The Instigator
Erik_Erikson
Pro (for)
Losing
0 Points
The Contender
LaissezFaire
Con (against)
Winning
8 Points

Libertarian Market Policy Would Not Allocate Resources Effectively

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Post Voting Period
The voting period for this debate has ended.
after 2 votes the winner is...
LaissezFaire
Voting Style: Open Point System: 7 Point
Started: 8/7/2012 Category: Economics
Updated: 4 years ago Status: Post Voting Period
Viewed: 1,472 times Debate No: 25055
Debate Rounds (5)
Comments (7)
Votes (2)

 

Erik_Erikson

Pro

The resolution is: "Libertarian Market Policy Would Not Allocate Resources Effectively".

Assumptions:

(1). "[Libertarianism is a] political philosophy advocating only minimal state intervention in the lives of citizens. Its adherents believe that private morality is not the state’s affair, and that therefore activities such as drug use and prostitution that arguably harm no one but the participants should not be illegal."
--http://oxforddictionaries.com...

(2). "Libertarians advocate a high degree of both personal and economic liberty."
--http://www.lp.org...

Rules:

1. The first round is for acceptance.
2. No semantics or lawyering. Trolling and insults are O.K.
3. Debate resolution, definitions, rules, and structure can not be negotiated or changed in the middle of the debate.
4. This debate is designed to further discussion on ideological economics and should be debated in that same spirit.
5. Audience members are invited to "Boo" in the comment section. (such is the tradition of the finer arts: <http://blogs.telegraph.co.uk...;)

Debate Structure:

Round 1: Acceptance. (No new arguments)
Round 2: Presenting opening arguments (no rebuttals).
Round 3: Refutation of opponent's arguments. (no new arguments).
Round 4: Unrelated trolling/insulting period. (No rebuttals or new arguments). "'Who had better conduct?'" point should be awarded to the side that:

"provides unrelated arguments and content to the debate that, in broad-stokes, pokes fun at the opponent's theories, ideology and sources."

Round 5: Defending your original arguments.

Thank you and may Oannes save us with his spacecraft.
LaissezFaire

Con

I accept.
Debate Round No. 1
Erik_Erikson

Pro









"Both sides in the arms race are ...confronted by the dilemma of steadily increasing military power and steadily decreasing national security. It is our considered professional judgment that this dilemma has no technical solution. If the great powers continue to look for solutions in the area of science and technology only, the result will be to worsen the situation."


--J. B. Wiesner and H. F. York. National Security and the Nuclear-Test Ban, Sci. Amer. 211 (No. 4: 27 (1964).


This attraction, almost infatuation, to alternative mainstream ideology during times of economic duress--is completely normal. When our modern social structures fail to provide us with the amenities we have become accustomed to; We tend to move towards new social explanations that can explain these failures. It is a completely healthy way to re-examine a foregone options or underlying assumptions. Currently, Americans are reassessing a new economic module: Libertarianism.


This debate is about that system of human interaction. When dealing with scarce resources, a purely laissez-fair approach would be completely unable to address the underlying mechanics in our globalized marketplace. It would ultimately, ironically, lead to a loss in individual economic liberties.

Libertarianism is a social philosophy that emphasizes liberty, voluntary association and economic freedom. They advocate for these core values by emphasizing that the role and size of government should be non-existent. In my opinion, they can broadly be defined as very liberal in social issues, but very conservative in fiscal policy.(1)(2) Garrett Hardin shows the flaw, whether he intended to or not, in mixing hardliner liberty values with limited market intervention in his work "The Tragedy of the Commons".(3) He borrowed his title from an older pamphlet (1833) published by a little-known mathematician named W. F. Lloyd.(4) This Mathematician documented how several consumers, or otherwise independent actors, will act in their own self-interest and accidentally deplete their shared resources. He explained that this depletion happens when the players fail to coordinate their conservation methods.

To elaborate, the hypothetical scenario that Hardin provides in "The Tragedy of the Commons" is that of land tenure in pre-modern Europe. The shepherds, who maintain and breed the cattle, try to follow their individual self-interest by increasing their profitability. They increase their personal income, predictably in the eyes of capitalism, by increasing the size of their respective herds. Little-did-they-know that, until it is too late, the individual herd size grew too massive for the land to maintain. The end result is that all the shepherds 'lose' this game theory scenario by overexploiting the land, thus destroying the local field and the renewable-ecology necessary in the production of cattle.

Hardin wrote,

"Adding together the component partial utilities, the rational herdsman concludes that the only sensible course for him to pursue is to add another animal to his herd. And another; and another... But this is the conclusion reached by each and every rational herdsman sharing a commons. Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit--in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all. "(5)

My opponent might respond with a claim that private firms that can come together to form self-regulating entities. The logististics of which are dubious. Without a strong mandate from an external entity, there is little to no accountability. Many modern corporations are contractually obliged to their shareholders to maximize profits at every available opportunity; Often times at they pass this on as an expense of the taxpayers. To have those same corporations form into self-regulating commissions would be, at best, a facade. There are far too many opportunities for corruption to externalize some of the underlying costs of those goods to the public. Thus, not a true representation of an efficient marketplace, no-matter the price of goods or the increases in consumer purchasing power.

I would argue against these self-regulating entities because they would have little effect on a marketplace which economists describe as a natural monopoly. "A market has a natural monopoly if one firm can produce the total output of the market at lower cost than several firms could."(6) The marketplace logistics favors a strong, central player both in logistics and resource allocation. It is hypocritical to have the regulator also be the one who provides service. The most often cited example of this is public utilities: The utilities companies biggest cost is in laying down the groundwork which connect the homes with their energy sources. It makes little sense to have multiple lines of pipes in the ground when one set is all that is necessary. Without a mandate, members of communities that are deemed 'unprofitable', because of the maintenance costs, could expect to live a lifestyle without those respective utilities. In this way, sometimes the best way to allocate your resources is to have a strong monopolistic presence, but with a government presence to enforce consumer rights in that marketplace. This application of government enforcement, however, would be a flat-out rejection of Libertarian values.

To the best of my knowledge, there is no refutations to the criticisms I have supposed. Do not let the concept of ‘Red Tape’ turn you, the reader, off to the idea of government regulation. As corrupt as government officals are often protrayed, remember that those who fund such resentment would have a great deal to gain from the dergulation of your rights.

We live in a global society that depends on fossil fuels to function and we need to guard our marketplace efficiency as close as possible. In the examples I have listed, Libertarian market policies fail to address our dynamic economy and would only make a bad problem, worse.


Let me now refer back to the quotation I presented at the start of this argument. Wiesner and York feared that the growing strengths of the military-industrial complex was far outpacing the civilized world’s capacity to contain the horrors of thermonuclear war. In that same regard: We need to contain the risky behaviors in our free-market by regulation by quality organizations like the Environmental Protection Agency and the Federal and Drug Administration and hold them accountable to any of their corporate connections. Independant federal regulators make our capitalist society possible.

(1) -- http://www.fee.org...
(2) -- http://libertarianism.com...
(3) -- http://www.sciencemag.org...
(4) -- W. F. Lloyd, Two Lectures on the Checks to Population (Oxford Univ. Press, Oxford, England, 1833), reprinted (in part) in Population, Evolution, and Birth Control, G. Hardin, Ed. (Freeman, San Francisco, 1964), p. 37.
(5) --http://www.sciencemag.org...
(6) -- Peroff, Jeffrey M., Microeconomics. 6th Edition. p.372-373
LaissezFaire

Con

Following the debate structure outline in Round 1, I won’t respond to Pro’s arguments against free markets, but will focus on a defense of free markets in general, and in particular the cricisms Pro makes of them in the argument we had in the forums.

How the market allocates resources:
In a market economy, the price system organizes production and exchange—it puts everything in its right place. Prices signal to businesses whether or not something should be produced—if the price goes up, and production of something becomes more profitable, the price signals that businesses should invest more there. Prices going down signal the opposite. High prices signal to consumers that something is scarce, and they should buy less—low prices signal the opposite. Same thing with wages—the price of labor. Low and high wages tell people which professions to leave and enter. The price of time—interest—tells businesses how much to borrow and savers how much to save.

Prices also help move resources across space and time. What happens if apples cost more in Canada than in the U.S.? This signals to the market that there’s a higher demand for apples in Canada than here. So there’s a profit opportunity for anyone who can buy them here and move them to Canada—moving the supply where it’s more needed. Speculators serve a similar function—but across time, rather than space. If speculators expect the price of oil to be higher in the future—because there’s more demand or less supply, or whatever—then they’ll buy oil now and sell it in the future. Thus, they reduce the supply of oil now and increase it in the future, when it’s needed more.

Prices are the only way a business can have any idea what to do. What’s a more efficient production process—50 hours of labor, 1 ton of coal and 1 ton of steel, or 20 hours of labor, 2 tons of coal, and 2 tons of steel? It’s impossible to say with just that information. But prices let us compare apples and oranges—we can see which is more costly by looking at the prices of each product.

The only way to have real prices is laissez-faire. The subjective desires of consumers create the different demands for different products. The demand for those products creates demand for the different factors of production—raw materials, labor, etc. Competition among entrepreneurs to find the cheapest way to produce the stuff consumers want (50 hours of labor, 1 ton of coal and 1 ton of steel, or 20 hours of labor, 2 tons of coal, and 2 tons of steel?) determines the prices of those factors of production.

Resources are getting more abundant:
How can resources get more abundant? We have a fixed amount, and then use them up—surely that would mean resources should get more scarce over time, not more abundant. This may be true in a trivial sense—but not in an economic sense. The exact physical quantity of copper atoms on Earth is certainly finite—but that isn’t what’s relevant for human welfare. What matters is the available quantity of the resources we use. If we can find new resources faster than we use up resources, then our supply of those resources is effectively infinite. For example, look at the long-term trend in oil prices. We keep using more and more oil, and our demand for oil keeps increasing. But this doesn’t mean prices have gone up—they have in the short term, temporarily, but the long term trend is mostly stable prices. [1] How can this happen, if demand keeps increasing and the world’s supply keeps getting used up? It’s because we keep finding new sources of oil faster than we can use the old ones up. Same with copper, [2] and nearly all other natural resources. [3]

The profit and loss system of the market ensures this. If, say, energy were to start to become more scarce, the price would rise, and selling energy would be more profitable. This gives people an incentive to find more of the fuels we currently use, or new sources of energy. For example, if the price of oil rose, we might start using more solar energy, if the price of oil rose enough to make it more expensive than solar power. Or someone could invent something completely different that we can’t even conceive of now. The limiting factor of growth is not the physical amount of natural resources, but our supply of the ultimate resource—the human minds to think up new ways to use the resources we have.

The rich get richer, and the poor get . . . richer:
Life expectancy in developing countries increased from 30 to 65 during the 20th century. [4] Infant mortality declined from 18% to 6% during the 2nd half of the 20th century. [4] Hunger in developing countries declined from 37% to 12% since 1970. [5] Even the cleanliness of the environment has improved over the long term. [6] But these trends are not the same everywhere—they’ve happened to the extent that countries were economically free, to the extent that markets were allowed to work. [7] Sub-Saharan Africa stagnates while the Asian Tigers get rich.

[1] http://datamarket.com...
[2] http://datamarket.com...
[3] Baumol, William, “On the Possibility of Continuing Expansion of Finite Resources”, Kyklos, Vol. 39, Fasc. 2, 1986, pp. 167- 179.
[4] UNDP, Human Development Report 1997 (New York: Oxford University Press for the United Nations Development Program, 1997).
[5] Food and Agriculture Organization of the United Nations, “The State of Food and Agriculture,” Document C99/2 to FAO conference, 30th Session, Rome, Nov. 12-13, 1998.
[6] Baumol, William J., and Wallace E. Oates, “Long-Run Trends in Environmental Quality,” in The Resourceful Earth, Julian L. Simon and Herman Kahn, eds., 1984, pp. 439-475.
[7] http://www.freetheworld.com...

Debate Round No. 2
Erik_Erikson

Pro

Erik_Erikson forfeited this round.
LaissezFaire

Con

Disappointing. If Pro comes back online, I suppose we can just skip the planned trolling/insults round and have room to finish the debate.
Debate Round No. 3
Erik_Erikson

Pro

Erik_Erikson forfeited this round.
Debate Round No. 4
Erik_Erikson

Pro

Erik_Erikson forfeited this round.
LaissezFaire

Con

Vote Con.
Debate Round No. 5
7 comments have been posted on this debate. Showing 1 through 7 records.
Posted by Wallstreetatheist 4 years ago
Wallstreetatheist
Erik, what economic and political ideology do you subscribe to?
Posted by Wallstreetatheist 4 years ago
Wallstreetatheist
That was a rant. Try composing a debate case next time with argument tags and some semblance of rhetorical structure.
Posted by Erik_Erikson 4 years ago
Erik_Erikson
Nothing gets by you :D
Posted by LaissezFaire 4 years ago
LaissezFaire
You're* So annoying, my ESL friends do it every day.
Posted by Erik_Erikson 4 years ago
Erik_Erikson
I hate it when people don't use three (3) periods to signify an awkward pause. My ESL friends do it. every. day.

Plus, your no Walt Whitman.
Posted by Wallstreetatheist 4 years ago
Wallstreetatheist
Erik.. You can do direct challenges, you know.. What shall we debate on now? Anyway, good luck LaissezFaire in empirically eviscerating this babbling oaf!
Posted by Erik_Erikson 4 years ago
Erik_Erikson
Good good! I'll begin crafting my opening statements now, Laissezfaire.
2 votes have been placed for this debate. Showing 1 through 2 records.
Vote Placed by Wallstreetatheist 4 years ago
Wallstreetatheist
Erik_EriksonLaissezFaireTied
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Total points awarded:04 
Reasons for voting decision: Better arguments, formatting, and cogency. Also, Pro forfeited like a homosexually-gay queerfag.
Vote Placed by Contra 4 years ago
Contra
Erik_EriksonLaissezFaireTied
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Total points awarded:04 
Reasons for voting decision: Con presented a great case of how Laissez Faire Capitalism allocates resources efficiently via the profit motive, individual liberty, and economic freedom. Con also presented a compelling case of how self interest leads to the greater good, and presented a good but brief case on how Capitalism leads "a rising tide that lifts all boats". Con had better arguments basically, and Pro forfeited multiple rounds.