Free Market Notes

– A free market is illusory in the same sense as a free society.

– the state has authority over markets in its jurisdiction.  It will enforce or enact a certain ordering of society and consequently markets, which is a certain conception of the common good.

– the emphasis on voluntary cooperation is good, but misses the point when put in opposition to state “coercion.” The state enforces voluntary cooperation by restricting extortion even if voluntarily agreed to among other things. This is force and coercion in markets, not to mention coercively enforcing contracts voluntarily entered.

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Modernist Investing

Part of the attraction of algorithmic investing is that it abstracts from the essence of the business. In this sense it is particularly Modern. The only concern is the change in stock prices or some other metric. It attempts to relieve the human being of his real authority (and consequent obligations) as an owner of real property. It much like the desire to abandon human authority to machines in politics.

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An Argument against Representative Government

I’ve been thinking about my argument against universal suffrage and it seems that a very similar logic can be applied against representative government.

First, let us take representative government to be a form of government where representatives seeks to enact the desires and preferences[*] of those that they represent. Note the reliance on desires and preferences. Here I don’t take up the consideration of a representative government that seeks to enact the common good of those represented even against their desires and preferences.

As in the prior argument, a representative does not seek to enact the preference of the insane or small children for the reasons that their preferences are underdeveloped, uninformed and generally motivated by emotion and passion. The representative does not in fact even represent these segments of his constituency and does not even seek to do so.

In issues of national concern (though lesser levels as well), men in general do not possess sufficient knowledge to be informed in their preferences or have anything other than an emotional attachment to particular preferences.

Therefore, a representative by the same logic should not represent men in general, because their preferences are grounded in the same ignorance and emotion of children. Yet, this largely undermines the logic of representative government and the ground by which the representative acts. Therefore, representative government is practically a contradiction in that government is ordered to enact some ordering of goods, but representation provides no basis to enact some ordering of goods.

[*] Given the diversity of preferences of any group, this is generally impossible according to Arrow’s Theorem.

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Just Punishment and Just Price

Justice is grounded in a certain equality, that is giving what is due according to a nature. There is an equality between the nature and what is owed it and what is given. This equality establishes justice.

In retributive justice, there is not a clear mathematical equality. A murderer may be punished by execution or years in prison. A murderer may get 30 years and this may be just. However, 30 years plus or minus one minute is not unjust and it is certainly within the realm of good judgement that plus or minus 10 years may still be just.

Yet, we recognize that the “punishment should fit the crime,” that is there should be a proportionality between between the crime and the punishment or a crime is due a degree of punishment consistent with the nature of the crime. Execution for a white lie is certainly unjust and two hours in a holding cell for murderer as well or even a fine of $5.

Similarly when we consider an exchange. There is not a mathematical equality of price that establishes justice, where more or less is unjust. A dollar for a loaf of bread may be just, but 99 cents or $1.01 is not unjust.

However, there must be a sort of proportionality between what is given and received in the objective worth to men (or economic value) of each. There are certainly instances where this goes astray, but there is a certain equality that is reached in exchange.

Considered individually, we may speak of each benefiting from the exchange and indeed neither would engage in the exchange if they did not benefit from it. However, taken together we achieve a certain equality. Alvin desires B more than A and Bob desires A more than B. Between them there is a certain “intersection” of desire of the objects that establishes a sort of equality or proportionality. While both individually benefit from the exchange, the exchange taken as a whole indicates the worth of A in terms of B or B in terms of A.

One certainty about this is that justice presumes a correct estimation of the objective value of the object and thus well ordered desire. There may be an “intersection” of desire where the desire is disordered, but justice cannot be established upon error and evil.

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Good/Evil Curve

Whatever a supply/demand curve reveals about economics it is not liciety even of “(sub)optimal” economic situations.

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Justice in Exchange

In an exchange there must be an equality to ensure justice. Now modern economics suggests there is always inequality in that both parties engage in the exchange in order to receive a greater benefit than what is given.

In the exchange A is received and B is given. My desire for A is measured in units of B. The desire of the seller for B is measured in units of A. The equality that is achieved for justice is that units of A are equal to units of B in some fashion. This is seen in that the exchange takes place and men do not suffer an injustice willingly.

However agreement of price between parties is insufficient to establish justice since justice is real and objective. This is seen in cases when the price becomes unhinged from the reality of the objective value of the things.

This occurs manifestly in cases where a non-existent is sold or something is charged for twice as in usury. Selling the non-existent bridge is certainly deceitful but also unjust in the attempt to exchange for nothing. Moreover there is a clear disorder in the desire of the buyer in that he desires nothing or rather something simply fictional.

Also in the case of price gouging the price becomes unhinged from its objective worth. Since one does not suffer injustice unwilling they agree to it out of necessity rather than an concordance of wills.

Another example is a superstition when a man thinks something is more power than it actually is. He will pay more than its actual value and to take advantage of this superstition is unjust.

This also suggest the absurd prices charged at movie theaters and baseball stadiums are also unjust in that they are unhinged from reality.

In these examples there is a disordered desire in various respects and in either party.

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The Low Man

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