Social Cooperation: Why Thieves Hate Free Markets

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Many believe that market economies create a dog eat dog environment full of human conflict and struggle. To Prof. Aeon Skoble, the competition in markets does not create conflict, but rather, encourages people to cooperate with one another for mutual benefit.

For instance, suppose a thief steals a suit from Macy's. If Macy's knew who the thief was, one could argue that Macy's has an incentive to keep this information from their competitors. By withholding information about the thief, it would make it much less likely that thief would get caught while robbing Macy's competitors. However, in the real world, competitors share information about theft with one another, creating a valuable information network. Competitors share information because it is in all of their mutual interest to crack down on theft. If a business chooses to ignore the information network, they lose out on valuable information.

The example above is just one of many examples where competitors have a strong incentive to cooperate with one another. In a certain way, we're all merchants who trade with one another. We all individually depend on networks of reputation and trust to own a car, own a home, and have a job. In a world of competition and scarcity, we are not only capable of cooperating with one another, but we frequently do.

These voluntary systems of social cooperation, often called organic or spontaneous orders, are not planned from the top down by enlightened rulers. Rather, they emerge overtime as individuals interact with one another. These spontaneous orders are all around us, and include important things like language, fashion, internet memes, prices in a market, and law.

Going back to the suit thief, it may very well be the case that some individuals abstain from crime because of the threat of jail. However, it is also very likely that crime is prevented through networks of trust and reputation. The next time you hear that the problems that society faces can only be solved by applying force from the top down, you are right to be skeptical. Peaceful and voluntary mechanisms that encourage and facilitate cooperation are all around us.

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[ICantDecryptTheCode]

ron paul seems to be winning YEAH RIGHT. lol.

[cactustactics]

You're not a supporter of Austrian economics by any chance...

[cactustactics]

@theredscourge Greenspan spouted the same 'perfect self-regulating free market' ideology his whole professional life and was astounded (and at least admitted he'd been wrong) when it utterly failed to work in reality

And yes governments *can* (and often should) hold monopolies - the difference is they're democratically accountable and (in theory) operate in the public interest, unlike private entities who are *inherently* accountable to nobody but themselves and exist to extract maximum profit

[theredscourge]

@cactustactics Who cares what Greenspan says? If you try to control the economy, bad things will happen. If you don't try to control the economy, bad things will happen. There is a business cycle for a reason. It used to be because costs get too high and consumption falls, and businesses have to respondy by shedding jobs and becoming more agile. Then the recession ends and the people get re-hired. If they do not, they retrain for a new line of work. Things change, people make mistakes big deal.

[theredscourge]

@cactustactics I disagree. Please list me some monopolies. If monopolies are dangerous, why then does government exist? It is the #1 monopoly of all time!

Politicians are loathed for mostly being corrupt. Why? I'll tell you why: As long as people are free to trade, there will be a marketplace. As long as there is a central body with power over the marketplace, market players will eventually control it. Without massive culture change the easiest way to stop this unfairness is disband government

[cactustactics]

Also do you magical free market people remember this?

Mr. GREENSPAN: Flaw in the model that I perceived is a critical functioning structure that defines how the world works, so to speak.

Rep. WAXMAN: In other words, you found that your view of the world, your ideology was not right. It was not working.

Mr. GREENSPAN: How it - precisely. That's precisely the reason I was shocked, because I've been going for 40 years or more with very considerable evidence that it was working exceptionally well

[cactustactics]

@theredscourge You do understand that the governments in developed countries all use regulatory power to try and stop monopolies, right? Because allowing that much power in the hands of private entities is fundamentally dangerous? And there's plenty of monopoly all over the world, large and small? Are you *really* trying to claim that there's *nowhere* that people want or need something, and have no practical choice but to go through one particular private channel?

[UniversumExNihilo]

@cdoftx

Okay, but you are arguing about economics on a video promoting a purely capitalistic anarchy. I hope I'm not the only one who sees the utter uselessness in such an endeavor. One really needs to step back if they get into such an absurd situation.

[cdoftx]

@UniversumExNihilo I'm not trying to be a douche, just using a word. Here's the definition: Fallacy: An incorrect argumentation in logic and rhetoric resulting in a lack of validity, or more generally, a lack of soundness. The specific one I was referring to would be a hasty generalization.

[helios5868]

@theredscourgeSo you're saying the United States is NOT involved in military action? Really? Israel doesn't have a military? The Falklands war didn't happen? Chinese and Americans fighting in Korea?

The simple fact is the only reason MAD existed was because BOTH countries would die if they launched Nukes since the other country would launch before the nukes arrived. GUNS ONLY KILL THE PERSON AT THE END! Yes, there is the potential of dying, but that has been a constant part of war forever.