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Distribution of Private Goods

Chang29
Posts: 732
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10/22/2016 8:09:32 AM
Posted: 1 month ago
Distribution of Private Goods

To start some definitions:

Scarcity is the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources.

Types of goods:

Some definitions to explain types of goods are rival and excludable.

A rival good is a type of good that may only be possessed or consumed by a single user. Using a rival good prevents its use by other possible users.

An good is excludable if it is possible to prevent people (consumers) who have not paid for it from having access to it. By comparison, a good or service is non-excludable if non-paying consumers cannot be prevented from accessing it.

Private goods - rival and excludable

Club goods - non rival and excludable

Common resources - rival and non excludable

Public goods - non rival and non excludable (does not mean provided by government)

To reduce scarcity problems, goods are exchanged between people. The exchange of goods can occur voluntarily or violently. Most civilized people will agree that voluntary exchanges are the best method of distributing goods, whether by markets, charity, communal living, or other ideas. Some types of goods cause challenges to voluntary exchanges but with economics people should be able to keep interactions peaceful. Yet, for many people their first reaction is to bring violent government action to influence these exchanges.

How can private goods be distributed with the least threat of violence?
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.
Chang29
Posts: 732
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10/24/2016 12:18:36 AM
Posted: 1 month ago
At 10/22/2016 8:09:32 AM, Chang29 wrote:
Distribution of Private Goods

To start some definitions:

Scarcity is the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources.

Types of goods:

Some definitions to explain types of goods are rival and excludable.

A rival good is a type of good that may only be possessed or consumed by a single user. Using a rival good prevents its use by other possible users.

An good is excludable if it is possible to prevent people (consumers) who have not paid for it from having access to it. By comparison, a good or service is non-excludable if non-paying consumers cannot be prevented from accessing it.

Private goods - rival and excludable

Club goods - non rival and excludable

Common resources - rival and non excludable

Public goods - non rival and non excludable (does not mean provided by government)

To reduce scarcity problems, goods are exchanged between people. The exchange of goods can occur voluntarily or violently. Most civilized people will agree that voluntary exchanges are the best method of distributing goods, whether by markets, charity, communal living, or other ideas. Some types of goods cause challenges to voluntary exchanges but with economics people should be able to keep interactions peaceful. Yet, for many people their first reaction is to bring violent government action to influence these exchanges.

How can private goods be distributed with the least threat of violence?

With few exceptions, most people would agree that free markets are the best method for distribution of private goods, even violent socialists will concede this point. There are very few arguments that can justify public use of force for distribution, but looking at one private goods that nearly everyone agrees that government violence should be used to affect distribution.

Currency, a private good that is rival and excludable, characteristics that a free market will best provide this good. Yet, nearly every government outlaws private currency and requires use of government notes within its borders. Free markets can provide a superior product yet governments enforce usage of its inferior product. If the government product was the best, no law would be required.

What is the weakness in fiat currency? Lack of scarcity.
Government fiat currency can be created at very little to zero costs. Central banks create as much as needed with just a few keystrokes, no printer is even needed. Also, banks that meet central bank requirements can create currency with little cost. This characteristic of fiat money converts a simple private good into a mess. With a country's medium of exchange now a non-scarce resource, the guys with guns must create artificial scarcity with the threat of violence against the non-compliant thus transforming a peaceful private good into a tool of government. A tool used to reward and punish citizens, which is a reason that many people consider every election as important.

One fallacious reason for government to provide currency are historic banking panics. The cause of these panics was people felt that banks had created more currency than the commodity present backing the currency. It turned out that the public was correct about backing and knew that government was not on their side. Banks could not provide people with the contractually committed commodity, thus fraud had been committed. If government had provided justice, the perpetrators would have been forced to pay restitution to those harmed. Instead, government rewarded fraudulent bankers with a system to remove scarcity from their product that allows currency creation in nearly limitless amounts. Government then uses its near monopoly education to spread the propaganda of the benefits of fiat currency.

Fiat currencies demonstrates how government interference changes characteristics of private goods in ways to benefit a few.
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.