From: Smigrodzki, Rafal (SmigrodzkiR@msx.upmc.edu)
Date: Fri Dec 28 2001 - 13:52:41 MST
From: Technotranscendence [mailto:neptune@mars.superlink.net] wrote:
I was not arguing against using such models per se, but arguing against
using irrelevant models.
### Good. We agree to try and use good models.
------
> BTW, can you give valid historical evidence of the beneficial effects
> of the absence of a government on social development (I mean *total*
> absence of a government resulting in great improvements in quality and
> quantity of human life)?
Overall, these exampels seem to point out the societies that have less
government interference are better off. They create more wealth and
have more technological progress. Now, a counterargument to this could
be that there's a certain level of government needed -- more than
anarchy, but less than a modern welfare state. Some, like Rand and von
Mises, defend just this claim.
### Exactly. I do too.
------
However, absent any evidence or good
theoretical arguments for a lower limit on government, I think it
bolsters the claim for anarchism.
### Caloric restiction prolongs life-span in lab animals. Does it bolster
the claim for the Dickensian diet of one straw per day as the best diet for
a horse? Hardly. If you do not understand the exact way the government and
society at large interact (and nobody does), you cannot make extrapolations
of this sort. We have to rely on empiric evidence, which clearly shows that
ungoverned societies are transient phenomena at low population densities, or
immediately after the breakdown of a government.
-----
> Let's say the colonists just arrive
> haphazardly from other planets, in small groups, like the Native
> Americans, Polynesians, Easter Islanders. With no constabulary,
> individuals with a penchant for rape and pillage will inevitably act
> up.
> A tribal warfare system will inevitably develop (or can you give me
> historical counterexamples?)
Only the ones I gave you earlier.
### Too few and too limited to special, unusual conditions.
-------
> Coercion always comes first - government comes later. This played
> out in hunter-gatherer and agrarian societies hundreds of times
> (again, Native Americans, Polynesians......)
Is your argument that coercion comes, then as a reaction to it, people
form governments -- institutions for coercion -- to stop it? If so, my
argument would be that government is not necessary to do this. I
believe a competitive, market solution is much better.
### Examples?
I have a lot examples of my own (governed societies crushing everybody
else), so you need some very powerful ones of your own.
----->
> What do you mean exactly? Communes putting together their monies
> to buy land from the rich? Where on Earth did they form (aside from
> those insignificant credit unions)?
On your parenthetic comment: if credit unions are so insignificant, why
are banks worried about them? Why do banks lobby to have credit unions
severely restricted?
### Credit unions are insignificant as means of common military
self-defense.
(Their importance for the economy is another issue. I support them and I
agree with you that the banking industry's lobbying against them is immoral
and ecomically counterproductive)
--------
> Precisely what types of "small businesses" are going to help each
> other out, trying to stop land consolidation and how?
> Landowners do - they hire accountants, overseers, and hundreds of
> cheap
> peons to do the work, if such laboreres are available due to the
> scarcity of land.
But what about the overall context of this? If the peons they are
hiring are getting paid, then there's always a chance they can put aside
money or such to buy land themselves.
### In 17th century Poland some landowners would pay their farmhands in a
private currency redeemable only in the landowner's own general stores.
Since no other stores were allowed to operate on the farm, the prices were
finely balanced to prevent starvation, give a little extra for vodka, and
keep the workers utterly dependent. All of it without any gov't
intervention. No taxes, either. Pure, unadulterated private initiative, with
a large enough farm (10x5 acres), becomes worse than a state.
-------
Also, if the wealthy landowners in your model compete with each other,
then the price of land will also rise as will the price of their
laborers. (This is why subsistence wages probably won't be the rule.)
### They were and in the New Colombia they would (nothing will prevent
landowners from issuing currency, and if you are desperate enough, you will
not insist on being paid in gold).
------
Unless you posit some sort of class consciousness for the wealthier
landowners -- and if you do, how does it arise (since in your original
model everyone starts out the same) and how does it perpetuate itself
(as consolidation proceeds, the profit to be made by compete against
each other will rise plus) -- there wil lbe no reason to expect a two
class system of everyone else and big landowners.
### As soon as you make a couple hundred thousand K more than the proles,
you develop a class consciousness.
Thousand-year experience shows that a class system emerges spontaneously. It
is similar to the phenomenon of symmetry-breaking in physical systems, which
frequently results in a phase transition.
-------
(On the perpetuation
issue, imagine this. As you say, all the landowners want to increase
their shares. Some are better than others. X, e.g., is the best in
area A, while Y is the best in area B. When X buys up all of A and Y
buys up all of B, as you assume, why wouldn't X and Y compete with each
other? Why wouldn't one or the other attempt to buy each other out?
Why would they stop only at that moment and not before or after?)
### Once a few families own 95% of everything, the system stabilizes, until
changed by outside forces or technological developments. See Russia, France
- sometimes minor reshuffling occurs, with little influence on the life of
the landless serfs).
------
>
> Who is going to ward off mergers??? Why? How?
A contractual agreement could arise under private property where a group
of farmers agree to a convenant not to sell off their land. This is a
restriction on their property right, but one they agree to. (This
happens today with neighborhood convenants -- e.g., where people agree
only to sell their property if their neighbors agree to the sale or
where people voluntarily restrict the uses to which their property can
be put, such as disallowing commercial or nuisance uses. There are even
planned communities where this is carried out to a further degree.)
### Happens mainly with rich folks who want to preserve the scenic views and
keep the colored out. This has no relevance to the agrarian aconomy.
----------
Why would people do this? It's often for cultural or property value
maintenance. In the former case, people want to live in certain
settings. In your example, it's quite possible to imagine yoemen
farmers who decide that 100 acre farms are the ideal and anything bigger
will destroy this sort of Jeffersonian culture of self-sufficiency.
(I'm not saying the whole planet would adopt this.)
### Exactly. If the colonists agree to restrict their freedom (to freely
dispose of their property), the system will work. Of course you will need to
enforce such restrictions. You will need a police force. User fees (to use
an euphemism). A state.
Since the colonists' offspring, who themselves didn't participate in the
decision making, are bound by the laws of their fathers, they are not free
agents, and the system is not an anrchy. If they rebel, the (initially)
"private" police force chartered by their ancestors will stop them, or else
the system will break down.
Either way you are proving my point - absolute economical freedom, even in
the framework of non-coercion, and respect for contracts (miraculously
maintained without cops), contains the seeds of its own destruction.
-----
> We agreed there is no coercion allowed in this experiment, so you
would
> have to be pretty smart, trying to stop landowners from consolidating
> their holdings by marriage.
Not at all. This would depend on what marriage entailed. All of this
has to do with the culture and what people agree to.
### But what if they don't agree with you? If somebody says he wants to
marry his neighbor and combine their holdings, what can you do about it?
(Remember, you have no cops working for you, and no laws, and your neighbor
didn't sign a contract with you)
--------
>
> You are forgetting that the large landowners make more money than
> the small ones, both gross, and sometimes even per acre (they can
> afford the expensive, imported machines). The less land available for
> sale there is, the more difficult it is for the small operators to
join the
> game.
Still, as supply decreases, all other things being equal, price will
rise. This might mean in your model that latter sellers make more
money -- in fact, maybe enough to not turn into subsistence workers for
big landowners. This will create an incentive to hold out.
### You can't hold out if you have 2 acres (from the division of you
father's 10 acre farm). You have to sell, or borrow against it. You will
lose. Just ask small farmers (who all scream for subsidies, because that's
the only way they can survive).
------
Let's look at this realistically. In any such society, there will be
incompetent landowners -- for whatever reason -- and unlucky ones.
There will be highly competent ones and very lucky ones -- the guy get
the best top soil even if his farming practices leave something to be
desired. But there will also be the vast middle grade in between. The
inefficient landowners probably should get bought up and find something
else to do. The ones in the middle will always have a chance to be
among the buyers (driving up the prices for the big guys) or to plan
ahead, since their fortunes are not so marginal. Unless you assume from
the start there are only good morons and evil geniuses -- yet with both
groups deciding to abide by libertarianism -- your model probably won't
come about.
### In a true free market economy, over the long run the winners take all.
If you can own unencumbered, productive land, have enough for your private
spending, and buy a little bit more land every year, your profits keep
growing. It means you can outbid others, including the runner up. In the
end, there is only one. I prefer the slightly unfree market, with provisions
against land monopolies.
------
>> Three, you assume that inheritance alone will preserve large estates.
>> Historically, this has not been the case. In fact, inherited wealth
>> often declines after a time. Surely, there are exceptions, but even
the
>> biggest family fortunes tend to get consumed over time and less
>> entrepreneurial and frugal family members take over.
>
> Historically, that *was* the case, at least in countries with
> primogeniture (or can you give me specific and numerous
> counterexamples?).
Actually, from my reading this was _the_ problem in the Frankish
kingdoms, where land was divided equally among male offspring. What
happened was big estates eventually were broken into ever smaller
ones -- a process helped by other social processes going on in the early
Middle Ages.
### Again, I am sorry for sloppy quoting. I meant to say that primogeniture
maintains large estates. Sorry for the confusion.
---- But, by construction, the society you're talking about is capitalist. It has a free market, respect for property rights, and initiation of force is a no no. Also, the process of accumulation in your model is supposed to be that the people on their toes stay on top. If this is so -- and how is this any different from other models of capitalism in action -- why would one expect vast estates to only grow and never decline? How could one guarantee that a guy who is competent would pass that competence along to his heirs? ### You can hire a smart but poor supervisor, give him a good cut (but not enough to be a competitor). You buy not only farmhands, you also buy the brains to control them. Vast estates will sometimes fail, too, and will be devoured by their neighbors, making them even bigger. ---- > This is orthogonal to the issue of land concentration - land is > expanded only if there is population pressure, Wrong! Land is expanded when it becomes economical to do so -- or, even more accurately, when some people think it will be economical to do so. (Entrepreneurial action is based on perceptions and expectations -- not necessarily underlying realities. That's why some projects fails.) ### It becomes economical only of there is incresed demand for the land's products - food, fiber. This demand appears only with increased population (so called inflexible demand). ------- > land at competitive prices - entrepreneurs cannot make money by offering > cheap "land" in skyscrapers to undercut the traditional landowners They can if it becomes profitable to do so. Right now, it is not profitable to do so -- or no one has found a way to make it so. (After all, the price of land could rise to make other methods more profitable or the cost of other methods -- even formerly unknown ones -- could decrease, or some combination of the two could come about.) ### Why didn't it happen here on Earth (except if you have gov't intervention - like in Japan, or Europe, where marginal land is developed thanks to artificially high food prices). No, in a real capitalist economy that kind of waste would not happen. If you have large estates producing a lot of food, the demand for land will not grow in this way, because the price of food from such artificially developed land would not be competitive. ------ > (as > opposed to memory chip makers being able to flood the market with every > new advance in technology). Marginal land sometimes offers a refuge for > subsistence farmers, but with enough pressure even they might end up > being displaced. This is only your assumption here. There are also other things to do with land aside from farm it. Unless you assume only farming is allowed and that no one can find other profitable uses for land, then your model has other flaws in it. ### What else can you do with land in an agrarian economy? ------ In essence, if you make a model with enough assumptions in it -- however unrealistic or unlikely they may be -- you can get just about anything you want. This is how, e.g., we get Keynesian economics. (For criticisms of Keynesian macroeconomic models, see Roger Garrison's _Time and Money: The Macroeconomics of Capital Structure_. I specifically brought up Adam Smith's corn economy as such a model. Granted, Smith's model is not all that bad, but when taken too seriously, it can lead to results we never see in real world economies, even in farm economies. He abstracted away from the richness of real world economies. From this, Marx was basically able to build his highly unrealistic model of capitalism, which is very close to your model. That's why I brought this up earlier.) ### The only unrealistic assumption I made was the absence of government. Everything else was kosher. And Marx' conclusions from his model are almost diametrically opposed to mine. Rafal
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