Well ... some folks are thinking right now, maybe we should rethink some of these economic things ...
Kind of like, maybe gravity isn't all there is to Physics ... even though gravity is part of it. Kind of like Adam Smith is soooooooooooooo Newtonian.
I mean after Katrina shouldn't we have realized that we didn't have the concept of what we can expect from each other nailed down? Is national security (our military) the only thing we socialize adequately? (No, I am not saying we should run everything like the military, but can't we stop and think a little ... stuff ain't going so good, y'know?)
And yes, there is a real problem with the type of collectivizing that leads to the gulag ... but there is also the real problem of a so-called freedom that let's the rich get richer until we wind up on banana republic plantations. Folks used to understand the concept of "the butcher's thumb on the scales".
The old economics led the global financial gurus to believe they were modern alchemists who had actually discovered how to transmute lead into gold ... printing pieces of paper with complex functions that gave them real value ... aka instruments of debt and their derivatives ...
Anything could be "borrowed against" and then the document of the loan had the value of the amount borrowed. The more you could get other folks to borrow, the more value was created.
You mean, you didn't have to worry about the value of whatever it was that was borrowed against? Hell no! Just buy another piece of paper called a credit default swap (CDS) that was insurance that the other piece of paper, the instrument of debt, would have value no matter what.
But I digress ...
Back to the new economics ...
A house retains its real value if it is maintained in a neighborhood of maintained houses ... (staggers the imagination, doesn't it?)
If I let my house deteriorate, my house is not the only one that loses value.
Who then pays for the loss of value in my neighbors houses?
What if the "bank" repossesses my house for whatever reason AND the abandoned house starts to deteriorate AND the cumulative loss to the houses in the neighborhood is always greater than the loss in value of the abandoned house ...
And what if maintaining the now abandoned house would have cost far less than the either the loss in value of an abandoned house OR the cumulative loss in value in the neighborhood ...
Now, it seems rational to me that there should be some form of REAL VALUE insurance to kick in to protect the neighborhood homeowners ... so, would their forming a cooperative to provide themselves that kind of insurance be "socialism"?, or only if they did it through their government? And what if it is done after the fact, after the neighborhood homeowners realize it is cheaper to maintain the abandoned house? Is it socialism for them to cooperate on reducing their losses?
Farmers in the midwest formed cooperatives to bring electricity to areas not served by the "private" sector ... was/is that socialism?
Just asking.
From NPQ, the New Perspectives Quarterly:
NPQ | In the end, your ideas have triumphed over Marx and Keynes. Is this, then, the end of the road for economic thought? Is there anything more to say than free markets are the most efficient way to organize a society? Is it the “end of history,” as Francis Fukuyama put it?
Milton Friedman | ... "Free markets" is a very general term. There are all sorts of problems that will emerge. Free markets work best when the transaction between two individuals affects only those individuals. But that isn't the fact. The fact is that, most often, a transaction between you and me affects a third party. That is the source of all problems for government. That is the source of all pollution problems, of the inequality problem. There are some good economists like Gary Becker and Bob Lucas who are working on these issues. This reality ensures that the end of history will never come.
http://www.digitalnpq.org/archive/2006_winter/friedman.html
Interpretation: Because transactions using the medium of money ALWAYS affect a third party, there is no such thing as a "free" or "unfettered" market in terms of the customary definition of the economic term. The reason for this is the clear fact that all costs incurred in the production and distribution of goods and services are not paid for out of the monetary selling price of the goods and services ... only the reimbursement of "ownership" costs ... so what is "free" about free markets is their being free of the costs they incur to others than the legally defined owners of the goods and services for sale--sellers and buyers.
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