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November 01, 2019

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luis enqriue

yes, insincere free-marketeers: who was it that said something like the entire intellectual effort of the right consists of finding cover for selfishness?

I am guessing you have seen Philippon's new book? Here's a blog / article where he lays out the main points:

https://www.theatlantic.com/ideas/archive/2019/10/europe-not-america-home-free-market/600859/

Keith Robertson

The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.

JK Galbraith

Kevin Carson

In addition to IP rents, it's also vital to combat rents from increasing site rent from land -- land value taxation and/or strong encouragement to community land trusts.

Blissex

«In addition to IP rents, it's also vital to combat rents from increasing site rent from land»

Vital for whom? For a plurality of voters, and perhaps a majority, it has been vital to boost site rents as fast as possible: the average southern property owner gets £30-40,000 a year of work-free gains from their property, a near-doubling of their after-tax incomes, and they are very, very, very happy about that.

After all if property in the Home Counties and London keep doubling in price every 7-10 years "forever", that would be the biggest wealth creating wonder ever discovered, greater than the silver of Potosí and the oil of Arabia.

AMB

Blissex- I can only assume irony in your post.

Or are you like Grant Chapps who’s get rich quick scheme mistakenly branded “wealth creating entrepreneurialism” as rent seeking on real estate inflation.

georgesdelatour

The most fearsome monopolies today are in the tech sector. One problem is, most of them don’t actually employ very many people. Only Amazon has employee numbers comparable to a classic Fordist business like, say, BMW. The old Fordist businesses were ultimately domesticated by the trades unions. Could a revived trades unionism curtail the monopoly power of Google?

I’m in favour of antitrust legislation. Even there, I’m not sure it’s necessarily the right way to deal with the FANG monopolies. Most consumers probably like the fact that they can buy something from Amazon instantly with a single click, as soon as they think of it. They probably don’t want six rival Amazon-type providers to cross-check between before making a purchase. Plus, the US government probably won’t allow, say, Jack Ma to become a serious rival to Jeff Bezos in the US domestic market.

We could regulate them as public utilities, I guess.

Blissex

«mistakenly branded “wealth creating entrepreneurialism” as rent seeking on real estate inflation.»

That's also what W Munchau of the Financial Times wrote of crony rentierism:

“Margaret Thatcher’s successful brand of entrepreneurial capitalism in the UK in the 1980s. Through privatisation, she turned ordinary savers into shareholders. Through the sale of council houses, she turned tenants into property owners.”

What "leftoids" seem to forget is that it is a very, very, very popular claim.

The era of mass crony rentierism created by M Thatcher and T Blair (and by the good pensions and low property prices of the "butskellite" 60s-70s) poses a big political problem to the political representatives of producers, and there have been three main political reactions, all of which I find rather lacking:

* The "leftoids" have chosen to ignore it entirely, and keep singing delusionally "The red flag" and "El pueblo unido jamas sera vencido".

* The mandelsonian/blairite whigs have decided to embrace it while telling producers "you got nowhere else to go".

* The Conservatives and LibDems have decided to double down enthusiastically on crony finance and property rentierism, to the point of largely ignoring the producer side of business (except for pushing down wages whenever possible).

Dipper

what is the maximum amount of wealth that is reasonable for an individual in the UK to have?

ricardo2000

Modern economics is a failure as it doesn't describe, or allow for, billionaire concentrations of wealth. Billionaires are a cause of current social stress and poverty because they suck up vast amounts of money that would be put to productive investments elsewhere. Two, the money removed from the economy should be circling through people's pockets and bank accounts 5 to 10 times multiplying money's affects. Now it goes through 2 or 3 times at most before falling into a monetary black hole. Thus the failure of 'pump-priming' and 'quantitative easing' and 'TARP' programs, not to mention the long-term stagnation of Japan's economy under the rule of their corporate conglomerates.
The result is the immediate destitution of the middle and lower classes of every society.

nicholas ford

I think Chris is mostly correct about this. I suggest a big part of the problem that we all have is one of language.
The right typically refers to the benefits of FREE markets, when more accurately they should refer to the benefits of COMPETITIVE markets.
When the right refer to a market being FREE they generally have in mind that the market is free from government interference, as in no price regulation, and no legal barriers to entry. But in a FREE market, firms may also be FREE to exploit monopoly power, as Chris identifies. They also may be FREE to exploit other market imperfections, such as 'assymetry of information' (ie ripping off the ill informed) which is why the financial services industry is so large.
I think Chris is totally right- the authorities should seek to make markets more competitive wherever possible, and regulate where competition cannot protect the consumer.
The right should refer to the benefits of COMPETETIVE markets, and stop talking about FREE markets.
Just a pity that most of Corbynite left do not grasp one iota of this- wooosh! - and continue to propose creating nationalised state monopolies are the answer despite this being a wholly proven failure.

Danny

This is right, but it misses the point that there aren't very many Western billionaires, and the few that exist are easily accounted for. It's hardly a sign of market failure that tech innovators are richly - even absurdly - rewarded. It's interesting to glance at the various rich lists and see how few inherit their wealth rather than generate it themselves. It's an indication that the free market is working relatively well

kramer

Danny, there isn't enough wealth in existence for there to be very many billionaires, and if there was, we would all be talking about the quadrillionaires. You seem to attach some ethical property to wealth not inherited that automatically makes it "ok", but it's the rules in place that determine how the spoils of war get divided.

Danny

Kramer - UK gdp is £2.1 trillion, there is no shortage of wealth which (leaving aside dynamic effects) could be concentrated.

The relevance of inherited wealth is that it shows dissipation of assets over time. That's morally important. It shows that the optimal policy for someone who a) is concerned about extreme inequality but b) recognises property rights and freedom to trade - is just patience.

Jackart

I think you're saying "the right" when you mean "Tories". The Tories have indeed thrown their belief in Free Markets to the populist wind, but those of us on the right who still believe in Free markets are mostly no longer Tories. We are, and always have been liberals. The "support for wealth" is just a liberal respect for property rights. In this respect the occasional Billionaire is just a lottery win for a few people. The idea you could create perfect competition, or such a situation would be desirable is, like all fundamentalisms, erronious. There is a lot of luck in the distribution of wealth, true. That doesn't mean a tax system or bureaucracy could do better.

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