[ExI] Ignorant fear mongering (was Re: Doomsday Oil Price: (was RIP: Peak Oil))

[Mirco Romanato]

Il 27/02/2012 18:34, Stefano Vaj ha scritto:
> On 27 February 2012 15:58, Mirco Romanato <painlord2k at libero.it
> <mailto:painlord2k at libero.it>> wrote:
> 
>     The trust in free markets and free competition is not like faith in
>     government or gods. The trust in free market is based on the assumption
>     that people do what they think good for themselves and, without
>     violence, they can not damage others.
> 
>     Market work "as there is" an Invisible Hand managing them. There is no
>     Invisible Hand, but from naive external observers it could appear so.
> 
> 
> Yes, some as evolution. But evolution *does* involve dead ends.

In fact, you want the dead enders to die.
Or, in a market economy, the losers to go broken and stop losing.


> And similarly, the fact that people do what they think good for
> themselves - or even what they are compelled to do lest they be simply
> eliminated by competition - does not prevent in the least the fact that
> the end result may well be catastrophic, eg, out of "free riders" or
> "unravelling" effects.

This is true, because humans could foresee the future with various
degree of certain, but not know it in advance.

> The possibility of such outcomes is entirely consistent with game theory
> or with classical economic theory.

The possibility of such outcome is present even if the individuals are
controlled by the government. I would say the past suggest this outcome
is more probable when governments are allowed to dictate the actions of
individuals. The individuals running the government rarely have the same
priorities and incentives as the people they rule upon.

> The best we can do is to make players to re-assess their priorities so
> that their economic behaviour is accordingly altered.

In the free market every and all actors are encouraged to re-assess
their priorities continuously. The existence of a real free market take
out the false feeling of safety that the existence of government
planning give to the economic actors.

Mirco