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Fritzlein
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Re: Bitcoin digital currency
« Reply #45 on: May 27th, 2011, 4:09pm »
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on May 27th, 2011, 2:21pm, UruramTururam wrote:
Rothbard is for anarchocapitalism which is unstable (as an organization that specialises in violence - a mafia - may take it over and establish a state installing itself as a government)

Yes, the trouble with demanding liberty is that it is always in the interest of some to violently deprive others of their liberty.  There are plenty of reasons to see the State as the source of oppression and originator of violence, but let the State once disappear, and you would see oppression and violence on an even greater scale.  Anarchists have an untenably rosy view of what happens naturally.
 
My view is that the instability caused by a lack of government does not apply only to violence, but also to the economy.  Free markets are not naturally free; they are so because the government maintains them.  Markets, too, are unstable, and tend to give rise to monopolies (market mafias, if you will).  Doesn't every economist agree that monopolies are bad?  Monopolies mis-allocate resources, reduce efficiency, retard the creation of wealth, etc.  If governments would "just get out of the way" of free markets, the markets that would arise would not be free for long.
 
Similarly, if the point of a gold standard (and/or BitCoins) is to take monetary policy power away from governments, because governments have a history of abusing that power, it is starry-eyed to assume that the power would just disperse into the air and magically belong to everyone.  On the contrary, that power would coalesce among people who have even more incentive to abuse it than the government does.  There would still be monetary policy all right, but it would be set by a less transparent process than the Federal Open Market Committee, and with the best interests of fewer at heart.
« Last Edit: May 27th, 2011, 4:29pm by Fritzlein » IP Logged

UruramTururam
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Re: Bitcoin digital currency
« Reply #46 on: May 27th, 2011, 4:43pm »
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on May 27th, 2011, 4:09pm, Fritzlein wrote:
Free markets are not naturally free; they are so because the government maintains them.

 
And here's the point where we fully disagree.  
 
Market can be free only if the government (or anything that can use force to make people do something) has nothing to do with it. Being "free" is the natural and stable state of the market and instabilities disappear naturally. Being maintained by the government is the ending point of being "free".
 
And also: it is impossible to form a monopoly without the help of the power (government).
« Last Edit: May 27th, 2011, 4:44pm by UruramTururam » IP Logged

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Re: Bitcoin digital currency
« Reply #47 on: May 27th, 2011, 5:21pm »
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on May 27th, 2011, 4:43pm, UruramTururam wrote:
And here's the point where we fully disagree.

Yes, I would say "fully" describes our disagreement well. Smiley
 
Monopolies can be created from the pure power of money.  Take any finite resource (say oil or right-of-way for roads), buy all of it at free market prices.  If anyone won't sell out to you, undercut them on price until they go broke.  Economies of scale naturally work in favor of the big guy forcing the little guy out of business, as does the ability to set standards and control the supply chain.  Even if companies start out in competition with no evil intent, many factors join forces to produce a single winner.  
 
You don't even have to control all of a resource yourself; if the number of people controlling a resource is reduced to a relatively small number, then they can agree to fix the price.  Monopolies can be created by collusion as well as by purchase and marketplace victories.
 
Once you win, use your monopoly power to restrict supply and set the price far higher.  The market will try to correct for this imbalance by using less of the resource, finding substitutes, etc., but the upshot will be that the monopoly profits, everyone else suffers, and the total wealth created by the economy is less than it otherwise would have been in the presence of competition.
 
All this requires is property rights, i.e. some entity to enforce that you get to keep all of what you bought and do whatever you want with it, even if you are using your monopoly to the detriment of the common good.  If there is any entity (governmental or not) that maintains property rights, then people can be "forced" to do all sorts of things inconsistent with a free market.  A starving man will pay anything for a sandwich, if only one person is selling sandwiches.
 
The idea that monopolies will be corrected by market forces (i.e. that higher prices will cause competition to spontaneously reappear) is about as realistic as saying that the mafia couldn't install itself as an ersatz government because individuals would spontaneously take up arms and rebel.  Dictatorships are unstable (as we see in Libya) but they can survive a long, long time first (as we see in Libya).  Similarly the barriers to entry in some markets can be enormous, such that nobody can simply decide to be a competitor.
 
The idea that monopolies don't arise naturally, well, I don't even know where it is coming from, so I don't know where to attack it.  Smiley
 
The main point on which we agree is that freer markets are better.  We also agree that government involvement in markets by definition makes those markets less than perfectly free.  But the result can still be a much freer market than an absence of government intervention would produce.  Government isn't the only hindrance to free markets, nor the worst.  There are certain types of monopoly power (beyond just the police) that should only be held by the government, because it doesn't work to have them held in common.  For other resources, it works best to have them privately held, but with the government stepping in (ala Microsoft) to prevent a monopoly from abusing its pricing power.
 
Of course, the government can abuse its regulatory power to create crony capitalism, just like it can abuse its police force to create a police state.  That's a bad thing against which the citizenry must rise up.  But a decent government intervention in markets will work out much better than a total lack of government intervention in markets.
« Last Edit: May 27th, 2011, 5:34pm by Fritzlein » IP Logged

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Re: Bitcoin digital currency
« Reply #48 on: May 27th, 2011, 6:35pm »
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There isn't a free market without a government to keep it free.
 
An unregulated free market can quickly become a monopoly.
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Re: Bitcoin digital currency
« Reply #49 on: May 27th, 2011, 10:32pm »
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on May 27th, 2011, 11:39am, Fritzlein wrote:
It is important that nobody can take open code, make changes to it, and make the new product proprietary.  Companies have tried to do that, but they have lost in court every time.

 
I know this was very much a side comment, but since it relates to a subject that is rather more important to me than the main conversation I feel compelled to respond. Tongue
 
I think you may be confusing rms' view and the GPL license restrictions with the broader open source community. Many open source licenses and the projects* using them have no restriction against using the code in pretty much any way you would like, including making a proprietary product out of it. Rather confusingly rms insists this is less free than his restrictions, but I digress.
 
Janzert
 
* Including OpFor with its MIT license of course, although it does fall under the somewhat awkward position of needing an Arimaa license from Omar to really reuse most of the code.
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UruramTururam
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Re: Bitcoin digital currency
« Reply #50 on: May 28th, 2011, 3:01am »
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on May 27th, 2011, 6:35pm, rbarreira wrote:
There isn't a free market without a government to keep it free.
 
An unregulated free market can quickly become a monopoly.

A common misconception. Sad
 
In fact goverments try to make people believe in that for their own sake.
 
But: it is logically impossible to form a persistent monopoly without the help of the government.
 
Governments fighting monopolies fight the threat created by themselves. That causes people think they are useful in sustaining the economy while government can only harm the economy. The government is necessary for the sake of internal and external safety but for the economy it is always the "necessary evil".
 
I'm too bad in explaining and too bad in English to show the proof of the above, but again - please read "Human action" and/or "Man Economy and State" where all those issues are fully addressed.
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Re: Bitcoin digital currency
« Reply #51 on: May 28th, 2011, 11:05am »
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on May 27th, 2011, 10:32pm, Janzert wrote:
I think you may be confusing rms' view and the GPL license restrictions with the broader open source community. Many open source licenses and the projects* using them have no restriction against using the code in pretty much any way you would like, including making a proprietary product out of it.

I am aware that open source licenses come in many flavors, and did feel a twinge as I was writing my oversimplified summary, but I barreled on for several reasons: (A) It wasn't my main point.  I was trying to point out that competing within a government-supported legal framework, however radical the innovation, is somehow less radical than competing in a way the government would consider an existential threat.  Thus BitCoins not only have to win mindshare, like GPL software; BitCoins also will likely be declared illegal.  (B) Although I can understand giving away software with no strings (or very few strings) attached, I don't foresee that having the same social force as GPL'ed software.  Haven't there been many free projects swallowed up by commercial entities, after which the free version was abandoned?  But we shall see.  I could be as wrong in my expectation as the businessmen, fifteen years ago, who couldn't believe unpaid programmers would ever participate in GPL projects in enough numbers to challenge paid developers cranking out propriety software.  The free software movement is yet young, and may have further surprises in store.
 
Is it mostly academics that prefer fewer restrictions than GPL?  I would expect that, given how they (or should I say we?) get satisfaction from adding to the sum of human knowledge without much caring who makes money from the addition to the total.
« Last Edit: May 28th, 2011, 11:16am by Fritzlein » IP Logged

Janzert
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Re: Bitcoin digital currency
« Reply #52 on: May 28th, 2011, 6:59pm »
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on May 28th, 2011, 11:05am, Fritzlein wrote:
Haven't there been many free projects swallowed up by commercial entities, after which the free version was abandoned?

 
The only ones I can recall offhand is where the primary authors decided that open source wasn't accomplishing their goals and made later versions closed source.
 
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The free software movement is yet young, and may have further surprises in store.

 
I'd have to say it's the closed source software movement that is young. Wink
 
Quote:
Is it mostly academics that prefer fewer restrictions than GPL?  I would expect that, given how they (or should I say we?) get satisfaction from adding to the sum of human knowledge without much caring who makes money from the addition to the total.

 
Heh, my general feel is the opposite. Academics are more likely to be directly invested in their project as the "end product" and don't want to see someone take it and make money off of, or hide improvements to, their work. Whereas non-academic originating projects are often "infrastructure" for the person developing it and they don't care quite so much what others take and do with it. But overall I don't really see that large of a difference between academics and not in regards to license preference. Personal preference (or maybe ideology) seems to cross that line without much problem.
 
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Re: Bitcoin digital currency
« Reply #53 on: May 28th, 2011, 7:43pm »
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on May 28th, 2011, 6:59pm, Janzert wrote:

 
The only ones I can recall offhand is where the primary authors decided that open source wasn't accomplishing their goals and made later versions closed source.
 
 
I'd have to say it's the closed source software movement that is young. Wink
 
 
Heh, my general feel is the opposite. Academics are more likely to be directly invested in their project as the "end product" and don't want to see someone take it and make money off of, or hide improvements to, their work. Whereas non-academic originating projects are often "infrastructure" for the person developing it and they don't care quite so much what others take and do with it. But overall I don't really see that large of a difference between academics and not in regards to license preference. Personal preference (or maybe ideology) seems to cross that line without much problem.
 
Janzert

 
I'm not a programmer, but I know some programmers academics and non-academics, and in my experience it is exactly the way Janzert describes it.
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Re: Bitcoin digital currency
« Reply #54 on: May 28th, 2011, 10:48pm »
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on May 27th, 2011, 2:21pm, UruramTururam wrote:
A few years ago I could write what you wrote a few posts above that was my way of thinking - based on Keynes economic theories in fact.

By the way, I don't identify myself as a Keynesian.  In particular I reject the notion that war is good for the economy, whatever else I may have said that reminded you of Keynes.  Ideas should be considered and tested individually, and not accepted or rejected wholesale based on who put them forward.  Brilliant people can be brilliantly correct about some things and shockingly wrong about others.
« Last Edit: May 28th, 2011, 10:58pm by Fritzlein » IP Logged

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Re: Bitcoin digital currency
« Reply #55 on: May 28th, 2011, 10:55pm »
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on May 28th, 2011, 6:59pm, Janzert wrote:
I'd have to say it's the closed source software movement that is young. Wink

May I then say that the GPL is young?  And if the GPL wasn't inspired by the hijacking of an earlier generation of free software, what is your theory on why the GPL came into existence and gained a significant measure of popularity?  You seem not to have a very high opinion of the GPL; if that is true, would you be willing to explain directly why that is?
 
Quote:
But overall I don't really see that large of a difference between academics and not in regards to license preference. Personal preference (or maybe ideology) seems to cross that line without much problem.

Thanks for the information.  I wonder how personal preference (or ideology) with respect to software licensing arises, and what else it is related to.
« Last Edit: May 28th, 2011, 10:59pm by Fritzlein » IP Logged

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Re: Bitcoin digital currency
« Reply #56 on: May 29th, 2011, 9:41am »
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on May 28th, 2011, 3:01am, UruramTururam wrote:

 
it is logically impossible to form a persistent monopoly without the help of the government.

 
Why does a monopoly need a government to keep its control, when it can kill off any emerging competition by temporarily keeping prices low enough to get them out of business?
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Re: Bitcoin digital currency
« Reply #57 on: May 29th, 2011, 5:31pm »
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on May 29th, 2011, 9:41am, rbarreira wrote:

Why does a monopoly need a government to keep its control, when it can kill off any emerging competition by temporarily keeping prices low enough to get them out of business?

 
In (very) short - because this "temporarily" would be in fact "most of the time".  As the prices start rising again a new competition will emerge or - most probably - a part of the monopolistic trust will decide to compete against the rest of it. So the prices will eventually remain low.
 
The government should react only if the trust tries to use force against the competition (no matter internal or external) but not for any reason connected with monopolies but because using the force is prohibited as such.
 
By the way, as an empiric digression,  there was no stable economic monopoly without a force (government or mafia) background in the history of mankind. The so called "walmartization" is a black legend created by the competition to turn the government against a strong competitor. In fact in the areas where Wallmart expanded prices drop and then rise, but the level after the rise was lower than before the drop. So it was good for the consumers.
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Re: Bitcoin digital currency
« Reply #58 on: May 29th, 2011, 7:13pm »
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on May 29th, 2011, 5:31pm, UruramTururam wrote:
In (very) short - because this "temporarily" would be in fact "most of the time".  As the prices start rising again a new competition will emerge or - most probably - a part of the monopolistic trust will decide to compete against the rest of it. So the prices will eventually remain low.

As a former Yahoo employee, I have to raise the example of Google's dominance of Internet search.  Indexing the Internet is not cheap.  It costs at least a billion dollars per year.  But, having created the index, you get to use it for all your customers at relatively low cost per use.  Yahoo tried to keep up, but they couldn't afford to spend as much on it.  As a result, new Web pages that would appear within a day on Google would take a whole week to appear on Yahoo, and similar stuff.  So Yahoo finally gave up.
 
Now Google's only competitor is Microsoft.  Microsoft has deep pockets and is willing to spend just as much as Google is on indexing the Internet.  Unfortunately for Microsoft, they are losing money at it.  In addition to the expense of creating an index, they have a branding problem.  If you put the two sets of results on the same search side by side, but randomly assign the logo, people will prefer the results labeled "Google" over the results labeled "Bing", regardless of which engine generated the results.  It is only a matter of time before Microsoft decides Bing is not winning and decides to stop losing money on it.
 
Google already charges more than Microsoft, and if the competition goes away, they can charge still more.  Internet search is an industry with a massive barrier to entry.  Raised prices aren't enough to spontaneously create competition, because anyone who tries to compete has to deal with the likelihood that they will lose a huge upfront investment.  If Google is smart, they only raise prices 50% so that the invitation to compete is still less than the fear of losing.  Then everyone (except Google) is worse off.  The greater the hurdle to competition, the more the monopoly can abuse its pricing power without any competition spontaneously arising.
 
The government wasn't responsible for reducing the number of search engines to two, and if it drops to one, it won't be the government that picked the winner.  Nobody has used force.  The economy of scale creates the monopoly, and the barrier to entry enforces it.
 
As for Walmart, I agree that it has been good for consumers on the whole.  But Walmart has very similar competition on either side; Target at a slightly higher price point and dollar stores at a slightly lower price point.  So even though they have crushed KMart and other direct competition, they are still have enough competition to keep them honest.
 
How do you feel about AT&T and Standard Oil?  Or to get more recent, Microsoft Windows?  A judge demanded to see the prices Microsoft was charging retailers (Dell, HP, etc.) for Windows.  They didn't all get the same wholesale price.  The judge ruled that Microsoft was abusing its pricing power to stifle competition and punish retailers who didn't do what Microsoft wanted.  The public didn't get to see the prices, but that's what the judge concluded, and I think it is a bit much to insist a priori that Microsoft couldn't have been a monopoly and couldn't have abused its pricing power, because that sort of thing never ever happens in the history of mankind.
« Last Edit: May 29th, 2011, 8:10pm by Fritzlein » IP Logged

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Re: Bitcoin digital currency
« Reply #59 on: May 30th, 2011, 12:25am »
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on May 28th, 2011, 3:01am, UruramTururam wrote:

it is logically impossible to form a persistent monopoly without the help of the government.

A common misconception Smiley
Monopolies can happen in a number of ways, including:
Natural advantage-ownership of critical resources
Economies of scale-Large companies do the job better, so small companies don't start
Collusion-Every incoming business is bought by/colludes with an existing one, because of higher profits
Government subsidies
As you can see, government can prevent monopolies, particularly the collusion type.
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