Let me add a bit to my previous reply to you; regarding the effects of government regulations, and the value of services.
To simplify things, I’ll focus on just accounting services. All businesses use accountants — whether embedded as employees, or contracted out. I’ve stated the case for these services contributing to wealth creation — however, as a side-effect of government regulation, that is not always the case.
Businesses need accountants to see whether they’re winning or losing. Business strategy requires good accounting data (amongst other things). To the extent that accounting leads to better strategies, it definitely contributes to wealth. If all wealth-creating businesses were free to only use the accounting services they wanted to use (and pay for) — then all of those services would be contributing to wealth creation.
However, a great deal of accounting services are used only to satisfy the requirements of various regulations (taxation; affirmative action, environmental, etc.). Not all of that government-imposed accounting is a dead-weight loss; but much of it is. The dead-weight part does not contribute to wealth creation; and some of it may even destroy wealth.
I absolutely agree with you about the superiority of the free market to any sort of central planning. But let’s not give it more credit than it deserves.
Much free market spending does not generate wealth, notably that performed primarily as a display of wealth. Much of it is about as “productive” as the potlatches of the Northwest Coast Indians, where they piled up massive amounts of goods and burned them to demonstrate their wealth. And of course serves exactly the same purpose.
The superiority of the free market is only a general superiority, not a specific one. Just as evolution works in general, with the “fittest” mostly surviving, but doubtless many a beneficial mutation dying out by chance. So the market destroys many good ideas before they can come to fruit.
Which means the market, like evolution and democracy, is the worst possible way to run things, except of course for all the alternatives. It’s not that the market is particularly efficient, it’s that the other systems are so spectacularly ineffecient.
BTW, an off thought struck me the other day while reading FR. The people who believe most strongly in the free market for the economy, in this country, are often disbelievers in evolution for biology. Which is odd when you consider that the two use essentially identical mechanisms.
Meanwhile, of course, those who believe most strongly in evolution and despise the idea of a God that interferes in the world, are disproportionately opposed to the idea of the free market, wanting humans to use their superior intellect to decide winners and losers, rather than leaving it to “chance.”
Seems to me the creationist/market types are somewhat less illogical here. At least they posit an omniscient divine being to control biology, while the evolution/command economy folks rely on admittedly fallible, and inherently ignorant and corruptible humans to control the economy.
I absolutely agree with you about the superiority of the free market to any sort of central planning. But let’s not give it more credit than it deserves.
Much free market spending does not generate wealth, notably that performed primarily as a display of wealth. Much of it is about as “productive” as the potlatches of the Northwest Coast Indians, where they piled up massive amounts of goods and burned them to demonstrate their wealth. And of course serves exactly the same purpose.
The superiority of the free market is only a general superiority, not a specific one. Just as evolution works in general, with the “fittest” mostly surviving, but doubtless many a beneficial mutation dying out by chance. So the market destroys many good ideas before they can come to fruit.
Which means the market, like evolution and democracy, is the worst possible way to run things, except of course for all the alternatives. It’s not that the market is particularly efficient, it’s that the other systems are so spectacularly ineffecient.
BTW, an odd thought struck me the other day while reading FR. The people who believe most strongly in the free market for the economy, in this country, are often disbelievers in evolution for biology. Which is odd when you consider that the two use essentially identical mechanisms.
Meanwhile, of course, those who believe most strongly in evolution and despise the idea of a God that interferes in the world, are disproportionately opposed to the idea of the free market, wanting humans to use their superior intellect to decide winners and losers, rather than leaving it to “chance.”
Seems to me the creationist/market types are somewhat less illogical here. At least they posit an omniscient divine being to control biology, while the evolution/command economy folks rely on admittedly fallible, and inherently ignorant and corruptible humans to control the economy.