F A Hayek - National Altruism

Hayek explains the role of altruism in an individualist society. http://www.LibertyPen.com

Category:

News & Politics

Tags:

• economics
• socialism
• capitalism
• need
• liberty
• libertarian
• freedom
• conservative
• profit
• solidarity
• instinct

[manoman0]

@atlasman55 Well, that were fine if they a) don't get bailed out and b) use their own flippin' money; they gamble because "we, the people" demand more and more return.

[atlasman55]

@Questfortruth86 The 'efficient' pricing of assets emerges from group behaviour, not from the actions of any individual. The actions of an individual are normally pretty irrelevant, if a market has enough participants. On the other hand, certain markets can be manipulated, in which case price changes are intended to benefit only those that bring them about.

[atlasman55]

@Questfortruth86 Strictly speaking, the problem is not that the central bank/government can control the interest rate on its own currency, but rather that private banks are given a licence to counterfeit that currency when they create credit. Whilst cheap credit encourages asset price rises, in many cases this happens anyway as a result of disparities between supply and demand. There are only so many houses in the centre of a city, but in times of economic growth demand will rise substantially

[atlasman55]

@Questfortruth86 Most types of currency, derivatives, commodities and shares trading are basically just forms of gambling. If a trader makes a fortune from buying and selling gold futures contracts, he has produced nothing as such, he has simply been good at predicting changes in prices, and willing to take risks.

[Questfortruth86]

@atlasman55

"The gambler has produced nothing"

What does gambling have to do with capitalist production and income distribution? You do realize that gambling exists in even in socialist/communist systems, correct?

"The prostitute's income is not determined by her ability to make others 'happy'"

The prostitute's service doesn't make people happy? It doesn't satisfy the desires of his/her clientele?

"but by her ability to do what the majority would find morally repugnant."

Immaterial.

[Questfortruth86]

@atlasman55

The phenomenon you're describing is in fact atypical, if at all possible, in an actual free market. This condition, namely extreme asset-price volatility, is the result of a government-induced inflationary expansion (a bubble) and artificial interest rate manipulation. But yes, due to the fact that subjective preferences are in continuous flux, there will indeed be arbitrage opportunities. But arbitrage isn’t superfluous.

[Questfortruth86]

[continued] It leads to the more efficient pricing of assets (under normal conditions) which facilitates economic coordination and allows for rational economic calculation. In other words, it matches expectations with actual economic fundamentals (so-called “real conditions”) so that economic agents can maximize output/utility. Thus arbitrage too (indirectly, even more so than the whore divorcee who “sits” on a fortune) serves the needs of society.

[atlasman55]

@atlasman55 By that I don't mean to say that the wealthy aren't productive, only that the equation wealth=productivity is too simplistic.

[atlasman55]

@Questfortruth86 You define all increases in wealth as being the result of an increase in productivity and/or an increase in the production of goods and services, but I don't consider this to be an accurate description of the facts. Wealth engenders wealth by its very nature, and not necessarily as the result of increased 'productivity' or of an increase in 'valuable service to others'. You use the term "self-made wealth", but a more accurate term might be "wealth-made wealth".

[atlasman55]

@Questfortruth86 Let's say someone inherits $1 million in cash. They buy a house for that sum. 15 years later it is worth $10 million, at which point they sell it. According to you they only inherited 10% of their wealth and 'made' the rest by 'producing goods and services'. However, they have produced nothing, and have in truth only profited from an increase in prices. Let's say the intial price was £100,000 and the sell price was $1M. They would register as a "self-made millionaire". Nonsense.