[uBeR]

OK, "bro," don't get so mad. If you can't even make an intellectual argument without resorting to calling people "douchebags," then perhaps this might say something about your argument. Let's look at it.

You say there are a lot of different views, schools, or thoughts in economics. This is true. But I never said there wasn't. What I said was that externalities (or whatever euphemism you wish to use) exist, along with other forms of market failure, which is indicative of the inefficiency of markets, in particular free markets. This is according to neoclassical economics (which both laissez-faire and Keynesian economics rely on). You say I should look at Austrian economics. I say no I shouldn't.

I've read work by Austrians. It's usually all garbage, which is the reason why Austrian economics is not mainstream, is considered heterodoxal, and why no one takes them seriously anymore. There's a reason for this, namely that it's patently off-base. What's the Austrian response to externalities anyway (for now ignoring other obvious causes of market failure)? Rothbard says they don't really exist, because prices in the market reflect precisely what everyone wants. Is it true? Of course it's not. Maybe we could say externalities don't exist when all market participants are perfectly rational, perfectly informed, and experience no transactions costs. Nothing comes close to reflecting this. They also say Pigouvian taxes are wrong because they don't rely on price mechanisms (and current market prices already reflect exactly what everyone wants), so it doesn't reflect what people want because it's just big bad government imposing its will on us pawns. Well, that's not true when the Pigouvian tax is implemented through democratic means, for example, representing the will of the people.

So, anyway, what was my argument? That externalities exist and they represent the inefficiency of markets, particularly free markets. Your response? Yes, they exist! Well then. That settles the issue. You say it's a problem of transactions costs. OK, sure. So what? The result is the same. Inefficient markets. Call it what you want, but you're going to get the same thing.

In telling me to explain the problems of economic planning and calculation, you create a grave (but false) dichotomy between free markets and planned markets (in other words, laissez-faire capitalism or state capitalism). Of course, it doesn't take a genius to figure out the absurdity of such a dichotomy. It should be clear that just because I think free markets are inefficiency that I automatically support state capitalism Ã* la the USSR.

Also, your suggestion that I was somehow calling the United States a free market is totally off-base. Your entire tirade about the unfree nature of Americans is duly noted, but completely irrelevant. I'm not judging free markets based on the U.S. or any other country. The U.S. is not a free market, and the closest things we have reflecting free markets are Third World countries (which is for a reason) who have its doctrine rammed down their throats. But that doesn't mean you can't talk about free markets. Nothing I've said here depends on the U.S. as a model. We can talk about free markets despite the U.S. not being one. Neoclassical economics tells us exactly what I've been saying. Externalities, including those resulting from transactions costs, exist and they are Pareto inefficient--especially so in unregulated, free markets (even if they don't really exist anywhere). In fact, the less measures there are to prevent externalities (like pollution standards), i.e. the freer the market, the more prevalent externalities are likely to be. The "market forces" you laud are the very source of economic inefficiency.

As for the other thread, you'll have to excuse my low interest in your nonsensical psychobabble, as I'm currently moving and don't have the time or energy to entertain all of your silly notions at the moment.