[MrBill]

I agree that there is nothing revolutionary in principle and that we can make significant progress on these issues without having to resort to re-inventing the wheel. Once we optomize the present system, we can look at changes to bring further improvements. It will not be easy, but you must not judge all economies and all politicians by the failures in America. There are some good governments that are getting the basics right. None are without their faults. All can be improved.

CEE is a good example. Since the fall of communism many of these newly market based economies did revolutionary things with their economies and tried new ideas. Some of those ideas have worked well. They have resulted in growth twice as high as in the EU over the past decade and not all that growth was due to playing catch-up or starting from a low base. The banking system in many CEE countries is fundamentally stronger than in France or Germany for example. It is easier to make intelligent changes when you start with a clean slate and do not have so many vested interests, but we have learned a lot from their experience.

For example, the SZDSZ junior coalition party in Hungary is calling for flat taxes of 20% to simplify administration and cast the net further bringing in more revenue after the first year. They also propose to raise corporate taxes from 16% to 20% and lower personal taxes from 21.5% to 20% while keeping VAT (excluding transport and prescription drugs) at 20%. Almost perfect. Harmonize taxes and eliminate tax avoidance or financial engineering to lower taxes. 20% is 20%. Needless to say the Socialists are against it. They are still stuck in the mindset that flat taxes hurt the poor, while refusing to ackowledge that a lower flat tax brings in more revenue and lowers costs of collection and enforcement while encouraging the market and entrepreneurs to work their magic. So the problem is not politicians per say, but parties with entrenched interests.

[rogerhb]

$this->bbcode_second_pass_quote('MrBill', 'O')nce we optomize the present system,....

[jaws]

You cannot optimize the present system. The present system resists optimality. The purpose of political power is to subvert the optimality of the free market with the plans and intentions of politicians. It is not optimal by definition.

Arguing over the ideal form of taxation is pointless. The only ideal tax is no tax. Every other form of taxation is going to cause disruption in the economy.

[rogerhb]

$this->bbcode_second_pass_quote('jaws', 'A')rguing over the ideal form of taxation is pointless. The only ideal tax is no tax. Every other form of taxation is going to cause disruption in the economy.

[jaws]

People can hire their own protection agency. There's no need for volunteers, however if you wish to volunteer to protect someone that's perfectly legitimate.

[Z]

$this->bbcode_second_pass_quote('jaws', 'P')eople can hire their own protection agency.

[rogerhb]

$this->bbcode_second_pass_quote('jaws', 'P')eople can hire their own protection agency. There's no need for volunteers, however if you wish to volunteer to protect someone that's perfectly legitimate.

[jaws]

$this->bbcode_second_pass_quote('rogerhb', 'Y')ou are seriously suggesting this? So poor have no protection and rich can employ whatever thugs they can afford?

So your golden era is not the Victorian times, it's actually the dark ages?

[Z]

$this->bbcode_second_pass_quote('jaws', 'T')he current system where everyone pays for protection that benefits mostly the rich is unfair. When the poor turn to the state gang for protection, they are told to take their ball home because the rich have already paid all the bribes. That's why we have so much pollution and so much crime today. Who suffers the most from crime? Poor minorities.

[jaws]

$this->bbcode_second_pass_quote('Z', 'E')conomics ( free market style ) is a religion and Jaws is its prophet.

[Z]

$this->bbcode_second_pass_quote('jaws', 'A')nd you are a gang lord defending your turf against people who just want to live peacefully. Where do you claim legitimacy from?

[jaws]

$this->bbcode_second_pass_quote('Z', 'I') fear you don't understand, Jaws, that freedom ( like in free market ) is not anarchy. You need order to exercise your freedom. Ergo you NEED a state above it that will use legitimate force eventually to enforce law. That state will definitively supersede any free market economy, no matter what.

[Z]

$this->bbcode_second_pass_quote('jaws', 'T')he state declares a law against slavery and then conscripts young men into mandatory military service (an institution which according to my french acquaintances still exists in France)..

[Z]

$this->bbcode_second_pass_quote('jaws', 'T')hat is not true. The existence of black markets shows that free market economy precedes the state, as black market economies function despite being actively supressed by the state!.

[jaws]

$this->bbcode_second_pass_quote('Z', 'W')hat prevent you for getting counterfeited money or goods in a black market deal ? The state.

[Z]

$this->bbcode_second_pass_quote('jaws', '')$this->bbcode_second_pass_quote('Z', 'W')hat prevent you for getting counterfeited money or goods in a black market deal ? The state.

[jaws]

$this->bbcode_second_pass_quote('Z', 'S')trange that we didn't see a free market extravadanza in NO in the wake of Katarina. . In the country of free market religion.

[MrBill]

Well, this post started out poorly, improved in the middle where some serious discussion took place, and then degenerated from there. Too bad. Now it just polarizes both sides and the reasonable arguments get lost in the mud slinging.

I tend to believe market based solutions are better than central government dictats, but I am not so naive to believe that a free market can be left to its own devices without a functioning government, independent judiciary and infrastructure to support it. There has been some good research done that support exactly that argument. That countries that meet those preconditions do much better than countries that do not, irrespective of geography, climate and access to natural resources that might also portend a country's relative economic success or failure.

Needless to say, corruption is an economic drain on any system even though it may arise to meet a legitimate economic need do to failures of the state to meet those needs. That is why I believe that bureaucracy and failed government policies lead ultimately to corruption. Why wait 10-months for a phone line to be installed when I can pay a small bribe and get it sooner? Why pay a traffic fine when I can just give the police officer a fiver? That type of creeping rationalization, that everyone is doing it, so I may as well, too.

One of the reasons a free market will not completely function on its own is short term gains versus long term costs. Once I control a resource, I can maximize my gains in the short term for my own benefit, while imposing costs on society which may over the long term outweigh any personal benefit that I received. Another reason is the tragedy of the commons. Where resources are shared and not owned by anyone. But these are all well tread areas that have been discussed at length in other forums.

But if no one is listening, there is no use to preach to the believers or try to convert the non-believers. But of course, we will not get any closer to solving the economic problems associated with resource depletion and peak oil if we cannot learn to discuss solutions instead of jumping down one another's throats for having different opinions.

I for one am tending towards the exit. My time is too valuable to waste.

[Z]

$this->bbcode_second_pass_quote('MrBill', 'B')ut if no one is listening, there is no use to preach to the believers or try to convert the non-believers. [...] we cannot learn to discuss solutions instead of jumping down one another's throats for having different opinions.