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dimaniac

Free market fascism

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Free market fascism is only sustainable free market system. Free markets are inherently unstable. It's not bad thing in itself. But business cycles create unemployment which can lead to revolution or destruction of capital by government to create demand for excessive human supply(e.g. Great Depression). If being poor and unemployed was a crime then revolutions/destruction of capital wouldn't happen. First country to adopt free market fascism will experience huge economic growth because bourgeoisie will be able to exponentially accumulate capital and replace obsolete human workers with machines without any government intervention to protect proletariat. In the end such economy will reach 90-95% of world GDP. Everyone else will be mere exporters of natural resources because keynesian/socialist/marxist economies won't be able to compete with free market fascism

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Is this supposed to have some sort of contextual point? Or were you just going to make baseless claims, with undefined and ambiguous terms, and spout Marxist/Communist dogma?

Troll elsewhere, please.

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Do you expect us to take any of these claims without supporting reason or evidence of any kind? Do better next time or don't bother. If you are respectful of the intelligence of others in this forum you will be treated in kind.

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What kind of evidence do you want? Great Depression was created by excessive human supply, it's quite obvious. Free markets ensure fastest economic growth. It's obvious too. Free markets can't exist in democratic society since machines replace majority of electorate and majority would vote to destroy capital to survive.

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These arguments are all based on flawed economic thought. Every single one of them is dealt with here:

http://mises.org/

Almost all of the major books/works are available in full for free online there as well.

I suggest you peruse around there first.

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I read some of those books. Austrian/monetarists don't understand that free market capitalism leads to replacement of humans by machines. Wages don't grow in free market capitalism. Humans are obsolete. Goal of economy is to eliminate all jobs

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I read some of those books. Austrian/monetarists don't understand that free market capitalism leads to replacement of humans by machines. Wages don't grow in free market capitalism. Humans are obsolete. Goal of economy is to eliminate all jobs

Dimaniac,

For the time being I am going to eschew calling you a troll and take your post at face value. Please, return that respect.

"Goal of economy is to eliminate all jobs" is a very extreme irrational statement, lacking in context and proof.

We know it isn't the goal to get rid of all jobs in your capitalist dystopia- because there obviously someone doing something to accumulate wealth and that someone is going to spend their wealth somewhere.

Lets start from there.

We won't even touch on what your definition of facism is yet. First we must dispense with your irrational hyperbole so we can find out how you came to your conclusions.

The theory you put forth is held by many first year college students so that you have bought into it and come here to question it I do not hold against you. Just please remember that this is a forum that serves a specific purpose and we take the forum rules you agreed to when you created your account seriously here.

Edited by SapereAude

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I read some of those books. Austrian/monetarists don't understand that free market capitalism leads to replacement of humans by machines. Wages don't grow in free market capitalism. Humans are obsolete. Goal of economy is to eliminate all jobs

“Free market fascism” is a contradiction in terms. To the extent that a market is free, that means free of coercive intervention onto private property owners, and is thus not fascist. To the extent that it is fascist, that means coercive intervention and regulation of natural and original property owners by non-owners, and thus is not free.

What you are suggesting is essentially aristocratic control of the economy by an oligarchy to ensure that their positions of relative status and income in society are not threatened by the progress and dynamic change of the capitalist order. This will not result in growth or exponential capital accumulation, but stagnation, misery, and exploitation.

Here are your essential charges against capitalism:

1. Capitalism leads to replacement of humans by machines.

2. Wages do not grow on the free market.

3. The goal of an economy is to eliminate all jobs.

1 is based on a very old fallacy of the “curse of machinery,” that unemployment is caused by machines. If taken seriously to its logical conclusion, then we should make all machines illegal and thus we will be living in the Garden of Eden, or ban all trucks and cars and have people ship goods by foot, then everyone will be employed and we will be more prosperous. Machines actually serve the purpose to increase productivity of labor, to economize the means required to achieve definite ends, which creates savings that allow for further production and frees up time to concentrate on other things. See Hazlitt Economics in One Lesson, Chapter 7, “The Curse of Machinery”)

2 can be seen directly as false even as a result of 1. The increased productivity of labor by the progressive accumulation of capital actually serves to increased the diminished marginal value product of labor, and this increase wages in itself. The growth of an unhampered market economy results in increasing real wages as purchasing power increases, thus allowing a greater quantity of goods to be bought in the future. (See Hazlitt, Idem. and Mises, below.)

3 is fallacious because it assumes, like 1 and 2, that there is only a certain static amount of work to be done in existence. The goal of an economy is actually to economize, and since human demand is endless and means are scarce, there are always jobs, so long as the world is not transformed into the Garden of Eden. All unemployment on the unhampered market is voluntary because anyone is able to find work at the prevailing wage rate. Institutional unemployment is caused by the initiation of physical force to push wage rates above the free-market level, thus creating a surplus of labor. See Mises, Human Action, Chapter 21, “Work and Wages”

Your other statement, which seems to be that the market process is inherently unstable, and depression is caused by a surplus of labor is thus revealed to be false. The real cause of depressions is the government's manipulation of the money supply by inflationary expansions of credit and coercive manipulation of interest rates. See Rothbard, Man, Economy, and State incl. Power and Market, Chapter 12, “The Economics of Violent Intervention in the Market,” Part 11: Binary Intervention: Inflation and Business Cycles)

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Austrian/monetarists don't understand that free market capitalism leads to replacement of humans by machines.

The premise behind that argument has been dead for decades. I think you are lying that you have read the important works. Both the Austrians as well as others, such as Frederic Bastiat (in the 1800s) exploded this as well.

The fact that you are grouping Austrian's and Monetarists together also shows that you are not well read on free market economics. They are not the same group nor should they ever be grouped together.

I don't know how you handle things where you live, but here when people make claims they usually provide evidence. Your opinion is not automatically fact, no matter how much you would like it to be.

Your understanding of this issue has been restricted by the fact that you have accepted some very common economic fallacies, one of them being the zero-sum fallacy.

Quoted section below is from here: http://www.thefreemanonline.org/columns/do-machines-destroy-jobs/

Yes, machines do destroy jobs. In fact, that’s the purpose of machines, i.e., to do the work formerly done by labor. And if a machine doesn’t replace human labor, the making of that machine has been a waste of scarce resources, including the skilled labor that invented and constructed the machine in the first place.

Usually, however, this relationship between machines and jobs is expressed more softly, e.g., machines decrease the costs of production, thus permitting lower prices to consumers; or machines are helpful to mankind because they can do the boring and repetitive tasks, thus freeing human laborers for the more interesting aspects of production.

In various of his essays and speeches, Frederic Bastiat clearly saw this relationship between machines and jobs. And as usual, after pointing out “what is seen,” he also looked behind popular opinion for “what is not seen.”

“I see some machine replacing 20 or 100 workers,” wrote Bastiat. (“Human versus Mechanical Labor”) But if it’s true, he continued,”that the domain of invention [machines] and that of labor [jobs] cannot expand except at each other’s expense, then it must be in places where there are the most machines—in the [textile districts of England], for example—that one should expect to find the fewest workers.” But there’s where you find many thousands of workers at their new jobs of operating those machines! Bastiat continued:

The mistake made by the opponents of . . . machines is in evaluating them according to their immediate and temporary effects instead of following them out to their general and ultimate consequences.

The immediate effect of an ingenious machine is to make a certain quantity of manual labor superfluous for the attainment of a given result. But its action does not stop there. Precisely because this result is obtained with less effort, its product is made available to the public at a lower price; and the total savings thus realized by all purchasers enables them to satisfy other wants, that is, to encourage manual labor in general to exactly the same extent that it was saved in the particular branch of industry that was recently mechanized. The result is that the level of employment does not fall, even though the quantity of consumers’ goods has increased.

Let us give a concrete example of this whole chain of effects.

Suppose that the French people buy ten million hats at fifteen francs each; this gives the hatmaking industry an income of 150 million francs. Someone invents a machine that permits the sale of hats at ten francs. The income of this industry is reduced to 100 million francs, provided that the demand for hats does not increase. But the other fifty million francs are certainly not for that reason withdrawn from the support of human labor. Since this sum has been saved by the purchasers of hats, it will enable them to satisfy other wants and consequently to spend an equivalent amount for goods and services of every kind. With these five francs saved, John will buy a pair of shoes; James, a book; Jerome, a piece of furniture, etc. Human labor, taken as a whole, will thus continue to be supported to the extent of 150 million francs; but this sum will provide the same number of hats as before, and, in addition, satisfy other needs and wants to the extent of the fifty million francs that the machine will have saved. These additional goods are the net gain that France will have derived from the invention. It is a gratuitous gift, a tribute that man’s genius will have exacted from Nature. We do not deny that in the course of the transformation a certain amount of labor will have been displaced; but we cannot agree that it will have been destroyed or even lessened.

Machines Mean Progress

The beneficial effects of machines are far greater than Bastiat stated—or even imagined in the 1840s in France. One of his examples of how machines increase production without decreasing the number of jobs was the textile industry in England. So I’ll start there too, and dwell briefly on the fantastic outpouring of machines during the Industrial Revolution, and the effect that development had on jobs and the “quality and length of life.”

I’ll begin by citing a few statistics I believe to be correct. And since figures never speak for themselves, but must always be spoken for, I’ll offer my interpretation of their meaning.

Population of England and Wales

Year Population

1600 5 million (rough estimate)

1700 51/2 million (rough estimate)

1750 61/2 million (rough estimate)

1801 9 million (census)

1820 12 million (census)

1831 16 million (census)

In London in 1750, about 70 per cent of all children died before age five.

In London in 1830 (80 years later), about 30 per cent of all children died before age five.

The so-called Industrial Revolution in England had no.....

Edited by CapitalistSwine

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"Goal of economy is to eliminate all jobs" is a very extreme irrational statement, lacking in context and proof.

BTW that's not my phrase, Peter Schiff said it.

We know it isn't the goal to get rid of all jobs in your capitalist dystopia- because there obviously someone doing something to accumulate wealth
Wealth accumulation can be fully automated.

We won't even touch on what your definition of facism is yet.

Well I don't know exact term for society where being poor and unemployed is a crime.

The theory you put forth is held by many first year college students
Really??? Are there discussion boards for free market fascists? I googled it but couldn't find anything

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Peter Schiff

Why is what this guy says relevant? He is not an expert in Austrian economics, he is a CEO of a company.

Well I don't know exact term for society where being poor and unemployed is a crime.

That is not a crime in an Objectivist society.

Wealth accumulation can be fully automated.

Are you going to explain this at all?

You haven't really responded to any of our information, you have just nitpicked things and then continued to not really explain/prove any of your claims.

I will be waiting. Please learn the definition of fascism while you are at it.

Edited by CapitalistSwine

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What you are suggesting is essentially aristocratic control of the economy by an oligarchy to ensure that their positions of relative status and income in society are not threatened by the progress and dynamic change of the capitalist order. This will not result in growth or exponential capital accumulation, but stagnation, misery, and exploitation.

I'm not for oligarchy, small business can compete with big corporation in such system without government intervention. Only when you are poor you don't have any rights to avoid redistribution of income.

1 is based on a very old fallacy of the “curse of machinery,”

Machines can do everything that humans can do therefore EVENTUALLY human labor will be replaced with machines labor and there won't be any jobs.

The real cause of depressions is the government's manipulation of the money supply by inflationary expansions of credit and coercive manipulation of interest rates.
It caused depression of 1921 which was very short. Great Depression was caused by something else (and don't tell me about Rothbard's book he is a liar)

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Dimaniac,

Please review the Forum Rules before posting again. Thank you.

Sorry for grammar, english isn't my first language. I'm not against Objectivism or Libertarianism but it's hard to implement them in real world. Free market fascism can be easily implemented and it is relatively good substitute for true free market economy.

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That is not a crime in an Objectivist society.

Is drunk driving a crime?

Are you going to explain this at all?

Machines can completely replace humans therefore you don't need anybody for capital accumlation this process can be fully automated.

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Great Depression:

http://mises.org/daily/3515

What does drunk driving have to do with being poor and unemployed? Does one not choose to drink before getting behind a vehicle that requires a large amount of cognitive attention? Also consider private roads...this is all I will say on this.

Machines can completely replace humans therefore you don't need anybody for capital accumlation this process can be fully automated.

I should not have to respond to a statement like this so I am not going to. If someone else wants to, go for it.

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Great Depression:

http://mises.org/daily/3515

My explanation of great depression from other forum.

Yes, federal reserve created bubble that popped in 1929. But what Murray Rothbard wrote about Hoover interventionism is wrong. Two examples of government intervention that austrians usually use are fixed wages and trade war. Fixed wages argument refuted here by dsglop http://www.youtube.com/watch?v=tBqjdbLFfGQ

Also Murphy says in that video that wages were fixed because Hoover called to businessmen and asked for it. However in this video

at 15:08 historian David Kennedy says that Hoover called to businesmen in 1921 and it is ended Depression of 1921 while austrians believe that lack of government intervention and free market help US economy get out of this depression. So either Hoover had magic powers and could stop depression of 1921 AND prevent businessmen from lowering wages or free market fixed itself in 1921 AND it fixed itself in first years of Great Depression except that according pure abstract economics those 25% of workers that were unemployed were unnecessary and should have been removed from economy.

2nd argument refuted here http://www.exponentialimprovement.com/cms/smoot.shtml

and here http://www.economics-charts.com/gdp/gdp-1929-2004.html

gdp-1929-2004-semilog.png

exports were only 5% of GDP, trade war couldn't impact US economy.

Government didn't cause Great Depression. Neither did free market. Humans caused Great Depression. Specifically working class. Market worked very well. Economy was completely restructured by 1933. But there was 25% unemployment. Real free-market solution would be to kill those workers(or let them starve to death). Because they can't adapt fast enough. Humans are obsolete. They can't keep up with progress. Even without minimum wage there was no place for them in economy. Free market economy ensures fastest economic growth. But humans are unnecessary for economy. Machines can completely replace human labor. therefore free market doesn't guarantee that there will always be demand for human workers. Economy simply doesn't need any humans.

Austrians believe that Roosevelt was evil, however he was forced to try to save those unnecessary 25% of workers otherwise they would probably destroy system. But Great Depression happened worldwide, many people couldn't find jobs, and capitalists didn't do enough to save them. I believe that's one of major reasons of WWII, technological advancements and capital accumulation lead to millions of workers that economy didn't need and those millions killed each other plus enough capital was destroyed so demand for previously unemployed workers was created again.

What does drunk driving have to do with being poor and unemployed?
Drunk people usually cause car accidents and therefore they are not allowed to drive. Poor people usually cause revolutions or demand redistribution of income.

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Drunk people usually cause car accidents and therefore they are not allowed to drive. Poor people usually cause revolutions or demand redistribution of income.

Tired people usually cause car accidents. Should tired people not be allowed to drive?

18 to 25 year-old males usually cause car accidents. Should they not be allowed to drive?

Preemptively curtailing liberties is a violation of rights, regardless of any risk calculation.

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Tired people usually cause car accidents. Should tired people not be allowed to drive?

18 to 25 year-old males usually cause car accidents. Should they not be allowed to drive?

So why are there laws against drunk driving?

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So why are there laws against drunk driving?

The question should be, "are laws against drunk (or tired or distracted) driving proper?".

The answer to that has been discussed at length on this forum - I suggest you try the search function and find the threads that cover the topic.

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Government didn't cause Great Depression. Neither did free market. Humans caused Great Depression. Specifically working class. Market worked very well. Economy was completely restructured by 1933. But there was 25% unemployment. Real free-market solution would be to kill those workers(or let them starve to death). Because they can't adapt fast enough. Humans are obsolete. They can't keep up with progress. Even without minimum wage there was no place for them in economy. Free market economy ensures fastest economic growth. But humans are unnecessary for economy. Machines can completely replace human labor. therefore free market doesn't guarantee that there will always be demand for human workers. Economy simply doesn't need any humans.

Austrians believe that Roosevelt was evil, however he was forced to try to save those unnecessary 25% of workers otherwise they would probably destroy system. But Great Depression happened worldwide, many people couldn't find jobs, and capitalists didn't do enough to save them. I believe that's one of major reasons of WWII, technological advancements and capital accumulation lead to millions of workers that economy didn't need and those millions killed each other plus enough capital was destroyed so demand for previously unemployed workers was created again.

Wow, So many things wrong in that statement I don't even know were to begin.

!. "Government didn't cause Great Depression. Neither did free market. Humans caused Great Depression. Specifically working class. Market worked very well."

First to say that the market didn't cause the depression and that humans did is rather funny. Who is exactly is the market then?

2. "Market worked very well. Economy was completely restructured by 1933. But there was 25% unemployment."

No, the market was working miserably. In 1929 prices in stocks doubled. The fed rose the interest rates and the market fell by 60%. That's hardly working well. This usually starts a spiral in the economy beginning with one of the following: Deterioration in bank balance sheets/Increased interest rates/stock market decline/Increase in uncertainty. This in turn leads to Adverse selection and moral hazards (Bailouts and government programs) which leads to economic declines which then begins a bank panic then more adverse selection ect...

3. "Economy was completely restructured by 1933. But there was 25% unemployment. Real free-market solution would be to kill those workers(or let them starve to death). Because they can't adapt fast enough. Humans are obsolete. They can't keep up with progress. Even without minimum wage there was no place for them in economy."

No. Because of the "economic restructuring" you mention ie the "New Deal" there was actually less capital investment available to industry. The funny thing is that it was the exact opposite of what you describe. There was a huge reduction in capital spending for factories and machinery.

This is because the government programs lead to what is called crowding out. When the government expands its expenditures it may discourage or crowd out the private sector in the same market. This excesses in government spending can result in low private-sector borrowing and decrease the amount of private investment. This is largely do to the fact that returns on government debt are typically lower than that of private debt. This results in slower economic growth. When the Federal government's fiscal policy increases spending, it must either create a deficit or create a increase of surplus. In both cases expansionary policy has a direct effect upon the bond market.hen Increased government spending increases the deficit or reduces the surplus the Treasury increase its sells of bonds then it would have otherwise. This causes a shift in the bond supply curve to the right.

This creates a rise in the interest rates due to the reduced price in bond this increase in bond interest rate depletes the amount of capital available for private investment. This also creates a demand for dollars thus reducing the supply in the foreign exchange market. The result is a raise in the foreign exchange market. A higher exchange reduces net exports.

This results in the change in the aggregate demand curve. Before the government interference real GDP was at equilibrium by the intersection of AD1 and the short-run aggregate supply curve. If there was no negative impact the government expenditures would have shifted outward to AD2. But the increase is offset by the loss of investment and exports. This creates a aggregate demand curve shift to only AD3. In the short-run this leads to a slight increase to GDP to Y2 but also higher price level at P2.

4. "But humans are unnecessary for economy. Machines can completely replace human labor. therefore free market doesn't guarantee that there will always be demand for human workers. Economy simply doesn't need any humans."

Incorrect. Humans are the economy. Why would a company produce outside of the demand function? If there is less jobs and revenue then output will decline because of the rise of the LM point will be above equilibrium. In other words they would be producing more goods than what is demanded.

This goes back into what economist call the consumption function. Income is an important factor in what determines the amount of goods you will consume.

The Consumption function goes as follows: C=a+(MPCxY^D) Where "a" stands for the autonomous consumer expenditure that is independent of of disposable income and MPC is the marginal propensity to consume. This expresses the change in expenditure with that results in an additional dollar to disposable income.

This brings us to the aggregate demand function. The aggregate demand function is the vertical sum of the consumption fuction line and planned investment spending. This gives the location of were demand for goods produce lies. If a company produces above the equilibrium line it will be saddled with tons of unsold inventory.

So you can see how silly it is to speak of the economy and production independent of humans and demand.

Edited by Rearden_Steel

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If being poor and unemployed was a crime then revolutions/destruction of capital wouldn't happen. First country to adopt free market fascism will experience huge economic growth because bourgeoisie will be able to exponentially accumulate capital and replace obsolete human workers with machines without any government intervention to protect proletariat. In the end such economy will reach 90-95% of world GDP. Everyone else will be mere exporters of natural resources because keynesian/socialist/marxist economies won't be able to compete with free market fascism

That is a very accurate depiction of reality. Being poor and unemployed is not directly a crime, but drug addiction is, all the pieces fit together very well. That "First country" you describe is the US o' A.

Most Objectivists claim we don't live in a true Free Market, nor in Socialism, so basically agree that we live under some sort of Corporatism. Hence, but by the thread's title, I don't see why this post should be taken as inflammatory.

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That is a very accurate depiction of reality. Being poor and unemployed is not directly a crime, but drug addiction is, all the pieces fit together very well. That "First country" you describe is the US o' A.

Wow, I didn't think about that, thanks. It kind of explains why there were laws against drug addicts under Reagan. So you can have democratic society similar to free market fascism in which actions of unemployed that usually precede revolution will become crimes with very long prison sentences.

Edited by dimaniac

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