[ExI] Strong libertarianism, societal good, & suffering (was: Cephalization, proles)

[Rafal Smigrodzki]

On Tue, May 31, 2011 at 9:34 AM, Damien Sullivan
<phoenix at ugcs.caltech.edu> wrote:

> Of course, "planned economy that sets prices" vs. "free market" is a
> false dichotomy.  Taxes and subsidies for externalities don't set
> prices, they adjust prices, to help the market account for costs and
> benefits.

### The chasm between setting prices by a planner and the natural
discovery of prices by individual interaction is *the* feature that
separates whimsy from efficiency.It is a common trick among smart
leftists to pretend that what they suggest is really our good old free
market, just improved a bit, to take care of "market failure". Coase's
theorem implies that improving on free exchange by force is
impossible, unless the costs of the forceful solution are lower than
the reduction in transaction costs achieved through force. Since the
cost of allowing/supporting violence is staggering, there are
essentially no situations where rational actors would use a violent
solution to the transaction cost problem (unless for some technical
reason bargaining is impossible, e.g. we are playing single-shot
Prisoner's Dilemma games for high stakes in real life, which is very,
very uncommon).

So, taxes and subsidies never help the market, they always distort and
pervert it.

Rafal