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Laissez-Faire in the Global Marketplace?

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How do you mean, "tainted"?

The laissez-faire nation would have a government that enforced policies which enabled laissez-faire to exist. So, at least that nation would be consistent in its free economic trade. In dealing with other nations, the citizens of the free country really only need to worry about possible threats to their own freedom. So if, say, a legitimate nuclear threat was issued by another country, you would "taint" your own freedom (and by extension freedom to trade) by providing the threatening country with economic benefits.

Edited by JASKN
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     How could a nation with Laissez-Faire Capitalism remain untainted while trading with mixed-economies?

By "tainted," are you referring to price manipulation, such as those commonly in practice? For example, most national economies subsidize their oil companies in order to reduce the price of the barrel, thereby making it competitively priced with other nations' oil exports. I admit, I am not an expert in these commodities, or nationalized industries, but I know it is a common practice, even in the United States.

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By tainted, I mean the market distortions caused by trading with businesses subsidized by the governments of mixed economies (among other things the economic intervening of governments do to skew the natural machinations of Capitalism). Shall I name them all or aren't they well know by now? Shall I define my uses of the words distortions and skewing or are you ready to stop pretending to answer the question (in your first sentence with your allusion to a government that'll somehow make sure the system remains Laissez-Faire? I believe it can be done. I don't know how yet. "Govt'll handle it" aint a good enough answer for me. How will the govt protect a Laissez-Faire system while citizens import/export to/from nations aided or hindered by their mixed economies (which taint the market)?

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That last one was for JASKN. This is for you, Repairman: Yes. I do mean things such as the govt subsidies of oil. And yeah our US mixed economy is guilty of many market tainted evils. I BELIEVE THERE IS A WAY TO TRADE GLOBALLY IN A LAISSEZ FAIRE UTOPIA. I don't know how yet. I am not trying to disprove Objectivism (It can't be done). I wanna figure out how it will work in this 21st century global market. It's a tough question. Any ideas are appreciated.

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Dearest Repairman. I'm a newbie to this site (but I've been a devoted Objectivist, studying hard and thinking about it for 5 years and rereading Hugo too), so as a newbie I don't know if you got a direct response. If not, yes, you understand what I mean by tainted; it's obvious to everybody this topic is for. I don't mind clarifying connotations, & as Objectivists, I think most of us already have the same understanding of certain things we use as premises ti build on, which will save the time we'd waste reducing concepts back to the axioms. Thanks for taking an interest in an issue I'm trying to figure out. I love this think tank.

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How will the govt protect a Laissez-Faire system while citizens import/export to/from nations aided or hindered by their mixed economies (which taint the market)?

The government's only job is to protect people from others, either physically or in the form of fraud or theft.

You provide the context of one free country trading with another non-free country. Subsidies are just one bad thing about non-free countries, and of course there is the complicated aspect of degrees of non-freedom. We can look at the world today to get some idea of how this would play out. The US is much more free than some third world countries. When businessmen decide to trade with the Third World, there is higher risk. Sometimes everything works out for a while. Other times, the third world government nationalizes privately owned and operated American businesses, effectively destroying the Anerican investment in that country. None of this, however, has to affect American policy, policy which upholds more property rights, and is more free for American citizens.

What problems do you see arising when a laissez-faire country trades with a subsidized country, specifically? What's wrong with it?

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This topic is one of interest to me, and I am glad some to see some discussion on it. If I don't respond fast enough, it is only because I work full-time, and look after my own properties.

As I see it, America's mix economy is largely responsible for setting a standard for modern-industrialized nations more than any other. Historically, England, France, and Germany were leading models. Their economies had always had some sort of paternalism or protectionism corrupting industrial growth in Europe. As the United States developed its industries, trade barriers were also established, although the lack of paternalism of government regulation allowed rapid growth, and the shear geographic size of the New World industrial power ensured an expanding market. Even with foreign trade-barrier, we could price our goods competitively. Higher wages and lower land prices drew the best of Europe's craftsmen and farmers to America. European economies suffered from militaristic ambitions, and burdensome aristocrats interested mainly in maintaining their regal life-styles.

So, corrupted market economies are nothing new in Europe, therefore their former colonies find them acceptable for their nations. After two world wars and one Cold War corrupted the US economy, US workers and industrialists alike find "specific policies" of a corrupted economy acceptable. I don't wish to argue whether or not those wars were necessary, but President Dwight Eisenhower himself warned our nation against the forces of an "military-industrial complex," the nucleus of an expanded corporate welfare state.

If I may use a metaphor: How does one put the genie back in the bottle?

It is true that other nation will try to "conquer" American markets, once we lower our trade barrier, reduce subsidies, or attempt to deconstruct the corporate welfare state. And in addition, the unemployment rates would, for an unknown period, escalate into armies of disgruntled mobs.

Part of the solution is to attempt to educate the mob before the crisis arises. So far as I can see, that ain't gonna happen. People have abandoned reason and self-interest, in favor bromides, cult-of-personality politics, or "painless" injections of stimulus.

I don't wish to say, "I'm stumped," but we've all seen the riots against the World Trade Organization, the Occupy Movement, the blather of Tea Party populists, and frankly, ignorance has the overwhelming strength in numbers. Our "democracy" is failing.

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I think the same principal applies here as to individuals dealing with their own governments: you're acting under duress, so the fact that an importer or exporter complies with bad laws in another country doesn't make him a party to those laws and doesn't amount to approval.  Both countries will be less wealthy if one of them imposes import / export restrictions, but that is not an individual trader's responsibility.

 

One that I still wonder about is retaliatory tariffs.  If country A taxes imports from country B, or forbids them altogether, is country B justified in fighting back with its own tariffs?  I'm inclined to say no.  Country B's exporters can find markets elsewhere.

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JANSKYN youre still missing the point. Repairman, your knowledge of mixed-economies is helpful for foreseeing the problems that'll occur when a laissez-faire economy trades with those types of economies. Reidy you are right when you say no to retaliatory tariffs and you are in the right area of my search for solutions. Tariffs, though inappropriate in laissez-faire, are a type of solution considered to combat the skewing of a markets natural forces and I thank you for putting us on a solution footing. Aristotle used to genuinelyproferr the theories of those he knew were wrong (which helped me to confirm their wrongness) & you, Reidy, did a good Aristotelian deed. JANSKYN, you said govt'll handle it & now you shared with us govt's proper role in economics. But we're talking about a hypothetical laissez faire utopia dealing with nations who cheat and won't be put out of business by market forces for many years because they can force their citizens to comply with their economic-interventionist policies. Protectionism by a laissez-faire government would of course be wrong, but I'm glad it was mentioned as a solution often proposed by mixed economies dealing with each other. We all understand the role of govt. Protecting and retaliating against the use of force (foreign govts' market coersion) so maybe we can consider the issue along those lines, among others. Thanks.

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Let me pose a hypothetical concrete: People in Galt's Gulch will buy their Corn from a statist nation's corn seller because it's cheaper (due to subsidies) than the corn sold in the Gulch. And since the only coersive monopolies are by govt intervention, the Gulch will be tainted by a coersive monopoly. The statist govt will loot its neighbors when it runs low on subsidy monies so the natural course of monopoly removal won't apply to the coersive monopoly. This will be govt intervention into the Gulch's economy. It doesn't matter if it's a foreign govt...it's govt intervention into the Gulch's economy, thereby tainting the laissez-faire system, in fact negating it by definition. How can this evil be prevented by a Gulch Govt remaining in its proper role? & please don't say that a man in the Gulch who wants corn should willingly pay the higher Gulch price. We know that capitalists vote with their dollars (as it should be). NOTE: GALT'S GULCH IN THIS HYPOTHETICAL HAS A ROBUST MILITARY AND A COMPETENT POLICE FORCE. AND GOOD DIPLOMATS.

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A possible response to theestevearnold's hypothetical concrete:

 

It would free up a corn field in Galt's Gultch which might be used to raise milking cows to supply the butter to spread on the gift of corn. The coersive monopoly penalizes the citizens of the country forced to pay the subsidies, not the recipients. When the statist government comes to loot Galt's Gulch, the robust military and competent police force are there for if the good diplomats are met with irrationality on that front. At the risk of playing police officer to the world, military intervention may be used to discourage the statist government from looting its neighbors, leaving the statist government to the fate of the consent of its governed.

Edited by dream_weaver
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Let me pose a hypothetical concrete: People in Galt's Gulch will buy their Corn from a statist nation's corn seller because it's cheaper (due to subsidies) than the corn sold in the Gulch. And since the only coersive monopolies are by govt intervention, the Gulch will be tainted by a coersive monopoly. The statist govt will loot its neighbors when it runs low on subsidy monies so the natural course of monopoly removal won't apply to the coersive monopoly. This will be govt intervention into the Gulch's economy. It doesn't matter if it's a foreign govt...it's govt intervention into the Gulch's economy, thereby tainting the laissez-faire system, in fact negating it by definition.

This is all wrong.

 

For one, there is no perfect economy, which you seem to be alluding to as your goal in this fantasy world. There isn't even a perfect government. People are always being born as ignorant savages needing to be educated, but with their own free will -- thus, nothing concerning long-term civilization is guaranteed. The next generation may move society in a less-free direction. With an economy and all dealings between men, we know freedom works best thanks to history, and thanks to Rand, we even know why. With a government, however, people (being people) will always try to undermine the principles of freedom, even with very good laws in place which uphold freedom (and by extension laissez-faire), and even with a well-educated populace. So, your effort to prove this impossible thing, ie. "perfect economy," is wrong.

 

In the same vein, worrying about what effect another country's subsidized goods has on your laissez-faire economy is pointless, by itself. As a food producer who buys corn wholesale from a subsidizing country, you may worry about the (lack of) wisdom concerning the future health of your business in buying an artificially-priced commodity. You may also worry about the quality of the corn, considering a less-free country probably also has workers (and farmers) who are less concerned with pride in their own work. But, none of this concerns the government. The government only needs to worry about protecting the freedom of its own citizens.

Edited by JASKN
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Thank you dream_weaver for your brave statement about risking policing the world. That took the courage I didn't have, in order to pose a legitimate, and very un-PC solution. I understand that each case must be considered in context and, since none of us want war, the matter to remove a statist dictatorship from the global marketplace (while justifiable if in some cases), is a very serious matter. I realize how serious now. Good one dream_weaver. And I'm not implying your hawkish. I'm saying you offered one scary, legitimate solution. And as to your part about using the Gulch's cornfield to adjust to the market situation; I think that that is what will happen in this hypothetical while the people discuss/debate a solution to resolve the "tainting" of their lassies-faire system. Thanks. Your solution is valid. I wanna read more solutions.

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okay jaskyn I get it, you think I'm all wrong. And somebody scolded me for calling you on your pedagogal responses to my question, telling me I'm a newbie and I better learn to act right. I am an Objectivist. You called my hypothetical lassiez-faire capitalist system impossible. Are there other tenets of Objectivism which you think won't work? I had proven to me, all the tenets of Objectivism will work. I wanna figure out the details of its application to reality. Please feel free to offer solutions to the implementation of a lassiez-faire nation in a global market. I am no novice to Objectivism. I am new to this glorious website and I wanna be treated as an equal mind when my performance merits it. Until then, please treat me as if I already am aware of things such as the role of govt, etc...you were being patronizing and it offended me and so I spoke bluntly. I wanna be friends. I want assurance that you believe that all the tenets of Objectivism would work on this earth, somewhere, and the implementation is something that you wanna discuss. I'm starry-eyed but I'm not naive. All these years non-Objectivists have been telling me it wouldn't work in the real world and there's gotta be some govt intervention into a nation's economy; I didn't expect to be told that when I wrote on an Objectivist site. For now it's a hypothetical utopia (THAT COULD WORK), so add your obviously good mind to this quest for solutions. We know non-Objectivists (even many small govt Conservative) want tariffs on foreign imports to fix the problem. And we know govt intervention is not the solution. What is? Dream_weaver said ,basically, Galt's Gulch could use its military to eradicate the statist tyrannies and (hope a nation of Rights is established, I presume, to trade with morally), and that demonstrates how serious a matter this is when a dream_weaver who I'm certain engaging morally acceptable wars in a national interest is the scenario of his woven nightmares, but it was a legitimate answer. And as Objectivists, we know that it can be morally justified to initiate a war with a statist tyranny, not to police the world (but the risk of the appearance of that), but to protect our hypothetical utopia's national interest. Let's keep d_w's solution as a last resort to carefully contemplate in context. Please, I'm not wantin to prove whose more of an Objectivist than whom; I will assume that we all know that Objectivism will work in practice....otherwise what's the point? This goes out to everyone: if there's a tenet of Miss Rand's philosophy that you thing is wrong, please say so up front, if it's relevant to the discussion. I'm not implying you, jaskyn, I think I offended you (after you offended me) so you wanted to me look ignorant. If I implied that you're not a hundred percent Objectivist, I'm sorry. Please understand, I've met folks who've told me they're Objectivist while on their way to church. We know Christians can't be Objectivists. That's just one example. Those people will undermine Miss Rand's philosophy by being thought of as speaking for it. You know all this. Cheer up, it's Christmas. We're on the same team. But you're not my coach. I've got a t-shirt that says Senior Member. Smiley face.

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By tainted, I mean the market distortions caused by trading with businesses subsidized by the governments of mixed economies (among other things the economic intervening of governments do to skew the natural machinations of Capitalism). Shall I name them all or aren't they well know by now? Shall I define my uses of the words distortions and skewing or are you ready to stop pretending to answer the question (in your first sentence with your allusion to a government that'll somehow make sure the system remains Laissez-Faire? I believe it can be done. I don't know how yet. "Govt'll handle it" aint a good enough answer for me. How will the govt protect a Laissez-Faire system while citizens import/export to/from nations aided or hindered by their mixed economies (which taint the market)?

Yes, you probably should spend a little more time on defining what you mean by distortions. That's the only way to decide whether anyone deserves to be "protected" from them or not. If the distortions don't consist of initiation of force against the free country's citizens, then there's nothing to protect against. If the "protection" is actually more damaging to the free country's citizens' freedom than the actual distortions, again, they shouldn't exist.

So, what distortions are you talking about? Give an example.

So far, I'm aware of nothing that would justify a LFC government using force against its own citizens (which is the only action any government can ever take, outside of war against a foreign entity), to protect them from "distortions".

The only case in which such an action is justified (in the form of sanctions and other trade barriers), is when there's a physical threat from the other country). The suggestion that a capitalist government should somehow restrict its own citizens' ability to trade abroad, to protect its economy, is yet to be justified.

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Nicky, I never implied that a LFC govt would be justified initiating force on its citizens. Here's an example of international trade distorted an LFC's existence. But first let me say, as you know, LFC is partly defined as no govt intervention into the economy, which allows the natural flow of capitalism to work. Example: Jack, man in an LFC nation, has his intellectual property rights protected for a device he made that takes music and turns it into graphic images that coincide with the emotional responses the person holding the device receives while hearing the music. Millions of people in the LFC wanna buy one. This inventor would've been rich, but a man from Red China stood in line for days just to buy one on the day they went on sale in the LFC nation (for only a hundred bucks.) The commie flew back to China, reverse engineered it, and on the second day everybody from then on bought the exact same thing ( but the Chinese version) for only 20 bucks, in that same LFC nation's store, and all the stores in the LFC nation. The LFC govt knows, as we do, that it'd be wrong to impose a 200$ tariff on the currency-manipulated, imported Chinese version of the device, because of course it's wrong for the LFC govt to intervene in its economy. Jack's life work would've received it's just rewards by the justice of the LFC marketplace, if it wasn't for international trade (which I believe is necessary), so instead of the natural justice of LFC, LFC received a market distortion, a tainting, a skewing, an injustice, because other govts don't honor property rights. Dream weaver said the LFC nation would risk policing the world, and he's so fricken right, it's a dilemma that seems almost unsolvable without policing the world, which I'm certain none of us want. It's mainly an issue of (distortions/tainting, etc.) injustice entering in to the only truly just economic/political system ever devised: LFC. Simply keeping govt out of the market isn't enough. That'd seem libertarian. We're a philosophy, you, I, all of us. Not just a small govt party. LFC would've naturally given Jack his just rewards. That's why it's great. Yeah? Jack invested years of his life and all his money and ended up, not as the rich man, as he should've been, had LFC gone un distorted, but a broke man, because his nation traded with a bunch of unjust commies (with good prices$$$). It's not his neighbors job to pay Jack $100 for a $20 device, as you'd agree. So how does the LFC govt protect future inventors from the same thing happening, without intervening in the import/export business? Justice. I wanna protect the virtue of justice in my hypothetical LFC nation, not just keep govt out of the way. And yeah, it'd be cool if we could do it without policing the world.

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Here's the one solution I've got, thanks to dream_weaver, and neither of us would say it's an easy one: whenever a citizen of a foreign nation steals an LFC nation's citizen's intellectual property, the LFC govt treats it as it would any criminal or civil matter, protected by the LFC nation's property rights (when the foreign govt fails to recognize them, thereby forfeiting that govt's legitimacy). Because as we know, theft is an indirect use of force, justifying retaliation........the other example about the LFC corn grower being put out of business by foreign, subsidized food is trickier. I never ever suggested putting restrictions on capitalism. I acknowledged that at least tariffs was an idea (offered by mixed-economy advocates). An evil idea, but I was trying to get us thinking about solutions and not get hung up on defining terms. We all know what taints/distorts/causes injustices In capitalism. Pick any one that would enter in when an LFC utopia engages in the act of international trade. It'd be great to have a general policy regarding protecting LFC from injustices caused by foreign govts subsidies, currency manipulation, etc., but it looks like it might be way more complicated than that. Any hypothetical example and/or solution is welcome because, imagine a nation of LFC without trading with non-LFC economies, then imagine the tainting of that utopia once you open up for global trade. I want global trade with ways to protect the justice inherent in LFC.

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I might be wrong here but check this out: first let me loosely define LFC as no govt intervention into the economy. 2nd, I'd say that if a neighbor government intervenes into its economy, and the LFC nation trades with those neighbors, then there is now govt intervention into the (once) LFC economy, which has lost the ability to call itself an LFC economy. I could be wrong. I hope so. Or I hope I can figure out a way to make it right. I recall thee Galt's Gulch being a self-sufficient economy and, sadly, Miss Rand died before seeing this high-speed global market, so I don't think she had reason to address the issue. LFC could be preserved if the Gulch didn't get into the import/export business. I know that. I wanna know how it could be preserved if in a newly discovered extra chapter of Atlas, them folks in that Gulch decided to let imports compete, and their exports compete, without losing the justice of natural market forces.

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I'm not a troll. I know that every aspect of Objectivism will work when applied to this world. I wanna hear new ideas on the details of its implementation. Remember, Miss Rand off-handed lay mentioned an idea she didn't necessarily believe was the right solution, about getting govt revenue by insuring business contract for a price while not forcing businessmen to buy the insurance; they'd just not have the civil court system if they're uninsured contract were breached. Didn't you also see that as an example of Miss Rand prompting us Objectivist thinkers to work out all the details of her philosophy's application? I'm not implying I'm an Objectivists spokesman; only Professor Peikoff (& his people) are, but it'd take many thinkers to work out all the details, specializing in the necessary fields, and I'm sure Professor Peikoff would welcome any valid input. I'm not implying I know The Professor personally; I don't. If you think any of my ideas/statements/solutions violate principles, please assume it was a mistake and give me a chance to correct it. And I will afford you the same honor. But if somebody states explicitly that Objectivism works in theory but not in reality, I will consider them a troll and cease discussion with him or her. I wonder what Professor Peikoff's ideas would be regarding protecting the justice inherent in an (as-yet-unfounded) LFC nation trading in the global marketplace.

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A mixed economy is a system with two components controlled and working closely together, government and economy. 

 

In the realm of government, if you view Anarchy with the spectacles of a collectivist, a political scientist, or a mixed system type mentality you see a "system" as though it were man made, designed, purposeful.  By definition a non-system, which true Anarchy is, is not a system, not in the sense of an organisation, collective, cooperating whole, formed purposefully, although it can be analysed as one purely from a scientific or analytic perspective (economists).  Anarchy is the absence of a system of government.

 

"Laissez-Faire" is the absence of a system (imposed, engineered, organized by force) of economy.  Any economy that arises is a natural consequence of the actions of free individuals in a frame work of minimal government which protects them from violation of individual rights. As such Laissez-Faire is not so much a system as the absence of one, specifically the absence of one in the economic realm.

 

In a geography (let us not introduce nationalism) which is under protection of a minarchist Objectivist government, there is no economic "system" to be tainted, only individuals who behave in ways which are either criminal (force, fraud) or not.

 

I do not believe there is anything to taint.

 

 

There would assuredly be individuals who would be benefiting from the artificial and non-efficient mixed economical systems set up in other countries (in the short term), but the vast majority of them would know that they would benefit more in the long run if those mixed systems moved toward no economic controls, and hence would in fact themselves be instruments "tainting" 3rd world countries with Laissez-Faire "encouragement".

 

 

 

 

 

 

 

 

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Very top-down, it all seems. It's not the job of government to protect a citizen from the unjust or immoral or whatever, tariffs of another nation's government. All this talk of nations and governments seems to defeat the purpose of laissez-faire. Individual rights cannot extend off-shore to the economic philosophies elsewhere. Caveat emptor. Morally, each person must be free to make his own judgements and mistakes. It means throwing away any and all concepts of 'government' and tit-for-tat protectionism, as they exist right now.

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Common people, let's agree that a laissez-faire economy requires a political system that protects rights, somewhat close to how it was in the US in the 19th century. The US didn't arise naturally. Blood. Debates. Federalist Papers. Great philosophers risking their fortunes to establish this US system, though no philosopher was nearly as great as OUR FOUNDER. There is a role for govt in laissez faire. A vital one. I know it feels odd to advocate for the establishment of govt policies, when we're probably some of the smallest small govt folks in the world. let's find solutions, and I know top down solutions are always distasteful and hopefully unnecessary. But imagine this hypothetical as a nation at its birth, being founded, and without ever ever ever violating a single Objectivist principle, think of ways the govt can play its proper role in an LFC country trading in the global marketplace. P.S. I shouldn't have used the misleading term, utopia, earlier, when referring to this hypothetical, because it's misleading; we know that LFC can be a jungle of creative destruction and risks without rewards and all that wonderful justice.  

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Look what happened to the U.S.'s almost LFC economy in a couple of centuries. And they had Franklin and Jefferson and Madison thinking about similar issues to the one I posed. They failed. Impressive but tainted from the start. If we don't think about actual ways to apply the Objectivist ideal, not the pragmatic compromise of electing small government Republicans (which is important, for now) who the heck will?

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