402: The Utopia of the Free Market - Aristotle's ideas

Ivan Boesky famously defended greed in a May 18, 1986, commencement address at the UC Berkeley's School of Business Administration, 

in which he said, "Greed is all right, by the way. I want you to know that. I think greed is healthy. You can be greedy and still feel good about yourself". 

This speech inspired the 1987 film Wall Street, Shortly after, the Feds had busted him for insider trading. Boesky received a prison sentence of 3.5 years and was fined US$100 million.

Maybe greed isn't advisable at all. Medieval theologian Thomas Aquinas (1225 - 1274) said of Greed: "it is a sin directly against one's neighbor,  

since one man cannot over-abound in external riches, without another man lacking them... it is a sin against God, just as all mortal sins, inasmuch as man contemns things eternal for the sake of temporal things."

So, the idea is that man is destined to focus on eternal, which means spiritual things and not on material and temporary things.

You could define greed as the inordinate desire to possess wealth, goods, or objects of abstract value with the intention to keep it for one's self, far beyond the dictates of basic survival and comfort. 

Not a dictate of basic survival and yet so deeply rooted in our system. The more you think about it the more fascinating it becomes. What is the essence of greed?

2300 years ago already Aristotle had discovered the existence of greed. He was the first one, who explicitly condemned it.

According to Aristotle in the first place people strive for a good and virtuous life. The establishment of a state must therefore be such that it enables people to achieve this ultimate goal.

On the one hand there was the 'oikonomia', the managing of a household, but it can never produce everything the household needs.

Therefore on the other hand there was the "chremastike", the acquisition of property through sale or exchange, which is the main ingredient of our modern economy.

Aristotle wasn't  really happy about it. He says in his "Ethica': "We are only forced to choose chremastike. Wealth is clearly not the good we seek: it is a commodity, a means to something else."

The situation is thus: you have a commodity, which you interchange for money, so that you can buy another commodity later.

But then greed kicks in. Money is no longer a means to buy another commodity. Now you turn the tables: you first have money with which you buy a commodity, so that you can sell it for twice as much money elsewhere. That is what we call "making money"

Marx went a step further. We'll get to him later. He said, the commodity itself is not what creates the profit. It is the labor power of the workers, that produces the big profit.

Then you get this: You spend as less as possible on the labor power of the workers who produce whatever product and then you sell your product for ten times more than you spend on the labor power.

For Aristotle barter was the natural way of exchanging goods among people to come to redistribution of goods, so that everyone could strive for a good and virtuous life.

This means that there are other values in life more important than accumulation of great wealth, of money.

Therefore in the eyes of Aristotle making money with money was even the most unnatural thing to do. 

I think, that it was about 2300 years ago that we already were warned for the Utopia of the free market.

The Discussion

[13:22] herman Bergson: Thank you.....

[13:22] herman Bergson: The floor is yours... ㋡

[13:22] Merlin (merlin.saxondale): I dont see how barter makes any difference to greed

[13:22] herman Bergson: If you have any questions or remarks

[13:22] Merlin (merlin.saxondale): For example gold could also play a part in bartering, and that is equivalent to money

[13:23] Gemma Allen (gemma.cleanslate): i want to know how aristotle ate?? did his students feed him?

[13:23] Bejiita Imako: gold also have a true value compared to money

[13:23] herman Bergson: to barter you have add the concept of the JUST PRICE , Merlin...

[13:23] Debbie Dee (framdor): It is the idea that money makes money, but money = exchange commodity for goods

[13:23] Bejiita Imako: cause its a valuable material while money is just paper

[13:23] Bejiita Imako: or not even that

[13:23] Bejiita Imako: only 1 and 0 in a computer

[13:24] Merlin (merlin.saxondale): but money is a form of barter which allows finer tuning

[13:24] Debbie Dee (framdor): Money tends to flow into the hands of a few, unfairly.

[13:24] herman Bergson: Yes Merlin when it is not used to make profits but works with the just price

[13:24] Merlin (merlin.saxondale): if you trade two sheep for one cow they will not have equal values

[13:25] Bejiita Imako: the main prob with greed is clear however, yes a few wanting more and more by "sucking out" the others '

[13:25] herman Bergson: I don't know....depends on the needs involved...

[13:25] Lizzy Pleides: greed often leads to dishonesty

[13:25] herman Bergson: When I need milk and I have many sheeps ...

[13:25] Bejiita Imako: just because they think that make them more valuable and the rest is just worthless to them

[13:25] Bejiita Imako: but a life cant be measured in money

[13:26] Bejiita Imako: but they seem to think that

[13:26] Bejiita Imako: and thats really sad

[13:26] herman Bergson: Well Bejiita, I have heard of some institution that really calculated the price of a human life...

[13:26] Merlin (merlin.saxondale): yes herman, we do it now

[13:27] Merlin (merlin.saxondale): The cost of road safety etc

[13:27] Fred123 Aiten: how do you determine the just price of a commodity?

[13:27] Bejiita Imako: eeh but is that even possible, how can a life have a price?

[13:27] Merlin (merlin.saxondale): Medical treatment too

[13:27] Celtos (firelight7): i think behind greed is often fear of mortality

[13:27] herman Bergson: A difficult question Fred, but one feature can be the labor put into creating the commodity

[13:27] Bejiita Imako: your value depends on who you are as person , if your nice and so id say you have a higher walye then the ones that are bad

[13:27] Debbie Dee (framdor): I think greed is promoted through advertising....

[13:28] Bejiita Imako: at least really bad

[13:28] Bejiita Imako: like the mass murderer on norway Brevik

[13:28] herman Bergson: Yes it is Debbie....

[13:28] Bejiita Imako: hes a monster not a person

[13:28] Bejiita Imako: was shocked from what he said on the trials

[13:28] herman Bergson: All advertizments instruct us t "you must have this or that"

[13:28] Merlin (merlin.saxondale): I think I missed something

[13:28] Bejiita Imako: Brevik is the coldest person ever in modern times

[13:29] herman Bergson: Stick to the subject Bejiita...

[13:29] Debbie Dee (framdor): Advertising is also full of lies, that undermine our moral values - eg eat this powder and get thin

[13:29] .: Beertje :. (beertje.beaumont): advertiser create a need..and we believe them (sometimes)

[13:29] WAINSCOT reports: camilla Csak is on your land now!

[13:29] herman Bergson: I still do't know how to explain greed....

[13:30] Fred123 Aiten: if I aqquire lots of money but live a very basic life am I greedy?

[13:30] herman Bergson: Yes Beertje it can be induced from the outside....

[13:30] Bejiita Imako: hmm greed is tricky subject

[13:30] Debbie Dee (framdor): especially greedy ;)

[13:30] herman Bergson: but also from the inside....

[13:30] herman Bergson: people who never are content with what they have...

[13:30] Bejiita Imako: but the basic is wanting more and more and not willing to share it with others

[13:30] .: Beertje :. (beertje.beaumont): true

[13:30] Bejiita Imako: thats greed to me

[13:31] .: Beertje :. (beertje.beaumont): people want moere and more..even if they have enough to live

[13:31] herman Bergson: question only is..WHY do we behave like that....

[13:31] Bejiita Imako: yes and even if they cant spend it

[13:31] Debbie Dee (framdor): Greed is often disguised as progress....

[13:31] .: Beertje :. (beertje.beaumont): i think it's fear

[13:31] herman Bergson: I mean....when you earn 5 million dollar a year.....

[13:31] .: Beertje :. (beertje.beaumont): fear for poverty

[13:31] Merlin (merlin.saxondale): Hmm this is all interesting stuff

[13:31] Lizzy Pleides: people who can't share will never be happy

[13:31] Celtos (firelight7): could we compare greed to a hunting instinct?

[13:31] Bejiita Imako: money is simply a status symbol, as i said they think they  are more valuable then others just because they are millionaires

[13:31] herman Bergson: next job you expect to earn at least 8 million

[13:31] Annie Brightstar (anniebrightstar): If I baked a cake Herman, and divided it into 10 and you took 3 slices, ... that's greedy

[13:31] Bejiita Imako: money

[13:32] Merlin (merlin.saxondale): lol Annie

[13:32] .: Beertje :. (beertje.beaumont): no it means your cake is superb Annie:)

[13:32] Bejiita Imako: hehe

[13:32] herman Bergson: Depends on the number of guests Annie...

[13:32] Bejiita Imako: ㋡

[13:32] Annie Brightstar (anniebrightstar): It was for here, now its 11

[13:32] herman Bergson: It also could mean that your cake is so delicious that I cant resist taking three slices

[13:32] Annie Brightstar (anniebrightstar): exactly

[13:32] Bejiita Imako: ㋡

[13:32] Annie Brightstar (anniebrightstar): so it is in life

[13:32] Bejiita Imako: mmm loves cake

[13:32] Bejiita Imako: yummy

[13:32] Bejiita Imako: ㋡

[13:32] Annie Brightstar (anniebrightstar): You want 3 houses

[13:33] Kime Babenco: Hello everyone

[13:33] Annie Brightstar (anniebrightstar): Hi Kime

[13:33] Bejiita Imako: hi Kime

[13:33] .: Beertje :. (beertje.beaumont): I only want diamonds..grins...

[13:33] herman Bergson: I can t imagine myself wanting three houses...

[13:33] Merlin (merlin.saxondale): Hi Kime, I think you missed most of it

[13:33] Kime Babenco: I am sorry :-(

[13:33] Bejiita Imako: yes what to do with 3 houses? or 20 luxyry cars

[13:34] Bejiita Imako: some have even more

[13:34] Lizzy Pleides: 2 houses are enough, 1 in rl 1 in sl

[13:34] Annie Brightstar (anniebrightstar): or 3 slices of cake?

[13:34] .: Beertje :. (beertje.beaumont): lol Lizzy

[13:34] Annie Brightstar (anniebrightstar): its all the same

[13:34] Bejiita Imako: hehe

[13:34] Bejiita Imako: yes

[13:34] Annie Brightstar (anniebrightstar): cake , houses , cars

[13:34] herman Bergson: Yes Lizzy !

[13:34] Bejiita Imako: i use to say dont buy more then you need

[13:34] herman Bergson: Well...you know of those rich stars who have 15 cars....!

[13:34] herman Bergson: or more

[13:34] Bejiita Imako: that you have use of

[13:35] Bejiita Imako: yes thats insane

[13:35] Bejiita Imako: 25 cars?

[13:35] .: Beertje :. (beertje.beaumont): just a tool to got to A and B

[13:35] herman Bergson: I still dont understand greed

[13:35] Bejiita Imako: what to do with all those?

[13:35] Fred123 Aiten: If it is wrong to make lots of money where is the incentive to work hard?

[13:35] Lizzy Pleides: 1 ferrari and 1 rolls royce, .... we need that for several uses

[13:36] Gemma Allen (gemma.cleanslate): we all have had greed when we were little kids

[13:36] Gemma Allen (gemma.cleanslate): wanted all the candy

[13:36] Gemma Allen (gemma.cleanslate): all the toys

[13:36] Bejiita Imako: its not wrong but the wrong thing is making use of others and not willing to share some, a few in the world have sort of 90 % of the worlds money

[13:36] Bejiita Imako: thats not fair

[13:36] herman Bergson: Yet greed , or the drive of wanting more and more is the cause of our problems today

[13:36] Gemma Allen (gemma.cleanslate): that is greed

[13:36] Debbie Dee (framdor): Fred, we should work hard on our communal happiness, not on owning as much as possible

[13:36] Bejiita Imako: yes

[13:36] Bejiita Imako: true

[13:37] herman Bergson: Maybe there is a connection between increased individualism in Western culture and greed....

[13:37] Gemma Allen (gemma.cleanslate): hope not fred

[13:37] herman Bergson: the liberal idea of everyone for himself...

[13:38] herman Bergson: No fred keep it ㋡

[13:38] Kime Babenco: If you earn it everyday? Or every month ? Or ....

[13:38] Gemma Allen (gemma.cleanslate): ♥ LOL ♥

[13:38] herman Bergson: Just pay your taxes

[13:38] Merlin (merlin.saxondale): Herman I still think your use of the word Liberal differs from mine

[13:38] Fred123 Aiten: surely if spend my $1000 then I am halping the community by keeping people in their jobs

[13:38] Gemma Allen (gemma.cleanslate): you can send me some

[13:38] Gemma Allen (gemma.cleanslate): Yes-ah!

[13:38] herman Bergson: Yes Merlin we have to look into that sometime...

[13:38] Merlin (merlin.saxondale): :)

[13:39] herman Bergson: Well...if you have a dull moment.....

[13:39] herman Bergson: one day..

[13:39] herman Bergson: take your time to find out what Greed is....

[13:39] Celtos (firelight7): calvinism had a strong influence on the way people think in the west,people who are wealthy are loved by god

[13:39] Bejiita Imako: ah

[13:40] Debbie Dee (framdor): the problem is that if you are earning too much, someone is getting screwed....

[13:40] herman Bergson: All religions reject greed...

[13:40] Fred123 Aiten: how do you define what is too much?

[13:40] herman Bergson: that is what Thomas Aquinas already said Debbie...you are right

[13:40] Kime Babenco: But all religion temples are paved with gold...

[13:40] Celtos (firelight7): well its a pervesion of religion

[13:41] Debbie Dee (framdor): You know if it is too much fred ;)

[13:41] herman Bergson: too much what is more than you need for survival Fred

[13:41] Gemma Allen (gemma.cleanslate): i beg to differ .. there are some here in the states that actually say it is god's with if you are getting it all ...

[13:41] Gemma Allen (gemma.cleanslate): religions

[13:41] Bejiita Imako: religions have their extremists that read everything wrong

[13:41] Gemma Allen (gemma.cleanslate): Yes-ah!

[13:41] Bejiita Imako: so some maybe things cause I am rich god loves me

[13:41] Fred123 Aiten: so we should all earn exactly the same amount of money?

[13:41] herman Bergson: Then this is a very unjust God, I would say...

[13:41] Bejiita Imako: look at islam the koran say nothing about blowing people up and repressing women

[13:41] Celtos (firelight7): what about the cruisades, they were greedy

[13:41] Gemma Allen (gemma.cleanslate): you are rich because god wants you to be

[13:42] Gemma Allen (gemma.cleanslate): Yes-ah!

[13:42] Debbie Dee (framdor): No, we should all work to maximise the happiness of the community

[13:42] Bejiita Imako: same there they get everything wrong with miserable results

[13:42] Bejiita Imako: happiness is good

[13:42] Bejiita Imako: ㋡

[13:42] Kime Babenco: God's only luck is he(or she) doesn't exist

[13:42] herman Bergson: Yes Debbie...and that is based on the social feeling of solidarity

[13:43] Debbie Dee (framdor): Thank you herman ;)

[13:43] herman Bergson: And today's neoliberalism is just breaking down social solidarity

[13:43] Debbie Dee (framdor): When god made white man she was only joking

[13:43] herman Bergson: With Ayn Rand as the extreme example

[13:44] Bejiita Imako: yes

[13:44] herman Bergson: ok...greed versus solidarity.....the global problem!

[13:44] Gemma Allen (gemma.cleanslate): ;-)

[13:45] Bejiita Imako: everything in the basic wellfare system like hospital scool and transport get in the hands of greedy private companies

[13:45] Bejiita Imako: not a good thing

[13:45] Debbie Dee (framdor): Solidarity is going to become more important as the energy crisis deepens

[13:45] herman Bergson: yes and in the situation of the deprletion of recsources of this earth

[13:45] Bejiita Imako: ah

[13:46] Debbie Dee (framdor): Especially with 7 Billion peeople on the planet

[13:46] Kime Babenco: Things in life and the world ... behave like water... It goes from where there is only a little.... towards the ocean, where is already plenty of it...

[13:46] Bejiita Imako: the prob is everyone buys new and new all time cause a better model is out

[13:46] Bejiita Imako: the comercials screal

[13:46] Bejiita Imako: scream

[13:46] Bejiita Imako: BUY BUY BUY!

[13:46] Bejiita Imako: and working stuff is thrown at the scrap heap

[13:46] Bejiita Imako: a true waste of resources

[13:47] Gemma Allen (gemma.cleanslate): speaking of scream the painting sold yesterday for 120 million DOLLARS

[13:47] Debbie Dee (framdor): yes . We still act as though there are no resource limits

[13:47] Fred123 Aiten: but miliions of people survive by supplying goods to the greedy

[13:47] Bejiita Imako: and also quality is sometime so low it brakes after a a while so they can sell even more

[13:47] Bejiita Imako: thats also waste

[13:47] herman Bergson: Yet, keep an eye open for the counter movements....liek Occupy, Greenpeace,etc....

[13:47] Annie Brightstar (anniebrightstar): How do you share fairly amongst 7 Billion, Herman?

[13:48] Fred123 Aiten: if the greedy stopped buying stuff how would these people earn money for food

[13:48] Merlin (merlin.saxondale): Agrees with Annie

[13:48] Lizzy Pleides: we have enough food for all, its a question of distribution

[13:48] herman Bergson: To begin with to take care that everybody has food ans shelter

[13:48] Bejiita Imako: WOW gemma thats extreme

[13:48] Gemma Allen (gemma.cleanslate): yep

[13:48] Bejiita Imako: hehe heard aboyut the auction in the news before

[13:48] Gemma Allen (gemma.cleanslate): anonymous buyer

[13:49] Annie Brightstar (anniebrightstar): The distribution of wealth between rich and poor countries is outrageous

[13:49] Debbie Dee (framdor): Weak argument, fred. We must be able to come up with a better solution than increasing the burn rate, and trickling the ashes down to the poor

[13:49] Bejiita Imako: indeed we need to share all resources more equal

[13:49] Gemma Allen (gemma.cleanslate): wh has lots more i bet!!!!!!!!

[13:49] Bejiita Imako: thats a must

[13:49] Bejiita Imako: the prob is the greediness prevents that because " And what do i get for doing that"

[13:49] Annie Brightstar (anniebrightstar): Number of motor cars per 1000 of population

[13:49] Annie Brightstar (anniebrightstar): 800 in USA

[13:49] Bejiita Imako: thats how people think

[13:49] Annie Brightstar (anniebrightstar): 550 in Europe

[13:49] Bejiita Imako: they want something for everything they do

[13:50] Annie Brightstar (anniebrightstar): 0.8 in China

[13:50] Kime Babenco: Would like to have such a paonting in your house ? (at first from how it looks, and secondly because the price of it ?)

[13:50] Debbie Dee (framdor): I'd store it in the attic...lol

[13:50] herman Bergson: since World War II you see a remarkable process....

[13:50] Gemma Allen (gemma.cleanslate): hopeully it i perhaps for a new museum

[13:50] Bejiita Imako: hmm don't know the scream is a well known painting for sure but its just a painting even if its the original

[13:50] herman Bergson: just after the war people had no car or vacation abroud...

[13:51] Bejiita Imako: no art expert at all

[13:51] Bejiita Imako: but like art if looks good

[13:51] Bejiita Imako: ㋡

[13:51] herman Bergson: with the increase of wealth...a vacation abroad became "normal'

[13:51] herman Bergson: then...even with a low income...a car became normal...

[13:51] Kime Babenco: Depends on where you live and what is abroad...!

[13:51] herman Bergson: time and again we go a step further...

[13:52] .: Beertje :. (beertje.beaumont): now they ask were i'm going on vacation..and they look very surprised when I say I stay in my own country..that's not normal anymore

[13:52] herman Bergson: it is a peculiar process....

[13:52] herman Bergson: Yes Beertje....

[13:52] herman Bergson: Like young graduates.....

[13:52] Bejiita Imako: today everyone in sweden goes to thailand now and then it seems

[13:52] Merlin (merlin.saxondale): I like England and stay here usually

[13:53] herman Bergson: the first have to make a trip to thailand, Laos, Cambodja etc...

[13:53] Lizzy Pleides: netherland is a small country

[13:53] Celtos (firelight7): i live in greece,hehe

[13:53] .: Beertje :. (beertje.beaumont): but a beautifull one..

[13:53] herman Bergson: I once had a graduate who got a job offered...

[13:53] Bejiita Imako: i think turkey was far enough, cant sit on a plane for eternity just to get somewheere

[13:53] Annie Brightstar (anniebrightstar): But people from Cambodia don't take annual holidays in Europe

[13:53] Lizzy Pleides: yesss:-))

[13:53] Bejiita Imako: and Turkey was nice for sure

[13:53] Bejiita Imako: ㋡

[13:53] herman Bergson: He didnt accept it because he was entitlted to a vacation first he said

[13:53] Lizzy Pleides: <= loves cheese and maatjes :-))

[13:53] Gemma Allen (gemma.cleanslate): this country is so big it is like a foreign vacation to go to the west cppast

[13:54] .: Beertje :. (beertje.beaumont): lol Lizzy...cheese and maatjes..

[13:54] Gemma Allen (gemma.cleanslate): and costs as much

[13:54] Kime Babenco: A luxury problem ...

[13:54] herman Bergson: Well..I geuss we all are focused on greed now enough ^_^

[13:54] Debbie Dee (framdor): I want some more...

[13:54] Gemma Allen (gemma.cleanslate): ♥ LOL ♥

[13:54] Bejiita Imako: MORE AND MORE AND MORE

[13:55] Bejiita Imako: lol

[13:55] herman Bergson: So may I thank you for you for the nice discussion and your participation

[13:55] .: Beertje :. (beertje.beaumont): aren't we all greedy??look in the supermarket..what a choice wehave!

[13:55] Annie Brightstar (anniebrightstar): Should not the people of Cambodia, and Thailand not be entitles to the same?

[13:55] Bejiita Imako: ㋡

[13:55] Gemma Allen (gemma.cleanslate): ♥ Thank Youuuuuuuuuu!! ♥

[13:55] Annie Brightstar (anniebrightstar): entitled

[13:55] herman Bergson: You'll get More indeed Bejiita

[13:55] Lizzy Pleides: Thank youu!

[13:55] Bejiita Imako: hehe

[13:55] Bejiita Imako: thats good

[13:55] herman Bergson: Next lecture will be on Thomas More and his utopia

[13:55] Bejiita Imako: cause this is interesting

[13:55] Bejiita Imako: ㋡

[13:55] Debbie Dee (framdor): thanks herman....

[13:55] herman Bergson: Class dismissed

[13:55] herman Bergson: thank you all

[13:56] Celtos (firelight7): Thank you! :)

[13:56] Fred123 Aiten: many thanks Herman

[13:56] Bejiita Imako: ok co soon again all

[13:56] Bejiita Imako: ㋡

[13:56] Kime Babenco: The only thing that nultiples when you share it is happiness

[13:56] Debbie Dee (framdor): that was stimulating...

[13:56] Bejiita Imako: thats true

[13:56] Annie Brightstar (anniebrightstar): hmmm

[13:56] Bejiita Imako: ㋡

[13:56] Kime Babenco: multiplies*

[13:57] herman Bergson: smiles..

[13:57] herman Bergson: you expect more...?? ㋡

[13:58] herman Bergson: OK..next Tuesday ^_^

[13:58] Kime Babenco: OK

[13:58] Bejiita Imako: cu then ㋡

[13:58] Bejiita Imako: hugs all

[13:58] Kime Babenco: Sure

[13:58] Fred123 Aiten: bye everyone

[13:58] Kime Babenco: Sorry I missed last Tuesday

[13:58] Debbie Dee (framdor): Bye kime

[13:58] herman Bergson: Can happenKime

[13:59] Lizzy Pleides: good byee everybody

[13:59] Kime Babenco: Bye everyone... until soon

[13:59] herman Bergson: Bye Lizzy ㋡

[13:59] Annie Brightstar (anniebrightstar): Bye Lizzy

[13:59] Kime Babenco: again

[13:59] .: Beertje :. (beertje.beaumont): thank you Herman..it was very interesting:)

[13:59] herman Bergson: thank you Beertje

[14:00] herman Bergson: you're welcome

[14:00] Celtos (firelight7): bye everybody

[14:00] herman Bergson: Bye Celtos

[14:00] Debbie Dee (framdor): Bye Herman ;) Thank you for a great lecture

[14:00] Merlin (merlin.saxondale): bye everyon3e

[14:00] herman Bergson: Bye Debbie ㋡

[14:01] Annie Brightstar (anniebrightstar): Good bye Herman

401: The Utopia of the Free Market - The Birth of the Free Market

We live in a market society. You could think "Oh well, nothing special about that. Haven't there been markets all the time?"

Of course, the answer is "yes'. Exchanging and trading goods is of all ages.

Both mammoth hunters of the Russian steppes and the Cro-Magnon hunters in CentralFrance were found to have shells from the Mediterranean sea that they should have acquired through trade.

We 'll find all through history, from the Ancient Greek  till the 16 century examples of trade and markets. Economy in those days looks like to have a market structure.

But there is a fundamental difference between these traditional markets and the market society we live in today.

The markets in antiquity were not the means for communities in those days to solve their fundamental economic problems.

The local market was based mainly on barter,  mutual exchange of good. Money played hardly a roll there.  The barter was embedded in  reciprocity relations between people who knew each other.

Such markets were only complementary to the other economic activities in a subsistence economy and in that sense not the precursors of our market society.

It will be clear that the Church, who dominated life in the Middle Ages, was suspicious about trade and market.

The profession of merchant was closely related to greed and lust, which were two of the Deadly Sins. Therefore merchants were in really low regard. Clergy and nobility looked down on merchants.

In the 18th century there still was a law in France  that declared that every noble person who wanted to become a merchant  had to abandon his title.

From  a philosophical perspective you could say that economic thinking in those days was dominated by the concept of "the just price" of a product.

Finding its origin in the "Ethica" of Aristotle  (384 BC – 322 BC) through Thomas Aquinas (1225 – 1274) this concept became even part of religious thought.

"If someone would be greatly helped by something belonging to someone else, and the seller not similarly harmed by losing it, the seller must not sell for a higher price: 

because the usefulness that goes to the buyer comes not from the seller, but from the buyer's needy condition." — Thomas Aquinas, Summa Theologiae, 

This is really an amazing anti - market statement. , where our market is controlled by a pricing based on supply and demand and making profit.

When in the 17th century Europe developed more and more stronger national states, there also grew what you could call national markets.

The government tried to control the national economy in those days. Mercantilism, as it was called, was rejected by Britain and France by the mid-19th century. 

The British Empire embraced free-trade and used its power as the financial center of the world to promote the same.

When Clobert (1665–1683), Minister of Finances in France asked the Silk merchants of Lyon what he could do to increase their production, they answered "Laissez faire!"

In other words, mind your own business, cancel all your rules and regulations that restrict trade etc. Let the market be the truth. 

The idea of the just price was slowly replaced by the idea of the market price. When by eliminating "unnatural" government intervention the free market you let take its course,  there will spontaneously emerge the truth.

And thus we discovered the Utopia of the Free Market.

The Discussion

[13:21] herman Bergson: Thank you ㋡

[13:22] herman Bergson: If you have any questions or remarks...the floor is yours

[13:22] Debbie Dee: and the truth shall set us free?

[13:22] Mick Nerido: how does lending money fit into this?

[13:23] herman Bergson: Well..that is a complex matter

[13:23] herman Bergson: first of all it has to do with early use of money....

[13:23] herman Bergson: I'll discuss that in the next lecture....

[13:23] Debbie Dee: How did we miss the fact that the strong get rich, and the poor get screwed in this utopian ideal?

[13:24] herman Bergson: but the point is....

[13:24] herman Bergson: I'll come to that Debbie..

[13:24] herman Bergson: How was money used.....

[13:24] herman Bergson: in an economy based on interchange of goods and services....

[13:25] herman Bergson: the basic Idea is that I need a pair of shoes.....but not right now....soon....

[13:25] herman Bergson: but the other fellow wants my grain....

[13:25] herman Bergson: now

[13:26] herman Bergson: The next step is that you can buy shoes for 10 shells... for instance...

[13:26] herman Bergson: then we have to bargain how much grain the other gets for 10 shells....sothat I later can buy shoes

[13:27] herman Bergson: Then the next step.....

[13:27] herman Bergson: the shells symbol for a good become a goal in themselves...

[13:27] herman Bergson: And here we come to Mick's question...

[13:28] herman Bergson: Mick needs shoes, but has nothing to offer in return....

[13:28] herman Bergson: I have 10 shells and offer then to Mick...

[13:28] herman Bergson: In return he must give me 12 shells later.....for my helping out him now

[13:29] Bejiita Imako: and so an idea of the banks was born

[13:29] herman Bergson: Believe me...this is a tricky story which we'll discuss next this day too

[13:29] Bejiita Imako: the

[13:29] herman Bergson: Yes something like that bejiita......

[13:30] herman Bergson: and all based on greed.....

[13:30] Mick Nerido: wasn't charging interest forbidden by the Church?

[13:30] Bejiita Imako: thats exactly the principle the banks use

[13:30] herman Bergson: Yes Mick as it is still by the Islam if I am not mistaken

[13:30] herman Bergson: that is the point....

[13:30] Fred123 Aiten: are you saying that paying interest is bad

[13:30] herman Bergson: Next lecture I'll discuss the birth of greed with you...

[13:31] herman Bergson: no Fred

[13:31] Mick Nerido: Only Jews in Europe could charge interest...

[13:31] herman Bergson: I dont know whether it is good or bad....

[13:31] herman Bergson: It is just part of the economic system.....making money with money.....

[13:31] Fred123 Aiten: assuming there is inflation there has to be interest

[13:32] Debbie Dee: interest is inflationary...

[13:32] Mick Nerido: perhaps interest causes inflation

[13:32] herman Bergson: I am not an economist......

[13:32] Bejiita Imako: ah

[13:33] herman Bergson: I don't even know how inflation comes in to being...

[13:33] herman Bergson: unless it is caused by people asking more money for goods and services out of greed

[13:33] Fred123 Aiten: supply & demand, as demand increases so do prices

[13:34] Bejiita Imako: and then payouts go up and so forth and the money loose their value

[13:34] herman Bergson: that happens,,,yes.....but is that a law of nature???

[13:34] Bejiita Imako: guess thats part of how it works

[13:34] herman Bergson: It is indeed ㋡

[13:34] herman Bergson: And we are tied to it by hands and feet

[13:35] herman Bergson: It is an amazing phenomenon...this financial world

[13:35] Fred123 Aiten: so there is a fixed price for everything so everyone makes the same profit

[13:35] Debbie Dee: In Zeitgeist - addendum - a movie about the banking system

[13:35] Fred123 Aiten: that reminds me of communism

[13:35] herman Bergson: Well in Atlas Shrugged by Ayn Rand they even had a funnier solution....

[13:36] Debbie Dee: they argue that for every loan, after payback the shortfall is the interest

[13:36] herman Bergson: What is the shortfall Debbie?

[13:36] Debbie Dee: so each loan creates a debt, that is not covered by increased production - causing inflation

[13:36] Debbie Dee: well, you borrow 100$, pay back 110

[13:37] herman Bergson: I see, yes, that sounds logical

[13:37] Bejiita Imako: ah

[13:37] Debbie Dee: so every transaction generates a 10$ requirement

[13:37] Mick Nerido: Why would anyone lend money if not for interest?

[13:38] Fred123 Aiten: you need compensation for the risk

[13:38] herman Bergson: Ask the Credit Card companies Mick ㋡

[13:38] herman Bergson: Yes Fred....the person who took the loan could die to early ㋡

[13:39] Fred123 Aiten: or the asset on which the loan is secured plummets in value

[13:39] herman Bergson: Like you take a life insurance when you take a mortgage, to protect your heirs from financial disaster

[13:39] Bejiita Imako: the banks want everyone to go over to card but there is some problems cause they take a fee for every transaction small buys make the stores go with loss

[13:39] Mick Nerido: A loan of money is like a lone of a horse

[13:39] Bejiita Imako: so they don't want to take cards for small buys but the baks try force them

[13:40] herman Bergson: Hello Clerisse

[13:40] Mick Nerido: u return the horse plus a little of what u got with the horse...

[13:41] Clerisse Beeswing: Sorry I am late professor

[13:41] Bejiita Imako: hi Clerisses

[13:41] herman Bergson: I think we are doing pretty well on basic economic principles ^_^

[13:41] Clerisse Beeswing: hello Bejiita

[13:41] Fred123 Aiten: what if you got nothing with the horse

[13:41] Fred123 Aiten: the lender loses

[13:41] Bejiita Imako: as the banks do here that would mean you cant sell low cost small items any longer cause the stores loose money when they sell them

[13:41] Bejiita Imako: cause of the bank fees

[13:42] Bejiita Imako: the cash less society

[13:42] herman Bergson: Taking interest is for covering risks as Fred said...

[13:43] herman Bergson: Sounds reasonable...

[13:43] herman Bergson: but there you see how complex everything has become...

[13:43] herman Bergson: for how to establish the price of that risk

[13:43] Mick Nerido: Credit ratings

[13:44] herman Bergson: Oh yes...there are a lot of systems at work...

[13:44] Mick Nerido: Fred what did u borrow my horse for?

[13:44] herman Bergson: In the Netherlands for instance the housing market has come to a complete standstill

[13:44] Fred123 Aiten: to gather wheat in from my field

[13:45] herman Bergson: because the banks calculate the risks of new mortgages in a certain way

[13:45] Mick Nerido: so u give me a little wheat..

[13:45] Fred123 Aiten: sorry, it poured with rain on the day of harvest and the entire crop was ruined

[13:45] Debbie Dee: So, why can't you give mick some wheat in return?

[13:45] Fred123 Aiten: no wheat I'm afraid

[13:45] Debbie Dee: lol

[13:46] Fred123 Aiten: mick took a risk by lending me his horse and he lost out

[13:46] Mick Nerido: u r headed for debter's prison lol

[13:46] herman Bergson: I think this was very instructive with regards to basic economical ideas.....

[13:46] Fred123 Aiten: lol

[13:47] Bejiita Imako: haha

[13:47] herman Bergson: I'd suggest to continue this discussion next Thursday when I'll discuss Aristotle on economics and greed....

[13:47] Mick Nerido: Thanks everyone gotta go

[13:47] herman Bergson: Ok Mick....

[13:47] Debbie Dee: Thanks Herman....

[13:47] herman Bergson: Class dismissed ㋡

[13:47] Bejiita Imako: some more interesting stuff

[13:47] Fred123 Aiten: thanks Herman

[13:47] Mick Nerido: rides off into the night...

[13:47] Bejiita Imako: oki time to get back to the pool party

[13:48] Debbie Dee: Food for thought...

[13:48] Bejiita Imako: cu soon

[13:48] Clerisse Beeswing: Thanks professor it was interesting sorry I am late again

[13:48] Fred123 Aiten: bye everyone

[13:48] Mick Nerido: thanks herman

[13:48] Debbie Dee: Hi Clerisse

[13:48] Clerisse Beeswing: hello Framdor

[13:49] herman Bergson: what a timing.....

[13:49] Debbie Dee: Oh well, off to bed.

[13:49] herman Bergson: Just crashed

[13:49] Debbie Dee: lucky. Bye prof :0

[13:50] herman Bergson: Ok...see you on Thursday ㋡

[13:50] Debbie Dee: yes :)

[13:50] Debbie Dee: bye annie

[13:50] Annie Brightstar: bye Debbie

400. The Utopia of the Free Market

In the previous lecture I introduced the social and economical principle of "commons",  common meadows for instants which can be used for the basic needs of a community.

These commons seem to be destroyed by the rise of the free market, but today we see them return, when countries limit catch quota for fish or oppose to total destruction of rainforests for only plain profit.

The facts themselves force us to see this earth with it limited resources as our common. There is an increasing insight, that leaving everything to a free market economy with unlimited  growth is an absurdity.

In the subsistence economy there were three organizing economical principles. One, the commons, I have presented to you, the other two are reciprocity and redistribution.

Reciprocity is an important mechanism to stimulate social cohesion in a community. In a free market society, where everything can be bought for money, reciprocity,at least according to Ayn Rand, is not done.

However, it still exists and belongs to our evolutionary heritage, like for instance chimpanzees give each other food or seek for  fleas in each other's fur.

While reciprocity in societies dominated by the subsistence principle was almost a must for survival, in our market society it is mainly a matter of free choice.

Gifts with Christmas or birthdays, volunteering for all kinds of activities in your neighborhood, clubs, at work or for friends are still important to create the feeling of social cohesion. Thence, money can't buy everything.

Redistribution of goods played for the first time a part in societies which depend on agriculture, like in ancient Egypt or Mesopotamia.

Obviously this redistribution took place primarily in need of non-producing groups: priests, state officials and the army. All was paid in kind. Money was hardly used.

In today's society redistribution is neatly organized by redistributing our tax money. It took a long learning process to get as far as we have come now. I'll discuss that later.

The discussion about this redistribution of our tax money we call politics, where socialism has quite different ideas about it than neoliberalism.

When we look back on these three basic economical organizing principles: Commons, Reciprocity and Redistribution, there is something remarkable about them.

Ayn Rand rejects them all three sharply in the name of the role that money should play, not only on the market but in all social relationships.

In Atlantis, Rand's utopia, everything is dominated by the dollar and all buildings are decorated with the dollar sign like a cross on a church tower.

It is to no surprise, because the Atlantis oath is:

I swear by my life and my love of it that I

will never live for the sake of another

man, nor ask another man to live for mine.

Dagny Taggart learn that Atlantis in not a place where it is allowed to ask for help. When John Galt, her lover, offers to help her in the kitchen, she reminds him of the rules.

She is paid for what she is doing. And here we see the weird view of man Rand offers: the creative, productive, but completely isolated individual.

Only the free market is the principle. It may  be clear that any form of redistribution is rejected by Rand. 

Three words are taboo and forbidden in Atlantis: need, help and sharing as a community. Thus we can conclude that we are fortunately not living in Rand's Atlantis.

The Discussion

[13:24] herman Bergson: For those who do not know Ayn rand and Atlantis

[13:25] Bejiita Imako: indeed wouldn't be nice at all

[13:25] Debbie Dee (framdor): loveless efficiency - steam powered

[13:25] Bejiita Imako: we would be like machines

[13:25] herman Bergson: Ayn Rand is a writer who published the novel "Atlas Shrugged" in 1957

[13:25] herman Bergson: In the novel she describes an ideal society, named Atlantis

[13:25] herman Bergson: Thank you...

[13:26] herman Bergson: The floor is yours...where Bejiita already was dancing ^_^

[13:26] Lizzy Pleides: Thank you Professor!

[13:26] Mick Nerido: We are moving toward an Ayn Rand world it seems...

[13:26] Bejiita Imako: Ayn Rand has a really strange view if she thinks we should reject our social needs and just use each other for oneself

[13:26] Debbie Dee (framdor): So, the current state of the first world - the free market world - is already like Atlantis

[13:27] herman Bergson: Well Debbie....

[13:27] herman Bergson: neoliberalism is breaking down the welfare state in a number of countries indeed...

[13:28] herman Bergson: UK, Netherlands....

[13:28] Bejiita Imako: Sweden

[13:28] herman Bergson: The US never reached that level...

[13:28] Mick Nerido: Ronald Reagen started it in the us

[13:28] herman Bergson: Yes Mick...the big buddy of Thatcher in the UK

[13:29] Debbie Dee (framdor): I mean in the sense that we see looming energy crises, and just keep cranking up the economy at all costs

[13:29] Debbie Dee (framdor): Being rich is more important than survival in many places.

[13:29] Mick Nerido: Big corps own the gov in the US

[13:29] herman Bergson: yes, Debbie but there is a growing counter movement

[13:29] Debbie Dee (framdor): There was one when my dad was a hippy -

[13:30] herman Bergson: yes Mick…like here....

[13:30] herman Bergson: They talk about the Financial Markets.....

[13:30] herman Bergson: They seem to own the political situation in the world...

[13:31] herman Bergson: The repeating question..... Oh dear...How will the financial Markets respond to this or that development

[13:31] Mick Nerido: They own the politicians

[13:31] Kime Babenco: The economies are drifted by stock exchanges, and ever raising gains... the sky is the limit... As every country has to need a growing economy... How can it grow ? If others do less? Or a continuing growth of worlds population ... It can not grow forever... So we need to accept that, and reach a maintainable ceiling... Maybe we already over it...

[13:32] Lizzy Pleides: In europe almost all nations are obliged to save money and in all these nations the governments are voted out now, where is the reciprocity in europe?

[13:32] Mick Nerido: there is no limit to how much u can contribute to a candidate

[13:32] Debbie Dee (framdor): Corporations have become more than the workers... With their modern financial and production systems, they take on a need for growth, often beyond the directors control.

[13:32] herman Bergson: Yes....all hard questions.....

[13:33] Annie Brightstar (anniebrightstar): Last week you mentioned Garrett Hardin

[13:33] herman Bergson: Yes...

[13:33] Bhelle Alacrity: so how do you pay for all of this?

[13:33] Bejiita Imako: yes complicated stuff

[13:33] Bhelle Alacrity: Where does the money come from?

[13:33] Annie Brightstar (anniebrightstar): I read Lifeboat Ethics: the Case Against Helping the Poor

[13:33] herman Bergson: Well...I really don't know....

[13:33] Lizzy Pleides: raining from heaven, lol

[13:33] Bejiita Imako: well some companies seem to believe that

[13:33] Kime Babenco: Tell me where!

[13:34] herman Bergson: Since World War II the governments in my country (like in many others) have spent more money then they received from taxes...

[13:34] Fred123 Aiten: Growth of Financial Markets is not a completely bad thing. Because the pension funds invest heavily in the markets many people rely of good growth to provide a living pension

[13:34] Mick Nerido: wealth come from the combined work done by ALL the people

[13:34] herman Bergson: I think that that is the beginning of all misery...

[13:34] Kime Babenco: I agree

[13:34] Bejiita Imako: yes

[13:34] Bejiita Imako: for sure

[13:34] Kime Babenco: But I am from a country that is a bad example

[13:35] herman Bergson: Yes Fred I know....

[13:35] herman Bergson: Which one ids that Kime...Greece? ㋡

[13:35] Kime Babenco: No, Brasil

[13:35] Bejiita Imako: ok

[13:35] Kime Babenco: Doing fine now

[13:35] herman Bergson: I thought that Brazil is doing fine now economically

[13:36] Kime Babenco: We have to help Europe now

[13:36] Kime Babenco: lol

[13:36] Kime Babenco: Yes, but I meant in the passed

[13:36] herman Bergson: Well..you could buy a country or two perhaps...

[13:36] herman Bergson: the other countries will be bought by China....^_^

[13:37] Mick Nerido: China may swolow us all lol

[13:37] Bejiita Imako: hehe yes soon china own the world

[13:37] Debbie Dee (framdor): China will also crash - energy and overpopulation

[13:37] Debbie Dee (framdor): and now overproduction

[13:37] Bejiita Imako: but chinas government is a bad example cause how they treat people

[13:37] Lizzy Pleides: yes china will have problems too on long term

[13:38] Mick Nerido: I'm afraid war will be the result of all this misery

[13:38] Kime Babenco: It's not all good here... As in every country... (I guess) it's a few that gain a lot, for the others it may improve a bit or remain the same

[13:38] Bejiita Imako: censor torture etc.

[13:38] Fred123 Aiten: I agree Mick, unrest is the most likely consequence

[13:38] Lizzy Pleides: we have a concentration of atomic weapons in asia

[13:38] herman Bergson: This is the world we live in, dear class...you all have your country and economy....

[13:38] Debbie Dee (framdor): censorship and torture are widely practiced by the USA at this time...

[13:39] Fred123 Aiten: either between countries or within a country

[13:39] Mick Nerido: The competion for resources will be the cause

[13:39] herman Bergson: But one thing to keep in mind is...

[13:39] Debbie Dee (framdor): the internet bill is being pushed through the senat

[13:39] Debbie Dee (framdor): and Guantanamo bay still exists

[13:39] herman Bergson: that 99% of the discussions in your country about human welfare are formulated in economical terms...

[13:39] herman Bergson: The political discourse has become an economical discourse...

[13:40] herman Bergson: And that is a remarkable thing...

[13:40] herman Bergson: A consequence of the free market utopia...

[13:40] Bejiita Imako: all is about money, like here they cut down on schools and other important stuff to save money

[13:40] Kime Babenco: Who's country ?

[13:40] Bejiita Imako: thats NOT where to save money

[13:40] herman Bergson: almost all countries Kime

[13:40] Kime Babenco: Ah,ok

[13:41] Debbie Dee (framdor): you said politics was about redistribution of taxes - ie always an economic discourse

[13:41] herman Bergson: no Debbie....

[13:41] herman Bergson: Not a redistribution of tax money....in a literal sense

[13:41] herman Bergson: but a redistribution of goods and resources...

[13:41] Lizzy Pleides: i am afraid that nobody really will save money

[13:42] herman Bergson: and in our society this has become a very complex process...

[13:42] herman Bergson: For instance.....

[13:42] Lizzy Pleides: hi tessa

[13:42] Annie Brightstar (anniebrightstar): Hi Tessa

[13:42] Tessa Zalivstok: apologies herman

[13:42] Tessa Zalivstok: everybody

[13:42] herman Bergson: You have a couple which earns 1000L no children...

[13:43] Bejiita Imako: hi Tessa

[13:43] herman Bergson: another couple..same work same income....but three children....

[13:43] Tessa Zalivstok: hi Bejita

[13:43] herman Bergson: also 1000L a month.....

[13:43] herman Bergson: feedign two mouths or 5 mouths from 1000L while they both contribute to society the same...

[13:44] herman Bergson: then you impose taxes...both pay 200L

[13:44] herman Bergson: you give of the 400L you get 300L to the family with three kids...

[13:45] herman Bergson: that is the meaning of redistribution and living together in a society

[13:45] Bejiita Imako: ah

[13:45] herman Bergson: and with the remaining 100L you organize education or healthcare etc.

[13:45] Bejiita Imako: hmm indeed having kids don't increase your income even there are more to feed

[13:46] Bejiita Imako: so what you have over decrease,

[13:46] herman Bergson: This is called solidarity...

[13:46] Kime Babenco: We have a minimum salary here in Brazil… I know some people work below that in some states, because they are exploited and can not read...

[13:46] Lizzy Pleides: and the couple will be mad, lol

[13:47] Tessa Zalivstok: we just introduced a minimum wage here in Hong Kong

[13:47] Fred123 Aiten: A major problem in the UK is that people are having children simply to get government handouts. They get more for having kids than working

[13:47] herman Bergson: Yes Lizzy..like we all are when we pay taxes....

[13:47] Tessa Zalivstok: an enormous number of people went on welfare

[13:47] Bejiita Imako: ok

[13:47] Tessa Zalivstok: which was less than they were earning

[13:47] herman Bergson: But you can continue the story....

[13:48] herman Bergson: due to this redistribution one of the kids became a doctor who treated the childles s couple...:-)

[13:48] Debbie Dee (framdor): ;) nice

[13:48] Annie Brightstar (anniebrightstar): hmmm

[13:48] Bejiita Imako: thats nice ㋡

[13:48] Tessa Zalivstok: Herman I thought we were attacking utopias

[13:48] Kime Babenco: Lula, our ex president, introduced the ZERO FAME plan = no hunger plan... forcing every supermarket do distribute a monthly packet at a minimum prise... It was about 39 R$ , where the minimum salary was at that tim 270 R$ a month

[13:48] Mick Nerido: The mobility we have make us a less cohesive society

[13:49] Tessa Zalivstok: yours sounds just like one

[13:49] Annie Brightstar (anniebrightstar): It doesn't seem very likely Herman

[13:49] herman Bergson: laughs at Tesssa....

[13:49] Bejiita Imako: ㋡

[13:49] Tessa Zalivstok: well?

[13:49] Annie Brightstar (anniebrightstar): It doesn't fit with reality

[13:49] herman Bergson: These are the basics of a political debate Tessa....

[13:50] Tessa Zalivstok: let me put a different fantasy

[13:50] herman Bergson: Though in parlment the pictures are more complex indeed

[13:50] Tessa Zalivstok: a family earns 1000L

[13:50] Tessa Zalivstok: they pay 550 L in taxes

[13:50] herman Bergson: that is just hypothetical....just to have a number

[13:50] Tessa Zalivstok: which is what seems to be the average take in Europe at the moment

[13:50] Tessa Zalivstok: no

[13:51] Tessa Zalivstok: I'm wrong

[13:51] Tessa Zalivstok: it pays 300 L in taxes

[13:51] herman Bergson: yes...

[13:51] Bejiita Imako: thats 55 % tax

[13:51] Tessa Zalivstok: which isnt enough for the kid to become a doctor

[13:51] Kime Babenco: Let her finish

[13:51] Bejiita Imako: a bit much

[13:51] herman Bergson: I pay almost 50% of my income to taxes

[13:51] Tessa Zalivstok: so the government borrows a further 220L against that

[13:51] herman Bergson: There we go....

[13:52] Bejiita Imako: but i think there is a tax law that says that we  should pay more in tax in %¨

[13:52] herman Bergson: yes Tessa ...I know ...:-)

[13:52] Velvet (velvet.braham): Herman, that seems awfully high!

[13:52] Tessa Zalivstok: adding it to the previous 10000L which it has borrowed againstthe family's taxes

[13:52] herman Bergson: It is far more complicated than I described...

[13:52] Kime Babenco: Each country has a different system...

[13:52] Tessa Zalivstok: then goes to the bond markets to borrow the extra money

[13:52] herman Bergson: I just tried to elucidate a basic idea of social solidarity

[13:52] Tessa Zalivstok: hoping that everybody will believe that governments eventually pay back

[13:53] Kime Babenco: Maybe you would like to go back to ancient USSR with no unemployment and free medical ?

[13:53] Tessa Zalivstok: that sounds like a good idea

[13:53] herman Bergson: No Kime absolutely not...

[13:53] Tessa Zalivstok: why not herman

[13:53] Tessa Zalivstok: sounds good to me

[13:53] Kime Babenco: I was not serious... it was question agains the other extreme...

[13:54] Tessa Zalivstok: we just have to take filthy money off the table here

[13:54] herman Bergson: That deprived almost every citizen of a sense of solidarity...the state takes care of everything..

[13:54] Tessa Zalivstok: sorry

[13:54] herman Bergson: That was maximal government control....and it collapsed..

[13:54] Tessa Zalivstok: thats the basic idea of solidarity

[13:54] Kime Babenco: Yes, I agree...

[13:54] Kime Babenco: No long hours... because you salary remains the same...

[13:54] Tessa Zalivstok: so what's your working model herman?

[13:54] herman Bergson: Theoretically yes..Tessa....but it conflicts with human nature

[13:55] Bejiita Imako: there must be a balance between all free and government

[13:55] Tessa Zalivstok: which country makes it work?

[13:55] Tessa Zalivstok: oops

[13:55] Bejiita Imako: totally free and speeds out of control like a roler coaster that's the free market

[13:55] Tessa Zalivstok: country

[13:55] Kime Babenco: I guess... so far ... none

[13:55] herman Bergson: North Korea??? ^_^

[13:55] Tessa Zalivstok: heheh

[13:55] Bejiita Imako: but not too much control either

[13:55] Bejiita Imako: and must be done in the right way

[13:55] Tessa Zalivstok: where they're starving in the streets?

[13:55] Tessa Zalivstok: seriously herman

[13:56] Kime Babenco: Even in New York

[13:56] herman Bergson: I think there is a continuum.....

[13:56] Tessa Zalivstok: there must be some country which approaches your ideal

[13:56] Debbie Dee (framdor): Not mine...

[13:56] Bejiita Imako: north korea is terrible, the people dies while Kim bath in money and plan how to erradicate the planet with nuclear weapons

[13:56] herman Bergson: to the left absolute communism.....tot the right absolute anarchy…

[13:56] Debbie Dee (framdor): nor any around me in southern africa

[13:56] Tessa Zalivstok: yes but nthwere must be somewhere

[13:56] Lizzy Pleides: when we are able to manage greed, then we will get solidarity, ... because greed seems to be a fundamental quality of man

[13:56] Kime Babenco: Otherwise we would all go there, or try to...

[13:56] Tessa Zalivstok: otherwise the discussion seems empty

[13:57] Tessa Zalivstok whispers: is it Sweden?

[13:57] Kime Babenco: Perfection is not of this world

[13:57] Tessa Zalivstok: Cuba?

[13:57] herman Bergson: Yes Lizzy......I agree

[13:57] Tessa Zalivstok whispers: Armenia?

[13:58] Tessa Zalivstok: Monaco seems successful

[13:58] Debbie Dee (framdor): Greed is multiplied through advertising....

[13:58] Kime Babenco: Lol

[13:58] herman Bergson: Our whole debate here with respect to the utopia of the free market is the question

[13:58] herman Bergson: what is the role of a government in a society

[13:58] Tessa Zalivstok: yes but you posited a model

[13:58] Tessa Zalivstok: of the family with the young doctor

[13:58] Tessa Zalivstok: so

[13:58] Tessa Zalivstok: it seems you have something in mind

[13:59] Bejiita Imako: yes

[13:59] Bejiita Imako: ㋡

[13:59] Tessa Zalivstok: somewhere must at least approach this

[13:59] herman Bergson: I always have something in mind Tessa ^_^

[13:59] Kime Babenco: Antarctica

[13:59] Debbie Dee (framdor): (Laughing out Loud)

[13:59] Bejiita Imako: BRRRRR Antarctica

[13:59] Tessa Zalivstok: America with it's alleged torture doesn;t seem to be it

[13:59] Tessa Zalivstok: the old soviet union has been dismissed

[13:59] Bejiita Imako: cold

[14:00] Kime Babenco: Yes, I know... I am sorry

[14:00] Tessa Zalivstok: You seem to think Europe has no money

[14:00] herman Bergson: So I'll have my next lecture in mind now and thank you all for you creative participation in the discussion....

[14:00] Tessa Zalivstok: must be somewhere

[14:00] Lizzy Pleides: is the new Russia much better?

[14:00] Tessa Zalivstok: otherwise I'm depressed

[14:00] herman Bergson: I have some money Tessa...:-)

[14:01] Kime Babenco: There is plenty of money ... in the world...

[14:01] Tessa Zalivstok: Tessa hangs head

[14:01] Debbie Dee (framdor): Tessa, depression is appropriate.....

[14:01] herman Bergson: Feel free to continue..but officially...Class dismissed ^_^

399: The Utopia of the Free Market - Can it be stopped?

The free market, which nowadays is experienced as inevitable, unescapable has not been always the dominating economic principle.


In a previous lecture I told you that till the 16th century we speak of a subsistence economy.


A subsistence economy only possesses enough goods to be used by a particular oikos, tribe or nation to maintain its existence and provides little to no surplus for other investments.


It is a kind of economy, which is not driven by a constant need for growth. The market was at most a place to obtain some additional consumer goods.


But put a bunch of people together with a Randian attitude, which means driven by rational self-interest, and you can witness "The Tragedy of the Commons".


An example of a common is in  medieval land tenure in Europe, shepherds sharing a common parcel of land, on which they are each entitled to let their cows graze.


The idea comes from ecologist Garrett Hardin and was published in Science in 1981. The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, 


acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource, even when it is clear that it is not in anyone's long-term interest for this to happen.


In Hardin's example, it is in each shepherd's interest to put the next (and succeeding) cows he acquires onto the land, even if the quality of the common is damaged for all as a result, through overgrazing. 


The shepherd receives all of the benefits from an additional cow, while the damage to the common is shared by the entire group.


If all shepherds make this individually rational economic decision, the common will be depleted or even destroyed, to the detriment of all.


In a way this happened in 16th century England, where the commons were not depleted but made to private property of the local gentry.


It happened in 1989 in Mongolia after the fall of communism and the free market made its entrance and prizes dropped.


In 1991 the number of animals, mainly goats that have a devastating effect on grasslands, was doubled, and the results were dramatic.


Like in the 16th and 17th century, because of this rational self-interest behavior, tenthousands of people lost their means of living and became contractors, hired workers.


A vast reservoir of workers who fitted in perfectly in the system of production of the free market. people who went to the big cities looking for work.


Do we now have to conclude that modern man as homo economicus public goods ("commons"), fisheries and water resources inevitably will destroy due to his on personal gain oriented behavior?


Do we go under due to the Tragedy of the Commons?  My answer is "NO". There are already examples where the free market has to step back. Maybe you know these examples too?!


The Discussion

The text was lost due to a harddisk crash and totall loss of data on that disk.
Maybe I'll be able to get is from a student's logfile