Michael Moore finally gets it right "We dont really have a Free Market"

[FriendorFoe]

http://www.youtube.com/watch?v=gwQ41Yo60og&feature=player_embedded

[Havet]

gwQ41Yo60og

Good now, we can all go to sleep because the problems of the world are solved.

Seriously, we all knew we dont have a free market (http://www.revleft.com/vb/naomi-klein-shock-t117114/index.html?t=117114).

The problem is that "true capitalism", laissez-faire capitalism, will never happen because of the existence of a State, which makes it more profitable for collusion and corporatism to appear, which in some cases makes it easier for fascism to appear.

And even without a State, we wouldn't have a "free market" as conservatives/right-libertarians/ancaps say we would. (http://www.revleft.com/vb/would-anarcho-socialist-t116765/index.html?t=116765)

[#FF0000]

I don't know where people got the idea that capitalism meant having a 100% laissez-faire market. Or even a very very free market. Social democracies are still capitalist.

[Bud Struggle]

Well I a living breathing real life Capitalist and I never thought for a second that we have an actual free market. There are aspects of the market that are free and there are sections of the market that are free--but the market overall has numerous constraints.

[scarletghoul]

Wow, he's actually preaching workplace democracy and stuff. That's pretty cool.

[Bud Struggle]

Wow, he's actually preaching workplace democracy and stuff. That's pretty cool.

He also makes a good point about college education--I was able to put myself through a pretty good college 25 years ago with a job and some help from my working class parents--looking at it honestly, I couldn't do that today without amassing a pile of debt.

You guys are being screwed over by the system when it comes to that.

[Kassad]

So... we have a slightly unregulated market with millions of people starving, homeless and uneducated. Frankly, I don't much care to see what a completely unregulated market would do to the poor and working class.

[Bud Struggle]

So... we have a slightly unregulated market with millions of people starving, homeless and uneducated. Frankly, I don't much care to see what a completely unregulated market would do to the poor and working class.

The Potato Famine in Ireland in the 19th century would be a good example.

[Kassad]

The Potato Famine in Ireland in the 19th century would be a good example.

Because history never changes, right? Especially in the days where, you know, we didn't have cars, airplanes or internet access. I'm sure that in the 1500's at one point, a regulated economy failed as well. Is that an end-all-be-all source on global economic trends?

[Dooga Aetrus Blackrazor]

I am not a big Michael Moore fan, but that segment actually impressed me. I might just see that movie.

[Crux]

The questioner seems like an lolbertarian.
The "Capitalism" t-shirt is quite a giveaway really.

[Kwisatz Haderach]

Saying you love the free market but hate corporatism is like saying you love babies but hate adults.

[Demogorgon]

I don't know where people got the idea that capitalism meant having a 100% laissez-faire market. Or even a very very free market. Social democracies are still capitalist.
Well exactly, it is a very convenient linguistic trick being played by certain cynical parties on the right.
Saying you love the free market but hate corporatism is like saying you love babies but hate adults.
True, but chances are that's not what Moore actually believes. He is the master of saying things that are palatable to mainstream America while sneaking in more radical views. Don't underestimate the value of that particular skill.

[GPDP]

If you really wanna get technical, then yes, we don't have a "truly" free market, considering the generous amount of government welfare for corporations and others in the capitalist class. As is said (rather inaccurately by our standards, but spot-on as far as mainstream discourse is concerned), what we have is "socialism for the rich" and "free markets/capitalism for the poor."

Of course, even a "true" free market, free of government interference on behalf of the capitalists would still be rather shit imo, and I doubt it would stay that way and not return to the present form of corporatism in some manner, because I believe that is the nature of capitalism. And I'm not too sure mutualism, as anti-capitalist as it may be, would be safe from such a fate either.

[RGacky3]

The fact is the corporate welfare system grew out (naturally) from a more free market system, its inevitable that in a free market system when companies gain more power they will make the government assure them even more.

Even if you get rid of Corporate welfare (somehow, ultimately its impossible), the guys that were in control still are.

[FriendorFoe]

So... we have a slightly unregulated market with millions of people starving,

Really, where they at?
I work for Social Services and them people eatin better then me.

[FriendorFoe]

Frankly, I don't much care to see what a completely unregulated market would do to the poor and working class.

Think Hong Kong without a govt that beats you over the head.

[Die Rote Fahne]

If laissez faire capitalism ever did occur, I would grab my rifle and I'd fight a solo revolution for socialism if i had to.

[Havet]

So... we have a slightly unregulated market with millions of people starving, homeless and uneducated. Frankly, I don't much care to see what a completely unregulated market would do to the poor and working class.

Sorry, bad logic.

[Demogorgon]

Think Hong Kong without a govt that beats you over the head.
Well minus the high Land Tax and extensive social welfare you mean? That might just change it a bit. Of course you would still be left with the problem that a few companies dominate Hong Kong to the extent that in many industries there is little to no competition. Is that what free market advocates advocate? Lack of competition?

[FriendorFoe]

Well minus the high Land Tax and extensive social welfare you mean? That might just change it a bit. Of course you would still be left with the problem that a few companies dominate Hong Kong to the extent that in many industries there is little to no competition. Is that what free market advocates advocate? Lack of competition?

But Hong Kong is easily the best place in the world to start a business, very easy, quick, low taxes and very little regulation. Not saying its perfect their either because its not a democracy, and they have large social welfare apparatus'
But I much rather social welfare than corporate welfare.
On top of that their Unemployment rate is 4%, during a fukking recession.

[RadioRaheem84]

Why would capitalists wish for a less regulated market when the one slightly restrained is such a beast?

Frankly, I don't care how perfect and wonderful life would be as libertarians suggest in their half baked theories of an unrestrained market. I don't buy it. We already unrestrained it enough and ended up with another world shaking crash! Enough with actually listening to their theories that should be shelved next to Astrology and Alchemy.

[Skooma Addict]

Why would capitalists wish for a less regulated market when the one slightly restrained is such a beast?

We have a very regulated market. Also, "capitalists" are not a single group of people with a single common interest. The subsidies and regulations imposed by the government help some capitalists at the expense of other capitalists.


Frankly, I don't care how perfect and wonderful life would be as libertarians suggest in their half baked theories of an unrestrained market. I don't buy it. We already unrestrained it enough and ended up with another world shaking crash! Enough with actually listening to their theories that should be shelved next to Astrology and Alchemy.

But the crash was not due to government intervention in the economy.

[Havet]

We already unrestrained it enough and ended up with another world shaking crash!

Sorry, bad logic.

[spice756]

Well minus the high Land Tax and extensive social welfare you mean? That might just change it a bit. Of course you would still be left with the problem that a few companies dominate Hong Kong to the extent that in many industries there is little to no competition. Is that what free market advocates advocate? Lack of competition?


He is talking about the past where everyone was a shop owner and everyone had a small business.Sorry but those small business and small shop owner got taken over by big big big companies and big box stores and power centers.

He is crying for day you want boots you go to ROB boot store or Mikes boot store or you want pants you go to pants store or you want gloves you go to store that has gloves .You want a movies you go to xy movies store or xyy movies store .Sorry that was the day we had small shop owners

http://www.tonysbikes.com/html/images/STORE/STORE-Front-0806-%20030.jpg

The Big-box store and supercenter, superstore, or megastore took them over like Wal-Mart , Target , Rona , Staples Inc. , Kmart , Office Depot , Costco , IKEA , Best Buy ,Toys "R" Us , Chapters ,
Home Depot , Winners , Homesense , Sport Chek , Zellers , Home Outfitters , The Bay , Canadian Tire , Mark's Work Wearhouse , shoppers Drug Mart , Future Shop , OfficeMax so on. All big stores than the small stores like shop owner.


Here is question name 5 video stores ( like HMV ) in your city , 5 electronic stores , 5 TV or computer stores so on. Name 5 cable or satellite companies.

Go to city down town the old section and you see lots of store fronts of shop owner than go out of the down town the new section and you will see these Big-box store and supercenter, superstore, or megastore and lack of the store-fronts aka shop owners.

[RGacky3]

Sorry, bad logic.

Writing that does'nt mean anything unless you can explain HOW its bad logic.

[Havet]

Writing that does'nt mean anything unless you can explain HOW its bad logic.

Except I already wrote about that particular argument endless times.:)


FACTS
-2000+: housing prices rose enormously
-Second quarter 2006: steep decline in prices
-Third quarter 2006: mortgage defaults shoot up
-mid 2007: financial system, which had heavily invested in securitized mortgages, began to collapse.
-Foreign economic systems, which had also bought many of these products began to experience unprecedented losses
-government bailouts, nationalizations, etc

can't post links yet, so look up graphs on the price evolution since 1980s to current days to see how it progressed

Mortgage Failures: Occurred in a strong economy and before housing prices have fallen signifficantly

foreclosures occured at same time and at the same pace in both prime and subprime markets.

Anyway, to what really matters:

Market Failure?

4 central causes of financial crisis (which have nothing to do with free market):
-Fiat money
-Low interest rates
-forced loans to high risk borrowers
-government loan guarantees

Fiat money: in 1971 us dollar was taken off the gold standard, which means the dollars isn't backed up by nothing except government saying so. you cannot redeem it by gold or silver like it was once, and is essentially a piece of paper.

Low interest rates:
high housing prices+ artificially low interest rates (by the Fed) = rampant speculation (25% of house purchases were for "flipping")

Forced loans: if you're a banker you are conservative to whom you lend money, because if that person doesn't pay back, your business WILL collapse. So why have these high risk lendings occured?

In 1934, after the great depression, government created the Federal Housing Administration, which guaranteed mortgages and thus eliminated the bank's risk for high risk lendings.

in 1938 Fannie Mae was created to purchase these mortgages

then in the 70s, you have the Community reinvestment act, which "is a United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining." This means they had to do business without taking into consideration of the geography, whether it was downtown, suburbs, etc

then you have the Home Mortgage Disclosure Act of 1975, where they had to reveal private information to whom they were lending this, and then the government would score that information on CRA compliance.

and in 1991 you have government requiring banks to submit racial statistics and then accusing banks of prejudice in case (and im in no way trying to collectivize people here) they were discriminating against blacks whom they thought might not be able to pay back the lending.

Anyway, how did the government force the banks to go by these new regulations?
"Liability for punitive damages can be as much as $10 000 in individual actions and the lesser of $500 000 or 1% of the creditors network in class actions"

So banks are no longer allowed to use credit history, ratios of income to mortgage payments, and have to accept "credit counseling" as proof of financial ability, as well as unverified income statements. They also have to accept gifts, welfare and unemployment benefits, and other one-time for short term "incomes" as collateral.

Speculation

As prices kept low, defaults stay low, because no one defaults when he can sell the house at a profit.
But as i've already explained, as soon as prices decline, defaults rise, and interest rates begin to increase, as well as variable mortgage payments.

When demand is artificially stimulated, resource allocators get the wrong price signals, and then labor and capital are invested in those sectors of housing and building.

I think this is a more detailed way of explaining how this happened instead of just saying: GREED CAUSED THIS, because if that were the case, wouldn't we be in perpetual crisis?

Not to forget that corporations are monsters created by the State and business owners, which wouldn't exist in a truly free market.

Basically, the assumption that since markets were "unrestrained" they led to great crisis means that if we completely unrestrain them we will have more crisis cannot be proven by citing the current crisis, since it was not a result of "unrestraining" or "deregulation".

[RGacky3]

I've read some of your arguments, and what your doing is taking facts, and making up results, theres no connection many times and many times its actually your cause is just a tiny tiny part of the whole picture.

Also heres the thing to, these regulations were a RESULT of the free market, when companies get more power they are going to flex that power and part of flexing that power is to get the government on their side. THe fact is the free market is impossible, because we have a class system, and you cannot undo a class system without revolution, also the "free market" is based on capitalist property, which is impossible without the government.

[Robert]

THe fact is the free market is impossible, because we have a class system

What makes you so confident that classes of some nature will not emerge from what you call a "free market"?

[Havet]

I've read some of your arguments, and what your doing is taking facts, and making up results, theres no connection many times and many times its actually your cause is just a tiny tiny part of the whole picture.

Also heres the thing to, these regulations were a RESULT of the free market, when companies get more power they are going to flex that power and part of flexing that power is to get the government on their side.

With all respect, you are conflating several things.

The regulations and legislations i'm talking about are a result of State action, through the government, which pass certain laws restricting trade, or granting a special privilege/status.

Obviously, the existance of such restrictions will make it more profitable for business/companies/corporations to directly bribe the State rather than play by the rules.

Solution? Get rid of the State and the privileges, and prevent new ones from coming. How? Revolution (which can be prepared through counter-economics, check my other thread).


THe fact is the free market is impossible, because we have a class system, and you cannot undo a class system without revolution

A free market is not impossible. What IS impossible is to:
- achieve a free market through reformism
- achieve it without the abolition of the State and its privileges


also the "free market" is based on capitalist property, which is impossible without the government.

Wrong. The current market is based on capitalist property, which indeed is impossible without a State.

A free market does not necessarily require private property. From Mutualist.org:




We are not opposed to money or exchange. We believe in private property, so long as it is based on personal occupancy and use. We favor a society in which all relationships and transactions are non-coercive, and based on voluntary cooperation, free exchange, or mutual aid. The "market," in the sense of exchanges of labor between producers, is a profoundly humanizing and liberating concept. What we oppose is the conventional understanding of markets, as the idea has been coopted and corrupted by state capitalism.



Our ultimate vision is of a society in which the economy is organized around free market exchange between producers, and production is carried out mainly by self-employed artisans and farmers, small producers' cooperatives, worker-controlled large enterprises, and consumers' cooperatives. To the extent that wage labor still exists (which is likely, if we do not coercively suppress it), the removal of statist privileges will result in the worker's natural wage, as Benjamin Tucker put it, being his full product.

In short, one does not need to "own" land in order to plant a crop and harvest its yield, the yield being the product of one's labor, which communists favor as belonging to the worker.