of which prevents more violence, the state has always been a leading factor in violence in it's history. The Iraq War simply wouldn't have been possible for a free market to do. From an investing standpoint the Iraq War has been a very -$EV decision. The people making money off the war (contractors and mercenary forces) differ from those that pay for it (taxpayers who really had no say in the matter at the time).

Simply put, on a free market the rewards of cooperation outweigh the "rewards" (quotations because it's rarely profitable) of conflict. Now, unfortunately some will make the -EV decision to turn to aggression rather then cooperation, and people should defend against that. We don't think planning ahead of time is particularly useful. No one could really predict ahead of time how the free market would solve various problems. When the internet was created, do you think anyone could accurately predict then how the internet would unfold? Of course I doubt you see anything wrong with the internet, but just wait, congress will begin soon enough to regulate the internet, making up reasons and fear mongering the whole way (just like the justifications for the internet gambling bill, the government wasn't getting their piece so they decided Americans need to spend their money in ways that they could). Government really is a mafia. They want a piece of everything. And of course one of a mafia's first objectives is forcing people to pay their protection money "for their own good".

In a free market people have various problems, and someone acts to meet those demands (usually for profit but often through charity too). I see no reason why hiring a police agency would cause any free riding problems at all. Delagating security to another company may not even be as effecient as simply using your own means of protection. Although it's 21 pages The not so wild, wild west may have some answers on how a decentralized area would work. There was very little government to be had at all and violence was much lower then it's eastern and southern couterparts at the time (not to mention a lot lower then violence seen today). In the years following state intervention, crime rates immediately began rising.


[/ QUOTE ]
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  #8  
Old 08-10-2007, 06:19 AM
bkholdem bkholdem is offline
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Default Re: Question about legit vs illegitimate businesses

[ QUOTE ]
It is the position of ACists that in the long run, illegitimate businesses cannot compete with legit businesses. An illegitimate business being one that relies on violence, theft, or defrauding customers in order to make money (other things too, but those would be the main three, I'd think). Makes sense.

But then logically, it should follow that all illegitimate governments will ultimately fail, as they rely on taxing the citizenry (theft), among other things. And history will show that all illegitimae governments DO ultimately fail.

To me, the problem arises with the word "ultimately." Governments can take the better part of a millenium before they finally go under. If an illegitimate government can last that long, why can't an illegitimate private company last that long?

Seems to me that if the mafia has me by the balls, and it won't let go until my great great great grandchildren finally come around, then this really isn't much different from a place where I have to pay 35% of my income for the government to leave me alone.

[/ QUOTE ]

Assuming what you say is true still you must recognize this:

No mafia will be one unitifed group with a single leader and millions and millions of soldiers with a territory of the USA. There will always be competing mafia's in different area's to keep the negative impacts low.

Moreover, on the local level citizens can band together and stand up to the mafia (even if stealthily). This can not be done with government because the government can call in unlimited resources, something the mafia can not and will not do.
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  #9  
Old 08-10-2007, 10:18 AM
pvn pvn is offline
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Default Re: Question about legit vs illegitimate businesses

[ QUOTE ]
It is the position of ACists that in the long run, illegitimate businesses cannot compete with legit businesses. An illegitimate business being one that relies on violence, theft, or defrauding customers in order to make money (other things too, but those would be the main three, I'd think). Makes sense.

But then logically, it should follow that all illegitimate governments will ultimately fail, as they rely on taxing the citizenry (theft), among other things. And history will show that all illegitimae governments DO ultimately fail.

To me, the problem arises with the word "ultimately." Governments can take the better part of a millenium before they finally go under. If an illegitimate government can last that long, why can't an illegitimate private company last that long?

Seems to me that if the mafia has me by the balls, and it won't let go until my great great great grandchildren finally come around, then this really isn't much different from a place where I have to pay 35% of my income for the government to leave me alone.

[/ QUOTE ]

As any poker player should realize, there are no certainties, only probabilities. It's *likely* that legitimate, vouluntary businesses will outcompete violent, illegitimate businesses. However, there's more to it than just that. If a violent organization is big enough, it can very well crush the competition. We commonly refer to this condition as the "Death Star Objection" since you often see something like "Oh, well, what would AC do if the death star showed up? Huh?!" Obviously, "AC" would get blown to bits. But so would any state. Voluntary interations are not a magic bullet that automatically slay all thugs, stop all violence.

"illegitimate" governments can (and do) persist because lots of people feel they ARE legitimate. Just like the death star can blow Alderan to bits, the overwhelming number of people who buy into statism can easily steamroll those who seek liberty.

If you want to see some "empirical" data about legitimate businesses and illegitimate businesses competing head to head, you need look no further than Las Vegas. The mob ran all the casinos in town - until the government finally allowed corporate ownership of casinos. You can thank Howard Hughes.
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  #10  
Old 08-10-2007, 10:23 AM
pvn pvn is offline
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Default Re: Question about legit vs illegitimate businesses

[ QUOTE ]
[ QUOTE ]
If an illegitimate government can last that long, why can't an illegitimate private company last that long?

[/ QUOTE ]
They can and they do, especially where governments are weak or non existent.

[/ QUOTE ]

More often, they flourish where governments are strong. Mercantilishm FTW.


[ QUOTE ]
This is how the mafia works today, and it's very successful at it, but of course kept in control by the government.

[/ QUOTE ]

LOL. THe mafia only comes into being when governments impose prohibition.

[ QUOTE ]
I am curious as to how ACers think an ethical company is more profitable than an unethical one, especially in a world where suppliers are often anonymous to the end purchaser (hence, no arguments from reputation).

[/ QUOTE ]

If the violence-based business model is so much better than the voluntary transactions-based business model, why does the mob restrict itself to contraband? Why doesn't it compete in the soda market, or the ice cream market? Why, when it DOES compete head-to-head with legitimate businesses (cf alcohol distribution before and after prohibition), does it invariably lose?

[ QUOTE ]
you seem to be missing the point that government (and those in them) are under the universal rule of law. Their use of force has a very different kind of legitimacy to that of the mafia, operating under their own whim and constrained by no moral or ethical code.

[/ QUOTE ]

LOL. "it's not bad when the guys I like do it."
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