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HappySqurriel on 10 November 2009
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famousringo said:
tarheel91 said:
Rath said:

@tarheel. There are so many confounding factors in that.

 

Edit: To clarify, I'm saying that there is a correlation but that does not imply causation.

Is it really that hard to imagine?  Take what you learned from Econ 101 and apply it to this.  When is a market the most efficient?  When it's entirely free (taxes result in an unavoidable loss) and can operate at natural market equilibrium.  Logically, the more money there is to go around, the more money there will be for everyone.  Any argument based upon the benefits of the redistribution of wealth ignores the inherent issues in any even semi-socialized economy.  Corruption becomes easier; governments are poorer (read: less efficient) managers of a market than the "invisible hand," and people themselves become less efficient when their income is less dependent on their performance (just look at the large amount of people satisfied to sit around, eeking out a living on unemployment checks in the US).


If you want, also consider that the overall trend in the graph holds true for any individual geographic region as well.  With geographic region held constant, many of those confounding variables are held constant (and, thus, become irrelevant), and a relationship becomes much more easy to believe.

 

Edit: I'm not arguing for pure free market, just for something tilted more in that direction.  Mostly free market with minor regulation.

There are so many non-sequiturs in this post, I wouldn't know where to begin.

I guess for starters, I find it funny that you place so much faith in the "invisible hand" when your last post asserted that most people are idiots. There is no "invisible hand," just people making decisions. When it comes to spending money, they're all rational actors with perfect information, but when it comes to deciding what kind of economic system they want, they're confused little sheep who haven't got a clue.

Suppose political parties and policies are just another market, where people make decisions on how to spend their votes based on what represents the most utility they can get for their vote.

Suppose for a moment that these idiots understand that tighter regulation might mean less wealth to go around, but they feel that the stability gained from more regulation is more valuable than the extra wealth. Consider it an insurance policy against economic collapse, and one that most people feel is a worthy investment for the peace of mind that it brings, even if, like fire insurance, it's a policy that may never have to be cashed in.

The concept of the invisible hand has nothing to do with individuals being smart or making good decisions, just about making decisions which are preferable for them. The concept is used as a contrast to how inefficiently managed economies are run. Essentially, you can walk into a cereal section of your local supermarket and see a vast array of cereals which are manufactured to suit certain individuals tastes, and the flow of supply and the invisible hand ensures that each of these cereals are manufactured in the quantities that people desire. In contrast, if a communist government decides that the most efficient way to handle distribution of breakfast foods is to create a gigantic warehouse 5 miles out of a city which only holds Lennin-O’s that’s what happens; and if the government produces too few Lennin-O’s or too many Lennin-O’s it doesn’t really matter that much, and the government has little or no incentive to make anything that people actually want to eat.

Being a rational actor who is smart enough to decide whether you want a chocolate cereal with or one with marshmallows does not necessarily mean that you’re smart enough to decide the kind of economic system you want. Consider how individuals worship communist dictators without ever considering that communist dictators murder their own citizens, and communist countries have a nasty habit of mismanaging resources and producing massive famines; on this board there is an individual who loves Chairman Mao even though he murdered 70 Million of his own people, and the great Chinese Famine at the end of the 1950’s killed (roughly) 15 Million people. Do you really want someone with such poor thinking skills that they can’t understand "Chairman Mao = Bad" to decide the economic system you live in?