The Myth of Unplanned Economic Development

[sophia-sadek.livejournal.com]

One of the heroes of libertarian ideology is the railroad robber baron entrepreneur James J. Hill. He is contrasted with the other robber barons entrepreneurs who built the intercontinental railroad. The big difference is that Hill did not leverage public financing to construct his empire organization.

Hill derived his wealth from his serfs yeoman farmers who settled on his land to raise abundant harvests for transport to distant markets on Hills road. The settlers were forced encouraged to sell their produce to grain elevator shysters entrepreneurs at rock bottom market prices. These pilfering enterprising middlemen held on to the grain until a more favorable price was offered on the grain market and they obtained rate rebates by shipping in bulk. (They also bilked optimized grain prices from farmers by underrating the quality of the grain.)

When we look at the surface of Hill's story, it appears that no public planning went into this development. The libertarian historian has conveniently avoided looking at the planning that took place years before Hill obtained his fiefdom property. Racist Forward-looking politicians deliberately expropriated acquired the land from its native inhabitants for the purpose of economic development. Hill and his settlers maintained their holdings under the protective hand of federal and state thugs military personnel, lest it fall back into the hands of the original proprietors uncivilized people.

Although the Solyndra investment appears to be a piece of failed public planning, it has more of the earmarks of traditional robber baron private development. Back in the day, a thieving an enterprising operator would run his business into the ground and sell off the depleted stocks to a shifty trusted new partner, leaving the original investors with little or no return on their capital.

Were it not for public planning, this Internet space would not be available for us to use. In fact, I would not have the capacity to communicate as well as I do had it not been for public planning.

Is there really such a thing as unplanned economic development?

Comments

Not only this but

[underlankers.livejournal.com]

I wonder how libertarian economics explains the failed modernizations in the South before and after the Civil War? I mean if they're going to claim *those* governments were too controlling then they officially forfeit any claim to a more serious analysis than that offered by Marxism-Leninism-Stalinism, if they say that they were just right and yet the South could not industrialize during that point using libertarian methods, then their whole argument implodes on itself using just that example.

There was a great deal of people wanting to be the heroic Stakhanovites who'd turn the South into the superior of the North using only the private sector, not the Federal government as those dastardly Communist free-labor capitalists did in the North. Well, we know how that turned out.....

Re: Not only this but

[montecristo.livejournal.com]

For someone who seems to be so well-read on some aspects of history you have a surprising degree of ignorance. The south was anything but a libertarian paradise and to claim it was is mind boggling.

Re: Not only this but

[kylinrouge.livejournal.com]

You don't have to go that far back in history. Despite private entities populating the north (Oregon had electricity before The South), none of it ever decided to go downward, and it wasn't until the TVA that The South finally got itself some electricity, and even then it wasn't until the government mobilization of WWII that it became widespread.

[sealwhiskers.livejournal.com]

Is there really such a thing as unplanned economic development?

No.

But the good hearted libertarian naively believes in it.

....and many businessmen and corporations they support just want to have free reigns to do what they want for biggest profit.

I wonder if it's even any value in discussing things with people that seriously tell you that "financial incentive to be right or uncorrupted are the best". Such a strong fantasy will stay put until something within shatters. And not even then will some realize that this story has been told, time and time again.

[montecristo.livejournal.com]

Economic ignorance is not confined to one ideology. There are plenty of libertarians, just like the ignorant on the so called right and left, or the conservative or liberal ideologies (if you can call them that) who do not understand how the market works. Economic development is planned. The issue is whether or not people are free to make their own plans, with their own resources, or whether some sort of authority shall impose plans by force on everyone else and confiscate wealth they themselves did not produce. In the free market, entrepreneurs, using capital they have themselves produced, earned, homesteaded, or have had invested freely with them, plan economic development. The plans do not always work and produce profit but it is their own capital and that of their willing investors at risk. All other systems use force to direct the production and distribution of goods and services, and to the exent that they do they run into the calculation problem. The belief that the default understanding among libertarians is that economic development is unplanned says worlds more about the limits of your own imagination and knowledge, or your assumptions about the nature of "planning" than it does about libertarians.

"What is politically defined as economic 'planning' is the forcible superseding of other people's plans by government officials."
— Thomas Sowell

The uncorrupt financial incentive...

[sophia-sadek.livejournal.com]

... is like the idea of Mary's perpetual virginity. It is better not to laugh at it lest a libertarian Ignatius attempt to hunt us down and kill us.

[eracerhead.livejournal.com]

Libertarian policies have never been tested or put into practice anywhere. So the least risky thing to do is to of course to try it out on the largest economy in the world first.

That sounds like...

[sophia-sadek.livejournal.com]

... trying out a vaccine on a post-industrial population before trying it out on lab animals.

[montecristo.livejournal.com]

To the extent that it was free that was how it became large. Freedom, espcially economic freedom, is a scale, not necessarilly a destination or some utopian endpoint. One should always desire more freedom for the individual in the same way, and for the same reason, one desires less crime in society. Unfortunately, power, especially political power, tends to accumulate. If you read libertarian historical analysis, you find that history provides many examples of successful civilizations which have become economically less free as the political power within them became concentrated and more centralized. This has lead to their downfall or at least the degradation of the culture and its social strengths.

[ddstory.livejournal.com]

My proposition from yesterday remains. Allocate a small island to each ideology and make them compete. In 10 years check them out and whoever fares best, wins.

[notmrgarrison.livejournal.com]

"Although the Solyndra investment appears to be a piece of failed public planning, it has more of the earmarks of traditional robber baron private development."

lol.

And all those masons really believe in god, whereas the physicists just pretend so as to get along with their spouses.

At least the Masons...

[sophia-sadek.livejournal.com]

... do not worship a wooden owl.

The Myth of Strikethrough Innuendoes

[montecristo.livejournal.com]

Okay there is a certain amount of entertainment value, mostly when performing for the choir, in being clever and using strikethroughs as you have in this post, but all it really implies is that you cannot defend any explicit positions and that all you have are insinuations. Too bad you didn't link to an informative source so that it could be examined for errors, but that's just not how "clever" innuendo works, is it?

You are putting forward a straw-man, born of either disingenuousness or ignorance in this case. The assertion that either there is socialist "planning" of the economy or else there is a crony "capitalist" (thanks, Uncle Karl!) aristocracy of expropriation which does the planning, is a false dichotomy. The idea that libertarians do not believe in the existence of, have failed to decry the practice of, or actually endorse, expropriation, mercantilism, fascism, even by default, is a smear job, whether intentional or not. If you have actually read what libertarians, espcially the anarcho capitalists, have said about various historical expropriations and theft, and contrasted with their view of the free market, instead of merely what Marxists insinuate about them, you might have a rigorous argument here. Do you want to see why the straw-man assertion and false dichotomy is wrong? Read something like DiLorenzo's A Theory of Socialism and Capitalism (http://mises.org/etexts/SocCap.pdf).

One thing I truly admire about the Austrian Economists is that they are intellectually rigorous. They do not deal in innuendo in their scholarly works. They cite their enemies thoroughly and present their arguments accurately, and then dismantle them. Of course, someone would only find that out by reading them.

Re: The Myth of Strikethrough Innuendoes

[underlankers.livejournal.com]

So in your own words, O Maven of the Third Option, what does DiLorenzo say? You knowing more than all others and representing a totally new and unprecedented third option that's not those dastardly capitalists or craven communists or filthy fascists, you enlighten us the unwashed masses as to what these champions of something newer and greater than all else have to offer. Don't link to them, tell us.

Re: The Myth of Strikethrough Innuendoes

[sophia-sadek.livejournal.com]

Many apologies for not meeting your rigorous standard of academic excellence. If you have any interest in a labor history of nineteenth century economic development in America, I recommend the work of Richard O'Connor (http://books.google.com/books?id=2AB6AAAAMAAJ&dq=editions:ISBN0399111204).

Re: The Myth of Strikethrough Innuendoes

[mrbogey.livejournal.com]

I find that the most ardent critics of libertarianism and capitalism seem to not understand the arguments put forth by the supporters of said system.

However they tend to mock any criticism of their economic and political ideals as if the critics don't understand them.

[sealwhiskers.livejournal.com]

I would go further than ddstory and propose that all die hard libertarians and free marketeers really *do* get their own piece of land or island or whatever. That people who want a state with all its functions even *donate* generous money as a startup for them. (I would do it)

There they can live in peace on their land with their own rules or lack of them.

BUT, if they ever get sick, weak, bankrupt, old or just ripped off there is NO GOING BACK to a proper state. Just stay and eat the joys of freedom.

oh, and I also LOVE TAXES!! No one gets a bigger boner than me when I see a juicy governmental tax plan.

[ddstory.livejournal.com]

OK, but please not my island! Take another one this time.

[nairiporter.livejournal.com]

Or maybe an oil platform. Is the Principality of Sealand (http://en.wikipedia.org/wiki/Principality_of_Sealand) fine for starters?

[montecristo.livejournal.com]

Yes, perhaps you would make such an offer, but you don't run a government. Those who understand would never make or even offer that deal. They know better. Governments build walls, to one extent or another, to keep people in. Those who don't run governments and actually believe that they would be making a "safe bet," that such an experiment as is being proposed would confirm their own prejudices about human freedom are merely "useful idiots," who don't run much of anything and who have nothing to offer anyone in the name of any state. Of course, even as a hypothetical your offer in itself is interesting. Where would someone or some group of smug statists even get an island to offer the libertarians in the first place? You're a good one for offering someone someone else's property. The problem with statists is that most of them falsely believe that they, are the state. It's a common delusion of the collectivist faith. Will you expropriate the island from the natives who live there now? I thought your state's sole raison d'etre was to prevent such expropriation, especially in the name of an experiment whose outcome you already think is a forgone conclusion. Even a child is smarter than to offer someone the next door neighbor's house. Apparently statists are not. States are the prime social organizations that presume the authority over a given geographical area regardless of any of the inhabitants wishes.

[zebra24.livejournal.com]

Couple strange conclusions always happens in the lefties heads when they are discussing the libertarian ideas.

First - lefties think that libertarians wouldn't cooperate. It's stupid. Only difference - libertarians wouldn't accept the idea of attempts to make people cooperating using the force. You - think IRS and police have to make the rich to pay for your projects. Libertarians think if the project is really needed they will have fair negotiations with participants about who is subsidizing it and what is the conditions. Nobody will be forced into the project. Unlike Obamacare or Social Security Ponzi Scheme, f.e.

Second - compared to lefties, true libertarians are over-insured when you will ask government for help they most likely will help themselves and their neighbors.

And last one - you always have a choice to move into any communistic country and try to beg government to help you in need. Good lack with it.

America is worth attempts to keep whole country free of socialistic dictatorship. If someday libertarians went to the island, lefties will enslave the rest of the country for several generations.

[mahnmut.livejournal.com]

Maybe the Koch brothers would be so kind to invest some of their money and purchase a large plot of land somewhere in Iowa, and donate it for an experimentary libertarian commune? Then if it works fine, they expand? Would be the perfect PR for libertarianism.

Something like Orania here. Some of my fellow Afrikaner still believe they should live separated from the rest, so they've closed themselves inside a sort of a modern-time bantustan. The irony is kinda killing me, but still they seem to enjoy living in the 18th century, so who am I to judge?

YOU didn't get the point.

[zebra24.livejournal.com]

All conscious development is planned activity: badly planned/precisely planned, but still planned.

But thing you have to clearly differentiate is who is planning it and are resources he used belongs to him or not?

Problem with the state-planned economy is that nothing from resources consumed really belongs to the state - nor people nor funds nor metal/plastic/oil.. All this is just borrowed from the people, stolen through the taxes or rough slavery.

I bet you won't allow your president or mayor to schedule work and salary for you for the next decade without your agreement?
Same thing with the state-planned economy - they are planing it using resources that don't belong to them.

Compared with private companies: they only do plan with the resources that belongs to them or with the resources that were voluntarily given to them by owners.

Re: YOU didn't get the point.

[russj.livejournal.com]

+1

[kylinrouge.livejournal.com]

Any attempts at libertarian has lead to extreme human rights abuses, corruption, and public outcry for the government to do something about the self-serving robber barons. Between being fair to the consumers or making an extra buck, high-paid businessmen will always choose the latter. History proves this. Government is the only thing holding back humanity's inherent greed and selfishness.

When people die...

[sophia-sadek.livejournal.com]

... from using their products, they claim that they cannot be held responsible for the behavior of consumers.

[harry-beast.livejournal.com]

When I think about all the wealth generated by Apple, it makes me wonder which government agency thought it all up and, with plodding bureaucratic meticulousness, taxed and regulated it into what it is today.
Were it not for public planning, this Internet space would not be available for us to use.
While we're at it, which government department runs Livejournal? Or is it run by UN bureaucrats?

Governments can play a role in supporting innovation and economic growth by taking care of their proper responsibilities, e.g. infrastructure, education, national defense. Economic development is something that governments have never done very well.

[kylinrouge.livejournal.com]

By this do you mean government should engage in building infrastructure and then privatizing it? That's how we got the internet.

If we kept our infrastructure providers and service providers separate like they do in other countries like South Korea, then we wouldn't have so many last mile issues with the major telecom providers in the USA.