Wednesday, February 27, 2019

762: The Holy Grail - The Free Market...

From my morning newspaper of today:
In the bill that would completely liberalize the branch for letters and parcels, it said at the time (it was 1994): 
"With this proposal more choices, lower prices and better quality of postal services for the user arise.
The effect of full liberalization is expected in particular in the business market. . " Nothing would be anymore like it was. 
Every company that thought to deliver letters and packages at least as well as the good old PTT (Post - Telegraph-Telephone), was allowed to sign up. And so it happened. 
"There were suddenly some four parties that mainly focused on business mail, such as letters from banks," says historian and research journalist Sander Heijne. 
"It soon became apparent that they were entering a shrinking market and that sorting and delivery of mail is also very labor-intensive." 
Heijne is the author of the book 'There are still 17 million people waiting before you', about thirty years of market forces in the Netherlands. 
In it he examines how it works out as government services - such as bus companies, energy companies, municipal housing corporations and the postal services - become independent parties. 
"And then I come to the conclusion that actually in no sector anything is realized of the promise that services will become better and cheaper through liberalization."  -- END OF QUOTE --
This the result of what we have inherited from the 20th century and in particular from economists like Hayek:
believers in the holy grail of free markets and beneficial effect of market forces.   
Friedrich Hayek believed that the prosperity of society was driven by creativity, entrepreneurship and innovation, which were possible only in a society with free markets.
Competition in the free market thus is mainly driven by innovation, coming up with new products and thus making money.
Agreed, it will work in some industries. For instance every six months a new model smartphone or car. But what is there to innovate for bringing parcels and letters from A to B?
Hardly anything, but  it is the free market, so you have to compete with the others. If you can't get new customers by offering innovative products,
there is only one solution. To make a profit you have to lower the costs. And so they did. 7000 people lost their jobs to begin with.
Thousands of employees lost their permanent contract and had to become (less well paid) self-employed workers.
The delivery of letters was reduced from 6 days a week to 5 days a week. A competitor of the old PTT  delivered only on Tuesdays and Thursdays.
End of the story is, that we now are in the situation that the last competitor is going to merge with the good old PTT, the former governmental controlled postal services.
And now comes the crisis of faith. There is a governmental institution that watches over free competition to prevent, that some company gets a monopoly in something.
But because the old PTT, now called PostNL, is going to merge with its last surviving competitor, we have again one "national" postal service again.
Will the Institution allow this monopoly in the free market world?
And last but not least, I don't want to keep this from you: economist Barbara Baarsma, specialized in market forces: 
"The market for letterbox mail is not big enough for two players at low volumes, there is too little scale effect, 
and the player that remains has a natural monopoly, as it is called, not that market forces have failed, it means that the market is too small and shrunk faster than expected."
Do you get it?....the market is too small and there is something like scale effect, whatever that is, and 
a natural monopoly. So natural.....
And thus we inherited the free market from the 20th century. Time to move on......
Thank you for your attention again...the floor is yours :-)

The Discussion
[13:16] Gemma (gemma.cleanslate): by liberalizations  mean privatizing those sectors I assume
[13:16] Gemma (gemma.cleanslate): ?
[13:16] herman Bergson: Yes Gemma
[13:16] Gemma (gemma.cleanslate): ok that is what it is called here
[13:17] Particle Physicist Bejiita (bejiita.imako): When focus goes from providing a necessary service no matter the scale of it to instead making money this is what will happen
[13:17] Dien (djdien.bailey) is offline.
[13:17] Particle Physicist Bejiita (bejiita.imako): it just doesn't work in many cases
[13:17] Gemma (gemma.cleanslate): and the aim for lots of local and small state projects
[13:17] Particle Physicist Bejiita (bejiita.imako): still the service need to be there and available
[[13:17] herman Bergson: In other words....this whole idea of market forces and free market needs to be rethought is a failure in a number of areas
[13:18] Particle Physicist Bejiita (bejiita.imako): free market thinking does not work there
[13:18] Gemma (gemma.cleanslate): sure is
[13:18] Gemma (gemma.cleanslate): take off regulations and there it goes
[13:18] herman Bergson: Indeed Bejiita....many see it, but don't dare to take action...
[13:18] herman Bergson: In no time the are called SOCIALISTS!
[13:18] Gemma (gemma.cleanslate): yep
[13:19] Gemma (gemma.cleanslate): the word of the day
[13:19] herman Bergson: and that seems to be a bad thing
[13:19] Alarice Beaumont: it's a shame that with all the ppl who have written about this.. there seems to really not be a good solution.. to provide everything for a fair price and still have a good service
[13:19] Particle Physicist Bejiita (bejiita.imako): socialist = someone who don't care about making money of something but just want to provide a good service?
[13:19] herman Bergson: There are solutions enough Alarice
[13:19] Particle Physicist Bejiita (bejiita.imako): well in todays greedy world i guess thats seen as not normal
[13:20] Particle Physicist Bejiita (bejiita.imako): sadly
[13:20] herman Bergson: But Hayek for instance was against social justice.....redistribution of income by tax measures
[13:20] Alarice Beaumont: who can define what "social justice" really is?
[13:21] Alarice Beaumont: I mean.. why should I - who work hard - pay taxes to be given to a person who sits at home cause he/ she doesn't want to get up at 8 O'clock in the morning?!
[13:21] herman Bergson: It is equal redistribution of resources among a population based on everyones contribution to society...based on their individual capabilities
[13:22] herman Bergson: The facts, Alarice....
[13:22] herman Bergson: The person(s) you refer to are less than 3% of the population
[13:22] Gemma (gemma.cleanslate): many people are being forced out of their situations
[13:22] Alarice Beaumont: yes, there you are right Herman :)
[13:22] Gemma (gemma.cleanslate): not by choice
[13:23] herman Bergson: The remainder of those who are not well of are so by lack of chances, low education, limited mental capabilities etc
[13:23] Gemma (gemma.cleanslate): and now the more robots adn artificial intelligence will do more of that
[13:23] herman Bergson: Indeed by no choice Gemma
[13:23] Gemma (gemma.cleanslate): right
[13:23] herman Bergson: And that means being a socialist....
[13:24] Gemma (gemma.cleanslate): sigh
[13:24] herman Bergson: to support the moral value that everyone has a right to a decent life and that we can achieve that by sharing
[13:24] Gemma (gemma.cleanslate): hard to swallow for many
[13:24] Particle Physicist Bejiita (bejiita.imako): and that is now frowned upon i guess
[13:25] herman Bergson: I was lucky.....could go to university...had a well paid job for 30 years....
[13:25] herman Bergson: and why...?
[13:25] Alarice Beaumont: born in the right country.. the right parents :)
[13:25] herman Bergson: I happened to be the right personal characteristics to study and a good grey mass in my head
[13:25] Gemma (gemma.cleanslate): correct
[13:25] Particle Physicist Bejiita (bejiita.imako): in short, only the rich are allowed to live in todays society, the others are baically thrown out in the gutter
[13:25] herman Bergson: not by choice....
[13:26] Particle Physicist Bejiita (bejiita.imako): something is wrong for sure
[13:26] Gemma (gemma.cleanslate): here the amount of student debt is growing enormously
[13:27] herman Bergson: So I have a moral responsibility to that construction worker who built my university but has a tougher life and has a lower pay so that his children never will reach the university
[13:27] herman Bergson: unless I share some of my wealth with him
[13:27] herman Bergson: Student debts in the US are sheer madness....
[13:27] Gemma (gemma.cleanslate): yes
[13:28] Gemma (gemma.cleanslate): they are
[13:28] herman Bergson: and the Netherlands is going in the same direction
[13:28] Gemma (gemma.cleanslate): ohoh
[13:28] herman Bergson: A debt of US$ 40.000 is common these days
[13:28] Particle Physicist Bejiita (bejiita.imako): requiring a life of work just to pay it back, in other words, even if you get a work from your education it will still take entire life to pay the debts back so you can as well just skip education and work, your situation will be same
[13:28] Gemma (gemma.cleanslate): in CT some are trying for bills that will make community college 2 year free
[13:28] Particle Physicist Bejiita (bejiita.imako): unless you are one of few born with silver spoon in the mouth
[13:29] Gemma (gemma.cleanslate): makes sense
[13:29] Alarice Beaumont: that is because they don't pay taxes in the states.. not the rich ones
[13:29] Gemma (gemma.cleanslate) GIGGLES!!
[13:29] Gemma (gemma.cleanslate): ...LOL...
[13:29] Gemma (gemma.cleanslate): so right
[13:29] Particle Physicist Bejiita (bejiita.imako): the Scrooge Mc Duck syndrome
[13:29] Gemma (gemma.cleanslate): where is cb
[13:29] herman Bergson: an amazing phenomenon...
[13:29] Gemma (gemma.cleanslate): would have lots to say on this
[13:29] Particle Physicist Bejiita (bejiita.imako): the more money u have the less you want to pay
[13:30] Gemma (gemma.cleanslate): very true
[13:30] Particle Physicist Bejiita (bejiita.imako): and share
[13:30] Alarice Beaumont: not necessarily...
[13:30] Gemma (gemma.cleanslate): well here for some yes
[13:30] herman Bergson: That world of economic ideas we inherited form the previous century
[13:30] Gemma (gemma.cleanslate): some of the billionaires are sharing
[13:30] Alarice Beaumont: a lot of rich ppl build museums of have funds... instead of paying taxes!
[13:31] Gemma (gemma.cleanslate): have formed a pact
[13:31] Gemma (gemma.cleanslate): and are giving huge amounts
[13:31] Particle Physicist Bejiita (bejiita.imako): Bill Gates is a good example
[13:31] Gemma (gemma.cleanslate): he is
[13:31] Particle Physicist Bejiita (bejiita.imako): he is not greedy, he shares a lot
[13:31] Gemma (gemma.cleanslate): money into so many projects
[13:31] Gemma (gemma.cleanslate): around the world
[13:31] Gemma (gemma.cleanslate): clean water
[13:31] herman Bergson: That is for their own glory.....they should build schools with free education
[13:31] Gemma (gemma.cleanslate): they do
[13:31] Gemma (gemma.cleanslate): they really do
[13:32] herman Bergson: But there is one problem with this philanthropy....
[13:32] Particle Physicist Bejiita (bejiita.imako): education is something necessary, not something to make money on, its about peoples future lives
[13:32] herman Bergson: these are individual people, not chosen....they do as they like
[13:32] Particle Physicist Bejiita (bejiita.imako): and possibilities
[13:32] Gemma (gemma.cleanslate): true
[13:32] herman Bergson: why all these funds....give the money to the governement
[13:33] Gemma (gemma.cleanslate) GIGGLES!!
[13:33] Gemma (gemma.cleanslate): ...LOL...
[13:33] Gemma (gemma.cleanslate): right now could not trust where it went!!
[13:33] Alarice Beaumont: yes.. that would be the right thing to do!
[13:33] herman Bergson: The WALL!
[13:33] herman Bergson: \o/
[13:33] Gemma (gemma.cleanslate): omg
[13:33] Gemma (gemma.cleanslate): OMG!!!
[13:33] Gemma (gemma.cleanslate): he would love that!!!
[13:33] Gemma (gemma.cleanslate): wow
[13:33] herman Bergson grins
[13:33] Gemma (gemma.cleanslate): warren buffett builds the wall
[13:33] Gemma (gemma.cleanslate): with donations of 5 billion
[13:34] herman Bergson: is that so?
[13:34] Alarice Beaumont: just think what that would help in a school!
[13:34] Gemma (gemma.cleanslate): ye
[13:34] Particle Physicist Bejiita (bejiita.imako): indeed
[13:34] Gemma (gemma.cleanslate): if only those  who have lots of money could also have the moral obligation to pay more taxes
[13:35] Gemma (gemma.cleanslate): not live off of dividends
[13:35] Gemma (gemma.cleanslate): which are lower taxes
[13:35] Alarice Beaumont: yes.. But I think that would be something to work for.. in the schools ...
[13:35] Gemma (gemma.cleanslate): and so many do
[13:35] Gemma (gemma.cleanslate): schools would be the best way to improve life for all
[13:35] Alarice Beaumont: the taxes should be much higher on heritages!
[13:36] Gemma (gemma.cleanslate): nice thought
[13:36] herman Bergson: I sometimes have the belief, that the US fovernment at the moment is exactly what Ayn Rand has dreamt of
[13:36] Alarice Beaumont: a rich child gets everything to make own money.... so the state could take most of the heritage!
[13:36] Gemma (gemma.cleanslate): oh yes
[13:36] Gemma (gemma.cleanslate): i think of her often
[13:36] Particle Physicist Bejiita (bejiita.imako): meanwhile the rich CEOS s scream "BUT I NEED TO HAVE ONE MORE LAMBORGHINI/ FERARRI ENZO, I ONLY HAVE 99, I WANT 100!"
[13:36] Gemma (gemma.cleanslate): with so much disdain
[13:36] herman Bergson: The successful businessmen at the helm of state
[13:36] Alarice Beaumont: work should be paid better and less taxes.. more taxes on money .. not interests!
[13:37] Particle Physicist Bejiita (bejiita.imako): true
[13:37] Gemma (gemma.cleanslate) GIGGLES!!
[13:37] Gemma (gemma.cleanslate): ...LOL...
[13:37] Gemma (gemma.cleanslate): we will all fix the world
[13:37] Particle Physicist Bejiita (bejiita.imako): we will try
[13:37] Particle Physicist Bejiita (bejiita.imako):
[13:37] herman Bergson: I was thinking the same Gemma.... :-))
[13:38] Alarice Beaumont: it's so difficult.. everyone wants everything free but no one is willing to pay taxes! it's crazy! and ppl don't realize it.. really<1 span="">
[13:38] herman Bergson: It takes time
[13:38] Particle Physicist Bejiita (bejiita.imako): i guess
[13:38] herman Bergson: I have no problem paying taxes
[13:39] Alarice Beaumont: neither do I .. but if I look around ... ;(
[13:39] herman Bergson: as a result we live in a well organized and maintained country....Beertje and me :-))
[13:40] Gemma (gemma.cleanslate): lucky
[13:40] Alarice Beaumont: for now it's the same in Germany... but ppl don't want to pay taxes anymore!
[13:40] .: Beertje :. (beertje.beaumont): yes
[13:40] Gemma (gemma.cleanslate): Sn o
[13:40] Alarice Beaumont: look at the greek.... getting money form the EU and don't take taxes from the rich ones!
[13:40] herman Bergson: We have education, national healthcare, good hospitals and social care
[13:40] Gemma (gemma.cleanslate): And of course you know who the tax cuts benefited in this administration
[13:40] Gemma (gemma.cleanslate): not the middle class
[13:41] herman Bergson: yes indeed Gemma...another horror story
[13:41] Particle Physicist Bejiita (bejiita.imako): indeed
[13:41] Gemma (gemma.cleanslate): now that people will be doing the tax reports will see how little it really is
[13:41] Gemma (gemma.cleanslate): ah well
[13:42] herman Bergson: it all takes time  and patience....
[13:42] Particle Physicist Bejiita (bejiita.imako): I guess
[13:42] herman Bergson: The market forces philosophy is , as a general philosophy already breaking down
[13:43] herman Bergson: So...keep up the good spirit and be patient :-))
[13:43] Gemma (gemma.cleanslate) GIGGLES!!
[13:43] Gemma (gemma.cleanslate): ...LOL...
[13:43] Gemma (gemma.cleanslate): too much going on
[13:43] Particle Physicist Bejiita (bejiita.imako): contributes a bit of my "wealth" to your place Herman
[13:44] herman Bergson: You only have to wait till Thursday for my next lecture ^_^
[13:44] Particle Physicist Bejiita (bejiita.imako):
[13:44] Gemma (gemma.cleanslate): Pres is out visiting with one of his bff
[13:44] Gemma (gemma.cleanslate): ignoring the leaders of your countries
[13:44] Gemma (gemma.cleanslate): who are not bff anymore i guess
[13:44] herman Bergson: lol...yes....he fell in love with him, he has said...:-)
[13:44] Gemma (gemma.cleanslate): yes
[13:44] Gemma (gemma.cleanslate): idiot
[13:44] herman Bergson: so sweet :-)
[13:45] Particle Physicist Bejiita (bejiita.imako): hehe
[13:45] herman Bergson: must be something be in love with a dictator who hungers his people and  now missed 90.000 bottles of vodka....
[13:45] Gemma (gemma.cleanslate) GIGGLES!!
[13:45] Gemma (gemma.cleanslate): ...LOL...
[13:45] Gemma (gemma.cleanslate): really??
[13:45] Alarice Beaumont: oh my
[13:45] Alarice Beaumont: lol
[13:45] Gemma (gemma.cleanslate): missed that
[13:46] Gemma (gemma.cleanslate): the vodka?
[13:46] herman Bergson: they were confiscated in the Rotterdam harbour by customs :-)
[13:46] Particle Physicist Bejiita (bejiita.imako): that insane for sure!
[13:46] Gemma (gemma.cleanslate): ahhhhaaaaaaa
[13:46] Gemma (gemma.cleanslate): wow
[13:46] herman Bergson: in a container on a Chinese ship heading for China :-))
[13:46] Alarice Beaumont: lol
[13:46] Gemma (gemma.cleanslate): goodness
[13:46] Gemma (gemma.cleanslate): hope they don't destroy it
[13:46] Gemma (gemma.cleanslate) GIGGLES!!
[13:46] Gemma (gemma.cleanslate): ...LOL...
[13:46] herman Bergson: Gonna be Cold Turkey for Kim, I guess
[13:46] .: Beertje :. (beertje.beaumont): Hiding under an airplane on the ship
[13:47] Particle Physicist Bejiita (bejiita.imako): i bet they will now start a global nuclear war because of that
[13:47] Particle Physicist Bejiita (bejiita.imako): hopefully not
[13:47] Particle Physicist Bejiita (bejiita.imako): as said, they are crazy
[13:47] herman Bergson: No....the load might be auctioned
[13:47] Gemma (gemma.cleanslate): oh nice
[13:47] herman Bergson: We have our costs in detecting things like that :-))
[13:47] .: Beertje :. (beertje.beaumont): it was a cheap wodka they say
[13:48] Gemma (gemma.cleanslate): well will be good in a mixer
[13:48] herman Bergson: oh was it, Beertje?
[13:48] .: Beertje :. (beertje.beaumont): yes but very effective to get drunjk:)
[13:48] Particle Physicist Bejiita (bejiita.imako): BLAH i bet it will taste like paint thinner then
[13:48] .: Beertje :. (beertje.beaumont): drunk
[13:48] Gemma (gemma.cleanslate): ll
[13:48] herman Bergson: How decent of Kim not to buy the expensive stuff
[13:48] Gemma (gemma.cleanslate): prpbaby for his royal guard or what ever they are called
[13:49] herman Bergson: It were small hip put in you pocket :-)
[13:49] .: Beertje :. (beertje.beaumont): the people of NK only get 300 gr of food every day
[13:49] Gemma (gemma.cleanslate): yes and not good either
[13:49] herman Bergson: When I look at Kim.....Beertje :-)))
[13:50] Gemma (gemma.cleanslate): the army gets more and they are in terrible shape from the ones who defected
[13:50] .: Beertje :. (beertje.beaumont): he eat a lot more
[13:50] Gemma (gemma.cleanslate): i would say so
[13:50] herman Bergson grins
[13:50] herman Bergson: a lot yes :-)
[13:50] herman Bergson: Ok...let's wait till Thursday.....
[13:51] Gemma (gemma.cleanslate): ok
[13:51] herman Bergson: then we have had Cohen in a public testimony
[13:51] Particle Physicist Bejiita (bejiita.imako): oki
[13:51] Gemma (gemma.cleanslate): no private
[13:51] herman Bergson: Maybe hell will break loose :-))
[13:51] Gemma (gemma.cleanslate): behind closed doors
[13:51] Gemma (gemma.cleanslate): we will see what leaks
[13:52] Particle Physicist Bejiita (bejiita.imako): aaa
[13:52] herman Bergson: Today and Thursday are behind closed doors....
[13:52] Gemma (gemma.cleanslate): yes tomorrow!!
[13:52] Gemma (gemma.cleanslate) GIGGLES!!
[13:52] Gemma (gemma.cleanslate): ...LOL...
[13:52] Gemma (gemma.cleanslate): shall watch tv
[13:52] Particle Physicist Bejiita (bejiita.imako): ok
[13:52] herman Bergson: Wednesday is a public hearing by a congres committee
[13:52] Gemma (gemma.cleanslate): yes
[13:52] herman Bergson: I look forward to that
[13:52] Gemma (gemma.cleanslate): me too
[13:53] Gemma (gemma.cleanslate): and of course the white house is just saying he will tell all kinds of lies
[13:53] Particle Physicist Bejiita (bejiita.imako): Trump?
[13:53] Gemma (gemma.cleanslate): no
[13:53] Gemma (gemma.cleanslate): the lawyer
[13:53] Gemma (gemma.cleanslate): Cohen
[13:54] herman Bergson: Cohen will be the lair
[13:54] Particle Physicist Bejiita (bejiita.imako): aaa now i recognize that name
[13:54] Gemma (gemma.cleanslate): yes
[13:54] Particle Physicist Bejiita (bejiita.imako): aaa that mess yes
[13:54] herman Bergson: Trump's lawyer, Bejiita
[13:54] Gemma (gemma.cleanslate): as the experts say all such cases start with lies
[13:54] Alarice Beaumont: I need to go.. thanks Herman ... and for all .. have a nice evening.. see you next week :))
[13:54] Gemma (gemma.cleanslate): but then
[13:54] Alarice Beaumont: bye for now .)
[13:54] Gemma (gemma.cleanslate): bye alarice
[13:54] Gemma (gemma.cleanslate): so good to see you
[13:54] Particle Physicist Bejiita (bejiita.imako): heard some of it before but dont remember to much of it
[13:55] .: Beertje :. (beertje.beaumont): bye Alarice
[13:55] Gemma (gemma.cleanslate): well watch the news
[13:55] Particle Physicist Bejiita (bejiita.imako): well i guess its time to head otu
[13:55] Gemma (gemma.cleanslate): time to go anyway
[13:55] herman Bergson: Ok Alarice...let me dismiss class and thank you all again for your participation
[13:55] Particle Physicist Bejiita (bejiita.imako): and for me to write some more world changing code
[13:55] Gemma (gemma.cleanslate): hope to be here Thursday
[13:55] Particle Physicist Bejiita (bejiita.imako):
[13:55] herman Bergson: Nice Gemma
[13:55] .: Beertje :. (beertje.beaumont): bye Gemma
[13:55] Particle Physicist Bejiita (bejiita.imako): bye
[13:56] herman Bergson: Bye Bejiita :-)

Friday, February 22, 2019

761: Friedrich von Hayek...

"The Road to Serfdom" byFriedrich von Hayek was published in 1944. The book has been translated into about 20 languages and is dedicated to "The Socialists of all Parties". 
"The Road to Serfdom" is one of the most influential and popular expressions of classical liberalism, libertarianism and a forerunner of neoliberalism.
It has made an important contribution to the political ideologies of Margaret Thatcher and Ronald Reagan and the concepts of "Reagonomics" and "Thatcherism". 
It also led to the revival of the neoclassical economy in the West and a decline in Keynesian influence.

The Keynesian school is a movement in economic science, based on the ideas of the English economist John Maynard Keynes (1883-1946). 
The Keynesian economy proclaims a largely structuralist view, in which the place of man in his (macro-) economic environment is a major cause of individual economic behavior.
Macro-economics is the part of the economic science that deals with the economic behavior of people or companies on a national or international scale.
It is way too complex and off trail to go into detail, but Keynesian economists generally advocate a market economy partly managed by the government , 
a predominantly private sector, but with an active role for government intervention during recessions and depressions.
In the period 1973 - 1975 there was "stagflation". In economics, stagflation is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high.
Keynesian measures to fight the crisis didn't work in those days, which is of course very inconvenient for the ruling political parties in the government.
This was the moment that Margret Thatcher (UK) and Ronald Reagan (US) dropped a lot of government control over banks and the economy. Keynes was out, Hayek was in.
Hayek's central thesis is that all forms of collectivism lead logically and inevitably to tyranny. 
He uses the Soviet Union and Nazi Germany -  don't forget this is from 1944 - as examples of countries that had "gone the way to slavery" and had achieved tyranny. 
Hayek argued that in a centrally planned economy, the distribution and allocation of all resources and goods 
is performed by a small group that would not be able to take all relevant information into account.
Disagreement over the practical implementation of an economic plan combined with the inadequacy of the central management of resources would always make coercion necessary to achieve something. 
Hayek further argued that the failure of central planning by the public is seen as a lack of state power to implement a further good idea. 
This perception would cause the public to vote for more power for the state and thus assist in the emergence of a "strong man" 
who is deemed capable of "getting the job done". After these developments, a country would inevitably end up in totalitarianism. 
According to Hayek, "the road to slavery" is inevitably used with central planning and the dismantling of the free market, 
ending in the total destruction of individual economic and personal freedom.
To be continued next Tuesday.....

Thank you again for your attention...

The Discussion

[13:20] herman Bergson: I can't help hearing "Making America great again" here
[13:21] herman Bergson: The floor is yours....
[13:21] herman Bergson: This about the question:Who controls the economic processes....the government or the free market
[13:22] Particle Physicist Bejiita (bejiita.imako): and Hayek is thus the free market version if I get it right
[13:22] herman Bergson: Keynes put a lot of responsibility on the government
[13:22] herman Bergson: yes Bejiita....
[13:22] CB Axel: I can vote on the government. I have little to no control over the free market.
[13:23] herman Bergson: any form of, education, production leads to tyranny
[13:23] Particle Physicist Bejiita (bejiita.imako): is this the same as this privatizing craze of railway, schools ect we see everywhere?
[13:23] Particle Physicist Bejiita (bejiita.imako): railways
[13:23] herman Bergson: Yes
[13:23] Alarice Beaumont: for me this is today a little too much
[13:23] Particle Physicist Bejiita (bejiita.imako): we hand them to the free market
[13:23] herman Bergson: Don't worry Alarice
[13:24] herman Bergson: The debate in the 20th century was...who orders what..?
[13:24] herman Bergson: Does the government set limits to food prices for instance....
[13:24] Particle Physicist Bejiita (bejiita.imako): but as i get it its centralized (government) vs non centralized (free market)
[13:24] Particle Physicist Bejiita (bejiita.imako): something like that
[13:25] herman Bergson: or is the price subject to supply and demand on a free market
[13:25] CB Axel: Or private vs public
[13:25] Particle Physicist Bejiita (bejiita.imako): aaa that too
[13:25] herman Bergson: yes CB
[13:25] Alarice Beaumont: well... it seems that one needs regulation
[13:25] CB Axel: I feel that some things are too important to be subject to the whims of the marketplace.
[13:25] herman Bergson: yes Bejiita....and this is the core issue of politics
[13:25] Particle Physicist Bejiita (bejiita.imako): the problem is when everyone just screams MORE MONEY and prices shoot up and up and up until noone can afford anything
[13:26] Particle Physicist Bejiita (bejiita.imako): and everything stalls
[13:26] CB Axel: Or to the greed of the marketers
[13:26] herman Bergson: I did a whole  project on that observation, CB :-)
[13:26] herman Bergson: For that you should read Michael Sandel....check him out....
[13:27] Particle Physicist Bejiita (bejiita.imako): a few sucks out all they can from the rest, so some form of control is necessary i think
[13:27] Particle Physicist Bejiita (bejiita.imako): its about balance
[13:27] Particle Physicist Bejiita (bejiita.imako): but how to achieve the optimal balance?
[13:28] herman Bergson: yes is the belief that eventually prices, supply and demand will end up is some balance....
[13:28] Particle Physicist Bejiita (bejiita.imako): wih it doesnt
[13:28] herman Bergson: Ahh THAT is the main article of belief, Bejiita
[13:28] Particle Physicist Bejiita (bejiita.imako): look at house prices, stock market results ect
[13:28] Particle Physicist Bejiita (bejiita.imako): everyone just want MORE and MOOORE!
[13:28] herman Bergson: Adam Smith believed in the Invisible Hand...
[13:29] Particle Physicist Bejiita (bejiita.imako): no stop to it
[13:29] herman Bergson: Hayek believes in the Free Market
[13:29] Particle Physicist Bejiita (bejiita.imako): noone ever gets satisfied, they want more all time
[13:29] Particle Physicist Bejiita (bejiita.imako): never gets happy with what they have already
[13:29] Particle Physicist Bejiita (bejiita.imako): thats the problem
[13:30] herman Bergson: That is why I refered to the resemblance with religion in the previous lecture
[13:30] Particle Physicist Bejiita (bejiita.imako): aaa
[13:30] Particle Physicist Bejiita (bejiita.imako): well indeed same thing there
[13:30] Alarice Beaumont: we are used that growth is more important then keep the state we are in
[13:30] herman Bergson: The basic assumptions of economics are just beliefs about human behavior
[13:31] Particle Physicist Bejiita (bejiita.imako): true alarice
[13:31] herman Bergson: Yes Alarice....
[13:31] herman Bergson: and there is proof, that a self sustaining economy very well possible
[13:31] Alarice Beaumont: yes.. that's what I think... power and money is not the most important
[13:32] Alarice Beaumont: but people see it differently
[13:32] herman Bergson: Produce just as much as you need for consumption....
[13:32] Particle Physicist Bejiita (bejiita.imako): i have for es seen many cases that although a company goes well the VD says "NO WE WANT MORE" closes the place, sacks everyone and move to a low salary country where they treat the workers as slaves
[13:32] Particle Physicist Bejiita (bejiita.imako): and quality plummets
[13:33] herman Bergson: the idea of necessary economic growth is just a belief...
[13:33] Particle Physicist Bejiita (bejiita.imako): indeed
[13:33] Alarice Beaumont: yes.. I really wonder if we need it
[13:33] Alarice Beaumont: but all the arguments go around this one subject
[13:33] Particle Physicist Bejiita (bejiita.imako): if something goes well just be happy with what u have and keep it that way, good for everyone
[13:33] Alarice Beaumont: I mean Hayek said there were waves because of that
[13:34] herman Bergson: well ...just the log will this growth last? Is it meant to be endless?
[13:34] Particle Physicist Bejiita (bejiita.imako): it seems thats what they think
[13:34] Particle Physicist Bejiita (bejiita.imako): = impossible
[13:35] herman Bergson: Because we are no economists this is a pretty hard subject....
[13:35] herman Bergson: but it was created in the 20th century by Thacher and Reagan.....the neoliberal situation we are in now
[13:35] Particle Physicist Bejiita (bejiita.imako): in Sweden we have a saiyng "Den som gapar efter mycket mister ofta hela stycket" = The one who gapes after too much often loose the entire piece
[13:36] Particle Physicist Bejiita (bejiita.imako): but that does not seem to happen so they just continue to gape after more and more
[13:36] CB Axel: Here's a fun quote, "If we laid all economists end to end they still wouldn't reach a conclusion."
[13:36] CB Axel: I can't remember who said it.
[13:36] herman Bergson: You did CB ...just now :-)
[13:36] Particle Physicist Bejiita (bejiita.imako):
[13:36] CB Axel: lol
[13:36] Particle Physicist Bejiita (bejiita.imako): and its so true
[13:37] Anuska (anuska.loon) is offline.
[13:37] herman Bergson: and yes...that is the situation
[13:37] Alarice Beaumont: probably true :)
[13:38] herman Bergson: Till the early 70s the belief was that in situations of unemployment and slowing economic growth the government should start projects to give people jobs...
[13:38] herman Bergson: That was Keynes.....
[13:38] Particle Physicist Bejiita (bejiita.imako): ah
[13:38] herman Bergson: But it didn't work anymore in 1973-1975....
[13:39] herman Bergson: that was the moment they set the banks free.....
[13:39] herman Bergson: and started the privatization of postal services, railways, transportation, healthcare and so on
[13:40] Particle Physicist Bejiita (bejiita.imako): just as we see here in Sweden and all over the world
[13:40] herman Bergson: The new free market belief was that competition would fire up the engine again
[13:40] Alarice Beaumont: well.. that is not totally wrong
[13:40] herman Bergson: and now we see that this doesn't work
[13:40] Particle Physicist Bejiita (bejiita.imako): in the end only the ones who can afford it gets a good education for their children, only the rich get healtchare and so on
[13:41] herman Bergson: Indeed Alarice
[13:41] herman Bergson: But it isnt a universal law of nature
[13:41] herman Bergson: And that is how it is treated by the believers in the free market policy
[13:41] Particle Physicist Bejiita (bejiita.imako): cause the service is not in proority, the proority is for the owners of the schools hospitals ect to make money
[13:42] CB Axel: priority?
[13:42] herman Bergson: It was Swedish CB :-)
[13:43] CB Axel: I just want to make sure I'm understanding.
[13:43] CB Axel: No matter what the language. :-)
[13:43] Particle Physicist Bejiita (bejiita.imako): a Swedish artist made a tune about how a hospital director lived in luxury in a tax paradise while the patients were sleeping in their owh shit
[13:43] Particle Physicist Bejiita (bejiita.imako): and thats what we see here
[13:43] Particle Physicist Bejiita (bejiita.imako): in many cases
[13:43] Particle Physicist Bejiita (bejiita.imako): really sad development
[13:44] herman Bergson: Here we had one driving a Ferrari, Bejiita
[13:44] Particle Physicist Bejiita (bejiita.imako): well i bet they have a few
[13:44] CB Axel: I was curious about privatization a while back and looked for instances where it has worked. There are some.
[13:44] herman Bergson: Well, unless you still have an important question, let's get into Hayeks ideas next Tuesday...:-)
[13:44] Particle Physicist Bejiita (bejiita.imako): its wrong to live on making others live a misery
[13:45] Particle Physicist Bejiita (bejiita.imako): life
[13:45] Particle Physicist Bejiita (bejiita.imako): but they feel no shame
[13:45] herman Bergson: Yes works in the supermarket....but not in the hospital for instance
[13:45] Particle Physicist Bejiita (bejiita.imako): true
[13:45] CB Axel: I worked in Chicago for garbage pickup.
[13:45] herman Bergson: But as you see in current politics....
[13:46] CB Axel: But, yes, healthcare should not be a business.
[13:46] herman Bergson: people are is either this or compromise....
[13:46] Particle Physicist Bejiita (bejiita.imako): true cb
[13:46] Particle Physicist Bejiita (bejiita.imako): and not education either
[13:46] herman Bergson: We were in shock recently...
[13:46] CB Axel: right, Bejiita.
[13:47] Particle Physicist Bejiita (bejiita.imako): cause its about peoples future and lives
[13:47] herman Bergson: A hospital had to close because it was bankrupt..>!
[13:47] Particle Physicist Bejiita (bejiita.imako): not products
[13:47] herman Bergson: Nobody understoood, but it was a fact
[13:47] Particle Physicist Bejiita (bejiita.imako): crazy :(
[13:47] herman Bergson: yes
[13:47] CB Axel: That happens occasionally here, too.
[13:48] Alarice Beaumont: yes.. the society should do some things for free.. but astoundingly...ppl don't work good if they aren't guided and have rules and are looked after if efficiently
[13:48] Alarice Beaumont: (oh sorry... so much spelling.. think one wine too much :( )
[13:48] herman Bergson smile....
[13:48] herman Bergson: send me the bottle Alarice :-)
[13:48] Particle Physicist Bejiita (bejiita.imako):
[13:48] herman Bergson: send
[13:49] theo Velde is online.
[13:49] CB Axel: Yes. I'll just take that wine away from you and put it someplace safe. :-)
[13:49] Particle Physicist Bejiita (bejiita.imako): ill fix that (grabs alarices bottle=
[13:49] Particle Physicist Bejiita (bejiita.imako): GLUNK GLUNK!
[13:49] Particle Physicist Bejiita (bejiita.imako) whispers: mmmm that was some ttuff!
[13:49] Particle Physicist Bejiita (bejiita.imako): YAY! (yay!)
[13:49] Particle Physicist Bejiita (bejiita.imako): YEEEEEHAAA!
[13:49] herman Bergson: I better dismiss class now....!
[13:49] Particle Physicist Bejiita (bejiita.imako): lol
[13:49] herman Bergson: ^_^
[13:49] Particle Physicist Bejiita (bejiita.imako): this was nice
[13:50] herman Bergson: Thank you all again for participating :-))
[13:50] Particle Physicist Bejiita (bejiita.imako): interesting and important
[13:50] bergfrau Apfelbaum: Thank you Herman and class!
[13:50] Alarice Beaumont: lol
[13:50] Alarice Beaumont: it's white wine btw ;)
[13:50] Particle Physicist Bejiita (bejiita.imako): aaa thats tasty
[13:50] herman Bergson: ohh I like that Alarice :-)
[13:50] Particle Physicist Bejiita (bejiita.imako): mild and smooth
[13:50] CB Axel: Thank you, Herman. This is all very interesting.
[13:50] Particle Physicist Bejiita (bejiita.imako): mostly
[13:50] Alarice Beaumont: but I think a wine would be a good companion on such discussions :)