Chris
01-26-2015, 03:14 PM
I prefer markets. You may prefer mercantilism.
Markets or Mercantilism
...To economists “the market” refers to the market of exchange between individuals. ...Society and markets are actually very closely related and at times synonymous. The market simply refers to the economic interaction of people.
...First of all, we need to understand the first tenant of economics; that individuals act out of their own self interest.....
...In the 19th century, Karl Marx and Friederich Engels thought it best to simply disallow the exclusive ownership of property and have all ownership of resources in common. But Austrian economist, Ludwig Von Mises pointed out, in his 1920 work, “Economic Calculation in the Socialist Commonwealth”, that socialists are forgetting that correct economic calculation begins with private ownership. Simply put, resources are best allocated when people have skin in the game....
...Before the advent of what we call capitalism today, human existence was pretty awful....
Not until the end of the 18th and beginning of the 19th centuries did the guilds start to fade away and with them, mercantilism. Many intellectuals, such as Adam Smith, criticized them for their negative impact on national wealth. Once this happened, the phenomenon we know as capitalism began to grow. Standards of living increased as merchants began to produce goods more cheaply so average citizens could afford to purchase them. For the first time in human history wealth began to spread across the social classes. The middle class emerged as the the division of labor became established. Trade became freer and more open with other nations. People actually began to enjoy life. The average citizen became educated as leisure time became more available.
All of this happened without a central planning committee. There were very few regulations, albeit tariffs were still in place. Yet the narrative is to return to the time of the guilds. Calls to restrict trade, regulate prices and wages, and restrict entry for new businesses through licensing laws are common place. Instead of free markets, we now have crony-capitalism, a modern version of mercantilism, where specific industries or businesses receive protection and tax payer subsidies from democratic governments. Profits are private but losses are social. We no longer rely on the best regulator, competition, to best satisfy the needs of consumers and to keep monopolies in check. Today we have oligopolies, where only a few sellers control the supply of a commodity or service and thus the price. Through the call for more regulations we have returned to the age of the guilds and mercantilism. Our current state of affairs can hardly be defined as free market capitalism.
...So, think about all of this the next time you may get into that discussion about regulating “the market”. What these people are unknowingly asking for is a return to feudalism, desperation and mass poverty. Am I taking this to an extreme? Take a look around and ask yourself; are we on a path to more freedom or on the road to serfdom?
Markets or Mercantilism
...To economists “the market” refers to the market of exchange between individuals. ...Society and markets are actually very closely related and at times synonymous. The market simply refers to the economic interaction of people.
...First of all, we need to understand the first tenant of economics; that individuals act out of their own self interest.....
...In the 19th century, Karl Marx and Friederich Engels thought it best to simply disallow the exclusive ownership of property and have all ownership of resources in common. But Austrian economist, Ludwig Von Mises pointed out, in his 1920 work, “Economic Calculation in the Socialist Commonwealth”, that socialists are forgetting that correct economic calculation begins with private ownership. Simply put, resources are best allocated when people have skin in the game....
...Before the advent of what we call capitalism today, human existence was pretty awful....
Not until the end of the 18th and beginning of the 19th centuries did the guilds start to fade away and with them, mercantilism. Many intellectuals, such as Adam Smith, criticized them for their negative impact on national wealth. Once this happened, the phenomenon we know as capitalism began to grow. Standards of living increased as merchants began to produce goods more cheaply so average citizens could afford to purchase them. For the first time in human history wealth began to spread across the social classes. The middle class emerged as the the division of labor became established. Trade became freer and more open with other nations. People actually began to enjoy life. The average citizen became educated as leisure time became more available.
All of this happened without a central planning committee. There were very few regulations, albeit tariffs were still in place. Yet the narrative is to return to the time of the guilds. Calls to restrict trade, regulate prices and wages, and restrict entry for new businesses through licensing laws are common place. Instead of free markets, we now have crony-capitalism, a modern version of mercantilism, where specific industries or businesses receive protection and tax payer subsidies from democratic governments. Profits are private but losses are social. We no longer rely on the best regulator, competition, to best satisfy the needs of consumers and to keep monopolies in check. Today we have oligopolies, where only a few sellers control the supply of a commodity or service and thus the price. Through the call for more regulations we have returned to the age of the guilds and mercantilism. Our current state of affairs can hardly be defined as free market capitalism.
...So, think about all of this the next time you may get into that discussion about regulating “the market”. What these people are unknowingly asking for is a return to feudalism, desperation and mass poverty. Am I taking this to an extreme? Take a look around and ask yourself; are we on a path to more freedom or on the road to serfdom?