It is common to hear people on the internet complain about the power of the state. It is regularly denounced for forcing people to obey its laws and pay taxes. Libertarians criticise this use of coercion and regularly compare it to a gang of thieves or the mafia. Many advocate that we either abolish or minimise the size of the state and replace it with a world where everything is based on voluntary co-operation and you are free to do what you want so long as it does not harm anyone (known as the Non-Aggression Principle). It seems like a simple choice between peaceful liberty or violent oppression. It is a handy debating trick as it allows libertarians to paint themselves as defenders of freedom while opponents look like tyrants. As nice as it sounds, it suffers from the fatal flaw that the market is just as reliant on the coercion as the state is. Continue reading “Both The State And The Market Are Based On Coercion”
Even though we all live in a capitalist economy, few people seem to understand what this means. The word is thrown around in economic and political debates without much consistency. The situation is even worse for socialism which seems to be a label thrown onto random policies without any understanding. So to help clear up the confusion, I thought I would give a clear and simple explanation to what these words mean. Continue reading “What Is Capitalism And Socialism?”
Milton Friedman is one of the most famous economists that ever lived, yet reading his most famous book, Capitalism And Freedom; it is hard to see why. The book is surprisingly basic and doesn’t offer much of an argument. Friedman merely states things (such as the minimum wage causes unemployment) without offering any supporting evidence. It is as though simply saying it was enough to make it true. There are hardly any references or citations in the book, which makes it very difficult to know if any of what he says is actually true. There is no reference to history or current affairs or if any of his ideas have worked before or if his criticisms reflect reality. Continue reading “Capitalism And Freedom”
Last month a friend asked my opinion and I thought I might be able to apply my economic knowledge to a real life scenario (this almost never happens so I got quite excited). It had to do with the process of reselling tickets, and we debated whether or not this was greedy exploitation or simple capitalism. Is it right to be governed by money and the market or should social norms and ethics dominate? Continue reading “Applying Economics To Ticket Scalping”
Whenever I tell people that I’m studying economics they usually ask me how to solve the recession or what to do about the banks. Each time I’m embarrassed over the fact that we have never even mentioned these issues in lectures. In my course I have basically been taught that the free market is the most efficient and best system in the world and trouble always results when it is interfered with. In my textbooks recessions are not mentioned, they do not happen. There is no explanation of unemployment, the biggest issue of our times. There is no mention of profit, the heart of capitalism. Nor do they talk about banks or money or advertising or how systems are guided by power relations. No mention is made of poverty, in effect ignoring three-quarters of the world.
Continue reading “What Economics Doesn’t Talk About”
There is a problem with the free market and consumerism. You see, it is based upon increasing sales as much as possible. As soon as you sell something you want that same person to buy another product from you. You could do this by competing on price or quality, or you could build the product such that it either breaks down or goes out of fashion very soon. This process, known as Planned Obsolescence, is rarely discussed but quite logical and sensible. Continue reading “Built To Break”
Most people think there is only one way of running a business, that is, with a boss in charge telling everyone what to do. The boss makes all the decisions and keeps all the profit. This is the way it always has been and the way it always will be. But then again there was a time when people thought the unrestrained rule of Kings was the natural way of running a country. What if there was an alternative? What if the workers made the decisions themselves? What if they took ownership of their place of work rather than simply having it as a means to make a living? What if the makers of the money got to keep it? What if the divide between employer and employee was removed? What if the workers ran the business? Continue reading “What If The Workers Ran The Business?”