The redistribution of wealth that is the housing market

Does it not grate on anyone here that there is fundamental unfairness in a system that redistributes wealth from the productive poor to the idle rich? Because this is what the housing market appears to be to me.

A person on a high enough income can get themselves a mortgage, i.e. a loan, then get another person to pay off that loan by renting out the property, and at the end have a free house.

At the other end of the spectrum, a person on a low income will not be accepted for a mortgage, is forced into paying rent (often at a monthly rate that is more than would be paid with a mortgage) that pays for another persons house.

So the rich get richer by virtue of the fact they have money in the first place, and the poor get poorer because they lack the money to make money. Where are the negative feedbacks that supposedly make the market fair? Is this not just a self-reinforcing mechanism that makes a mockery of the meritocratic ideals espoused by libertarians?

I see several topics here.

  1. Is life unfair? Yes it is unfair. Some people are more talented than others, some are born into wealthy families, some into wealthy countries, some into war torn countries. The list goes on and on.

Should we do something about it? Make everyone equal in every respect, as much as possible? Should we shoot all professional athletes in the kneecap so that they are not much better at sports than someone in the wheelchair olympics? Why should they make so much money for just playing games?

Should we throw acid in the faces of the pretty girls, so the ugly girls have an equal chance to get married and be movie stars?

Should we perform a lobotomy on Gary Kasparov so he won’t be superior in chess to everyone else?

  1. Here is an interesting question. If one can get more money renting a house than setting up a mortgage on it [which is certainly true at times], why don’t the banks all forget abut mortgages and become landlords? Banks hate when they foreclose on a house. Why? They can be landlords now.

  2. Is it guarenteed that the rich get richer? Do they never lose money? But yes, certainly they have more opportunities to get richer. That’s why people work hard to get rich. It’s not just for the caviar.

But I disagree with the second half, that the poor get poorer. The poor can get richer, too. In fact they have been, big picture. All the poor people I know have cars. Was that the case in 1920?

  1. Can you provide a link so I can understand what you mean by “negative feedbacks that make the market fair”? The fairness of the market is that nothing [ideally] is done with violence. Everything is purely voluntary. And reading AE shows that this system will make everyone wealthier.

The opening post is a huge disappointment. I thought he was going to talk about how it is unfair that the government bailed out homeowners (mortgage holders) via the Wall Street bailouts by redistributing purchasing power away from the people who didn’t make mistakes and giving it the people who did make the mistakes.

1. Is life unfair? Yes it is unfair.

I’ve never understood why stating ‘life is unfair’ is an argument for keeping it that way. There was a time when no law existed against murder, and that was an unfair situation. Did anyone claim that nothing should be done because “that’s the way it is”?

Some people are more talented than others, some are born into wealthy families, some into wealthy countries, some into war torn countries. The list goes on and on.

You make the assumption that (1) fairness is the same as ‘equality’, and (2) ‘equality’ is defined by everyone being the same. I don’t think I ever met anyone that wanted to make everyone exactly the same.

The issue I have brought up is about equal reward for equal effort. I believe it is fair for a person to get back in proportion to what they put in. The example I give about mortgages is just one example of this not happening - those who put in the most get back the least.

Should we do something about it? Make everyone equal in every respect, as much as possible? Should we shoot all professional athletes in the kneecap so that they are not much better at sports than someone in the wheelchair olympics? Why should they make so much money for just playing games?

This is just a staw man. As I mention above, I am not talking about forcefully imposing some sort of ‘equality’ where none exists.

2. Here is an interesting question. If one can get more money renting a house than setting up a mortgage on it [which is certainly true at times], why don’t the banks all forget abut mortgages and become landlords? Banks hate when they foreclose on a house. Why? They can be landlords now.

I don’t know the answer to this. I’m not sure why it is relevent either.

3. Is it guarenteed that the rich get richer? Do they never lose money?

Of course, people can lose money but so what? It doesn’t change that fact that the odds are stacked against you from the begining if you happen to be born into the wrong background.

But yes, certainly they have more opportunities to get richer. That’s why people work hard to get rich. It’s not just for the caviar.

If there was a linear relationship between effort and reward then this might be the case. The truth is that people work hard in all walks of life, and the hardest working get the least remuneration.

Becoming rich takes more than hard work, it takes a knack for manouvering yourself into a position of power. It is the systemic granting of privalege that permits the super-rich to get into that position. The result of this situation is the opposite of what you claim - people become disillusioned by the system and try less hard to fulfil their hopes.

4. Can you provide a link so I can understand what you mean by “negative feedbacks that make the market fair”? The fairness of the market is that nothing [ideally] is done with violence. Everything is purely voluntary. And reading AE shows that this system will make everyone wealthier.

When I talk about negative feedback I am referring to those mechanisms that self balance. For example, supply and demand is an example of self balancing - demand goes up, prices rise, firms enter into production to take advantage of profit, supply increases, prices reduce. It is called a ‘negative’ feedback because there are two forces at work - one that causes prices to rise, and another than negates that rise by bringing prices down.

An example of a positive feedback would be, for example, private education. If you are rich you can educate your children to higher level, in turn they will find it easier to make money and so send their own children to private shool. The wealth begets the wealth and so classes emerge that make it near impossible for people to be rewarded for their efforts.

In regards to your comment about everything being voluntary, this seems rather utopian as it ignores the potential for power structures to emerge out of seemingly voluntary assotiations. The whole is bigger than the sum of it’s parts - macro-scale effects can result that were not the intention of any of the individuals involved in the market process. These macro effects can then limit the freedoms of some individuals whilst increasing freedoms for others.

The opening post is a huge disappointment. I thought he was going to talk about how it is unfair that the government bailed out homeowners (mortgage holders) via the Wall Street bailouts by redistributing purchasing power away from the people who didn’t make mistakes and giving it the people who did make the mistakes.

I can only appologise for not meeting your expectations.

I’ve never understood why people seem to think that life can be made fair, and that the costs of attempting to do so are worth it. And even aside from that…“fairness” means someone has to decide what’s fair. Who gets to make that decision? And why is that fair?

The only way you can aim at equality and fairness is by giving some people the right to take things from others. And I shouldn’t have to tell you that what ultimately happens when you aim at equality is that A and B decide what C shall do for D. And they of course take a little bit of a commission off for themselves for their trouble. What’s fair about that?

The issue I have brought up is about equal reward for equal effort. I believe it is fair for a person to get back in proportion to what they put in. The example I give about mortgages is just one example of this not happening - those who put in the most get back the least.

And who gets to decide what effort is worth what reward? And how is this authority going to measure “effort” and “reward”?

This is just a staw man. As I mention above, I am not talking about forcefully imposing some sort of ‘equality’ where none exists.

I’m not so sure about that. You’re certainly talking about forcefully imposing something. So what exactly are you talking about forcing then?

I don’t know the answer to this. I’m not sure why it is relevent either.

It’s relevant because it shoots a hole in your whole premise.

Of course, people can lose money but so what? It doesn’t change that fact that the odds are stacked against you from the begining if you happen to be born into the wrong background.

And? You still haven’t provided any information on what exactly you plan on doing about that…and more importantly how far your prescription is to be taken. What if the only a dream a congenital amputee has is to be a champion MMA fighter? The odds are stacked against him from the beginning because he didn’t happen to be born into the right body. What sort of force are you proposing be inflicted to make this “fair”?

The truth is that people work hard in all walks of life, and the hardest working get the least remuneration.

Oh really. And how exactly do you measure “hard work”? Is there any sort of consideration taken into the number of people impacted in a positive way, the level of training and skill involved, the rarity of that level of skill, the demand and supply of that work, etc…or are we just talking about how much sweat you produce while doing it?

This sort of talk as if the completely subjective were some kind of objective measurement is just complete nonsense. All your aruging for is that you or some authoritative body gets to decide what someone’s work is worth as opposed to the market (i.e. the entire collection of individuals making their own free choices.) What makes you think you are in any position to make such a determination, much less that you have the right to do so, is beyond me.

When I talk about negative feedback I am referring to those mechanisms that self balance. For example, supply and demand is an example of self balancing - demand goes up, prices rise, firms enter into production to take advantage of profit, supply increases, prices reduce. It is called a ‘negative’ feedback because there are two forces at work - one that causes prices to rise, and another than negates that rise by bringing prices down.

Oh I see, supply and demand is great when it produces an outcome you favor…but when a man’s skills are rare and in high demand, and he receives “excessive remuneration” for work that isn’t what you deem as “hard”, that’s “unfair” and some kind of force needs to be implemented to “correct” it. Got it.

In regards to your comment about everything being voluntary, this seems rather utopian as it ignores the potential for power structures to emerge out of seemingly voluntary assotiations.

He’s talking about in a free market. Of course a true free market doesn’t exist…because people like you go around conjuring up reasons force is necessary and justified. In light of everything you’ve written here, the second part of that sentence is possibly the most ironic thing I’ve heard in quite some time.

Here is an interesting question. If one can get more money renting a house than setting up a mortgage on it [which is certainly true at times], why don’t the banks all forget abut mortgages and become landlords? Banks hate when they foreclose on a house. Why? They can be landlords now.

I don’t know the answer to this. I’m not sure why it is relevent either.

It’s very relevant, as I’ll explain. The reason banks don’t go into the landlord business is because it’s a messy, risky, dirty business. You have to collect rents month after month, with nothing given as colateral. You are responsible for repairs, for evicting tenants who won’t pay and won’t leave. There may be laws that make things more difficult for you as well. In some states you have to pay for the water and the heat whether the tenants reimburse you or not. You may have to wait months before you can evict tenants who won’t pay. Angry or drunken tenants may destroy the premises for revenge or for fun before they leave. They may rip out all the copper wire and sell it for scrap before they disapppear. Those are just a part of the crazy costly things a landlord has to deal with all the time.

In short, a tenant is a huge potential headache and big money loss to a landlord. That’s why banks hate doing it. That’s why people will only get into the business if they feel they are making enough to compensate them for possible losses and for the huge hassle involved.

The point is, the tenant is not being ripped off, or punished for his poverty, or putting in the most and getting back the least. He is entering into a contract that gives him many advantages, with many risks for the landlord.

  1. If a landlord really was charging “too much”, there would be a negative feedback to him in the form of competitors charging less.

  2. As for being rich requiring a knack for maneuvering into a position of power, this may be true in a medieval court, where wealth could be bestowed by gifts from the crown. But many people get rich in the USA by virtue of talent. Look at all the proffesional athletes, the movie stars, the best selling authors, Bill Gates and Steve Jobs and Warren Buffet, the unfairly maligned so called robber barons. These people got rich because they were good at what they were doing, which is providing something people wanted. They were so good at giving people what they want that they got rich.

  3. I don’t understand your last paragraph. What power structures can emerge from seemingly voluntary associations. Can you provide an example of this?

  4. it is true that rich people have it easier. What of it? They or their parents worked hard for their money. But to conclude from that it is near impossible for anyone else to be rewarded for their efforts, that’s a non sequitor. Poor people get paid for what they do as well. The people who became super rich in the early 1900’s in the USA were all nobodys who started with nothing. They are the more famous cases, but it happens all the time.

“Perfect fairness” is, unfortunately, an impossibility. So I consider any attempt to establish “perfect fairness” in life, and even any belief that it’s possible to do so, to be foolish beyond measure. But that’s just me.

Your second sentence contains a very leaky abstraction. Do laws against murder render murder impossible? No? Then life is still unfair.

At this point, could you please provide your definitions for “fairness” and “equality”?

“Equal reward for equal effort” implies that both reward and effort are objective values. How is that the case? As far as I can tell, they’re necessarily subjective, as are all values.

Furthermore, this notion implies that economic life is a zero-sum game. Can you provide support for it being so? To me, it’s obvious that a renter sees himself as getting more than what he put in - otherwise, he wouldn’t rent.

Please provide support for this being always and necessarily true.

Again, please provide support for these things being always and necessarily true.

I fail to see how “education”, private or otherwise, can be measured/defined so objectively. I also think you underestimate people’s ability to educate themselves about things if they’re sufficiently motivated.

How do you define “freedom”? It seems to me as though you’re mixing the “positive” and “negative” notions of “freedom” together. Why would you do that?

Also, can you explain what you mean by “power structures”? I’m confused by your use of that phrase.

Life is neither fair nor unfair. That’s the axiom so to speak one must understand before one tries to argue about social fairness.

What we percieve as fair is almost always (I am not 100 percent sure, so I said “almost”) a matter of opinion, culture, poitical ideology, upbringing etc. If this unfairness wasn’t caused by initiation of force, one can only try to “solve” this dilemma through voluntary means, for example giving his own money to the poor or giving money to amputee so that he could do an operation and have a new leg so he could become the World Champion or something.

How can someone talk about the poor, rich and fairness ignoring people who are physically or mentally disabled and has to live in a world where 95 percent of the people are “perfectly” normal? Why people advocating financial fairness forget about them as if fairness to those people doesn’t matter? Is it because “the nature” caused their “unfair state”? Or is there other reason? Some poor people are poor because of fraud, some are poor because they are lazy, some just do not care about being poor and are happy to live such life, some are poor because they had bad luck so to speak, some are poor because they are mentally or emotionally inferior and couldn’t get the “right” job or do the “right business”. There are so many reasons.

I am myself relatively poor too, even though I have an internet and live in a flat. But I don’t have a car (and don’t have intention of having it in a future, to be honest) and many many things “normal” people do. But I also know that there are people who are in much worse situation and probably are happier than I am. One can’t talk about the poor as if they are all equally unhappy about their beingness. That’s the great fallacy of those advocating social/financial fariness (aka equal oportunity to all people or something). That’s the fallacy that the government commits when it redistributes wealth through force. It takes from all people and give it some. But not all wealth, oh nooo… only the tiny fraction. All other money goes to war, wages of pliticians and other extortionists etc.

That’s one of the main reasons why so many people are poor right now. And welfare doesn’t help the case. It makes the addicts. It breeds poor people (I said it before). I even would argue that in some degree voluntary charity also breeds poor people.. but at least it is voluntary action and people feel happy giving their money away to those in need (doesn’t matter it is true or not).

I’ve never understood why people seem to think that life can be made fair, and that the costs of attempting to do so are worth it.

Who’s sayng that ‘life’ can be made fair? My claim is that particular manfifestations of unfairness are not written into the fabric of the cosmos like you seem to think. Of course unfairness can be tackled and overcome. Nothing is 100% predestined.

And even aside from that…“fairness” means someone has to decide what’s fair. Who gets to make that decision? And why is that fair?

This is a complex issue and one which would lead us into tedious philisophical corners where we all end up counting angels on pin heads. I think it’s fair to say that moral and ethical notions are a mixture of societally constructed norms and evolutionary instinct. Beyond this, my knowledge of ethical philosophy is practically zero. I don’t have the inclination to delve further into it to be honest.

The only way you can aim at equality and fairness is by giving some people the right to take things from others

Correct. Like when we take away the freedom of people to murder without recourse.

And I shouldn’t have to tell you that what ultimately happens when you aim at equality is that A and B decide what C shall do for D. And they of course take a little bit of a commission off for themselves for their trouble. What’s fair about that?

Who mentioned equality? The only equality I would be in favour of is equality of power.

And who gets to decide what effort is worth what reward? And how is this authority going to measure “effort” and “reward”?

If I am the one doing the work, I should be the one getting the returns. A landlord just usurps my wages to pay off his own debt. What entitled him to do that other than being in a privaleged position with the banks?

I’m not so sure about that. You’re certainly talking about forcefully imposing something. So what exactly are you talking about forcing then?

That people get remunerated for their contribution. The market could do this if it was ever in equilibrium, but it won’t happen by keeping a hands off approach. There are too many positive feedbacks and complex inter-relations for equilibrium to ever be established spontaneiously.

It’s relevant because it shoots a hole in your whole premise.

What do you think my premise is? And why does it shoot a whole in it?

And? You still haven’t provided any information on what exactly you plan on doing about that…and more importantly how far your prescription is to be taken

Very true. I do not have all the answers, but I do know that the Austrian school has done very little to convince me that their proposals would do anything other than lead the economy into a mire of instability. I believe that crisis is endogenous, and that inequality stems from the same mechanisms that lead to crisis.

What if the only a dream a congenital amputee has is to be a champion MMA fighter? The odds are stacked against him from the beginning because he didn’t happen to be born into the right body. What sort of force are you proposing be inflicted to make this “fair”?

You Austrians love a good straw man don’t you. If the odds of someone succeeding held back by an act of nature that cannot be altered, then this is sad but true - the best we can do is care for the disabled in a way that provides dignity. However, if the odds of someone succeding are curtailed by a system that is out of equilibrium and not prone to self-correction, then we must attempt to correct that system exogeounously.

Oh really. And how exactly do you measure “hard work”?

Bosses do this all the time, it’s how they decide who gets fired or promoted. It’s a qualitative as well as quantitative assesment that can only be made by those close to the individual and with enough information to make an informed decision.

Is there any sort of consideration taken into the number of people impacted in a positive way, the level of training and skill involved, the rarity of that level of skill, the demand and supply of that work, etc…or are we just talking about how much sweat you produce while doing it?

All of those.

This sort of talk as if the completely subjective were some kind of objective measurement is just complete nonsense. All your aruging for is that you or some authoritative body gets to decide what someone’s work is worth as opposed to the market (i.e. the entire collection of individuals making their own free choices.)

No, I’m not saying an objective measurement can be made. But I am saying that there are certain upper limits to how much wealth an individual can create, and the very fact that Carlos Slim is worth $74 Billion says to me that redistribution has taken place in order for him to attain this wealth. After all, we all have a similar physical capacity, we all have a similar inteligence, and we all have 24 hours in a day. No amount of extra effort and brains could account for him being that mmuch richer than a factory worker in China.

What makes you think you are in any position to make such a determination, much less that you have the right to do so, is beyond me.

What makes you think that the world would be a perfect place if the economy was left to it’s own devices is beyond me.

Oh I see, supply and demand is great when it produces an outcome you favor…but when a man’s skills are rare and in high demand, and he receives “excessive remuneration” for work that isn’t what you deem as “hard”, that’s “unfair” and some kind of force needs to be implemented to “correct” it. Got it.

No. You don’t get it.

He’s talking about in a free market.

The free market as self-sustaining is a myth. Your delusions of spontansous order leading to desireable outcomes are naive.

Of course a true free market doesn’t exist…because people like you go around conjuring up reasons force is necessary and justified.

Nope. The free market will never emerge on it’s own.

In light of everything you’ve written here, the second part of that sentence is possibly the most ironic thing I’ve heard in quite some time.

Ironic in what sense?

It’s very relevant, as I’ll explain. The reason banks don’t go into the landlord business is because it’s a messy, risky, dirty business. You have to collect rents month after month, with nothing given as colateral. You are responsible for repairs, for evicting tenants who won’t pay and won’t leave. There may be laws that make things more difficult for you as well. In some states you have to pay for the water and the heat whether the tenants reimburse you or not. You may have to wait months before you can evict tenants who won’t pay. Angry or drunken tenants may destroy the premises for revenge or for fun before they leave. They may rip out all the copper wire and sell it for scrap before they disapppear. Those are just a part of the crazy costly things a landlord has to deal with all the time.

So? I can pay a workman to do all that myslef. Since when does a workman require to be payed via ownership of the house I am paying for?

If a landlord really was charging “too much”, there would be a negative feedback to him in the form of competitors charging less.

Where did I mention “too much”? As for the market self correcting, this presumes that supply and demand correct at the same speed and so meet at equilibrium.

As for being rich requiring a knack for maneuvering into a position of power, this may be true in a medieval court, where wealth could be bestowed by gifts from the crown. But many people get rich in the USA by virtue of talent. Look at all the proffesional athletes, the movie stars, the best selling authors, Bill Gates and Steve Jobs and Warren Buffet, the unfairly maligned so called robber barons. These people got rich because they were good at what they were doing, which is providing something people wanted. They were so good at giving people what they want that they got rich.

I don’t deny that on a certain level there is a correlation between reward and effort. What I am denying is that this correlation is linear and universal.

I don’t understand your last paragraph. What power structures can emerge from seemingly voluntary associations. Can you provide an example of this?

The whole of the British political class is riddled with Old Etonians. They got there because they were born into privalege. This privelege gave them power to gain yet more privalege. Positive feedback as described earlier.

It is true that rich people have it easier. What of it? They or their parents worked hard for their money. But to conclude from that it is near impossible for anyone else to be rewarded for their efforts, that’s a non sequitor.

There is ‘having it easier’ in the sense that they live in nicer surroundings (which I don’t have a problem with), and ‘having it easier’ in the sense that they have more power as a result of this wealth. Disproportionate power is the key component in all of what I am saying here.

Poor people get paid for what they do as well. The people who became super rich in the early 1900’s in the USA were all nobodys who started with nothing. They are the more famous cases, but it happens all the time.

Social mobility has declined here in the UK since so-called economic “liberalisation”. This is what a hands-off approach to economics results in. Less freedom to achieve ones potential.

The problem is that house prices are over priced and that the only way you can own a house is through a bank and a mortgage. That is because the central banks have inflated the currency so much that the house prices just keep increasing. If the banks would not offer the mortgages or people could no longer get them and government stayed out of the market. House prices would come down to a more reasonable level.

I would not like to buy a house in the UK because all the houses are on such a small amount of land and the houses are so poorly constructed and very small. In the UK there are other factors that push up the prices of rental properties and a lot of them has to do with government interference in the market with schemes like keyworkers scheme which essentially is a corrupt government scheme of giving public sector workers great brand new properties at cheaper than market rates. Now there is something that is unfair. Just because the person works for the government in the UK they get to rent properties that have just been built with the help of government subsidies, only for the public sector worker to be able to rent it at below market prices. So not only do tax payers have to pay the salary of the government worker, but also subsidise new housing builds and subsidize monthly rental prices as well.

Then we have the ridiculous government housing schemes where people with no job and no house get a brand new house for free for nothing. I know many people that have received free houses from the government, this of course affects the housing market by reducing supply and pushing up prices.

The end result and the insanity of it, we have people that are relatively successful, graduates and similar that can only afford to rent a room and share a house with strangers. When at the same time the government is handing out brand new one bed room flats in great locations to its own public sector workers and in some case people on welfare.

There was also people that bought houses for £10000 from the government a few decades ago, only for them to be worth £300-400k now. Where has all that added value come from?

You did. "I’ve never understood why stating ‘life is unfair’ is an argument for keeping it that way." That’s what you said. That statement directly implies that life can be made fair.

My claim is that particular manfifestations of unfairness are not written into the fabric of the cosmos like you seem to think. Of course unfairness can be tackled and overcome. Nothing is 100% predestined.

And yet again you refuse to acknowledge the cost of whatever it is you’re actually advocating.

This is a complex issue and one which would lead us into tedious philisophical corners where we all end up counting angels on pin heads. I think it’s fair to say that moral and ethical notions are a mixture of societally constructed norms and evolutionary instinct. Beyond this, my knowledge of ethical philosophy is practically zero. I don’t have the inclination to delve further into it to be honest.

So, in other words, “you don’t know…but you assume ‘society’ will be the one to decide what’s fair, as of course that’s the only ‘fair’ way to decide ‘fairness’…tyranny of the majority I suppose.”

Correct. Like when we take away the freedom of people to murder without recourse.

That isn’t an aim at equality or fairness. That is a respect of individual liberty. Freedom does not mean you have a right to infringe on the life, liberty, or property of others. What you are talking about is doing exactly that…in the name of making things some arbitrary level of “fair”…which you’ve already admitted you have no idea how it will be determined, nor how achievable it is.

Who mentioned equality? The only equality I would be in favour of is equality of power.

Oh you mean like “one man, one vote”? Everyone gets an equal say in what is “fair”, and whatever the majority decides gets imposed on the minority? Your entire premise is a contradiction. You cannot claim to be in favor of equality of power when you promote giving some people the right to take things from others in the name of “fairness”.

If I am the one doing the work, I should be the one getting the returns. A landlord just usurps my wages to pay off his own debt. What entitled him to do that other than being in a privaleged position with the banks?

It sounds like you’re arguing against being able to rent living space. What exactly is the scenario you’re advocating?

That people get remunerated for their contribution. The market could do this if it was ever in equilibrium, but it won’t happen by keeping a hands off approach. There are too many positive feedbacks and complex inter-relations for equilibrium to ever be established spontaneiously.

So you are talking about forcefully imposing what you—or “society” or some other person or body…you don’t really know who or what—arbitrarily decides what is “fair” compensation for someone else’s “contribution”.

What do you think my premise is? And why does it shoot a whole in it?

I said it shoots a “hole” in it. And like I mentioned above, it sounds like your premise is that someone should not be able to rent out a living space he owns…but it’s a little hard to tell, since you won’t get any more specific than typical nebulous terms like “fairness” and “positive feedback” and “equal reward for equal effort”, typical of this kind of Marxist argument.

No one is paid on the “effort”. You’re paid on your productivity. And that is measured by supply and demand. All this nonsense talk about how “I believe it’s fair that someone should get back in proportion to what they put in” is nothing more than hot air. It doesn’t even mean anything.

It’s like when people say “You know what the real problem with this country is? People just can’t get along. If politicians would just get their act together, stop bickering, come to the table and roll up their sleeves and work together we could actually get things done. Why can’t they just take it down a notch and compromise and work on collective action and allow the government to get things done and create solutions for real people with real problems?”

…A whole lot of ink to say absolutely nothing.

Very true. I do not have all the answers, but I do know that the Austrian school has done very little to convince me that their proposals would do anything other than lead the economy into a mire of instability.

That’s probably because you haven’t taken any time to actually learn what those proposals are and the reasoning behind them. My guess is you’ve read a quote here, an article there, realized it didn’t jive with your egalitarian syndicalist worldview and decided it’s rubbish and figured you’d spread some of your debunked nonsense on a free-market forum.

I believe that crisis is endogenous, and that inequality stems from the same mechanisms that lead to crisis.

So, basically you believe that crisis is natural, and inequality stems from the same natural mechanisms, and therefore itself is natural. Yeah I don’t doubt that that’s what you believe.

You Austrians love a good straw man don’t you. If the odds of someone succeeding held back by an act of nature that cannot be altered, then this is sad but true - the best we can do is care for the disabled in a way that provides dignity.

Strawman? Again with this? Did you just hear that term in an actual debate somewhere and decide it sounded like a good accusation to throw in every now and then? How in the world is the example I gave a straw man? It’s a concrete example of a real world circumstance applied exactly to the framework you laid out. I used your exact words. Here, I’ll do it again:

“Of course, people can lose money but so what? It doesn’t change that fact that the odds are stacked against you from the begining if you happen to be born into the wrong background.”

So here you have basically said that the possiblity of failure, even for advantaged individuals, means nothing in the way of “fairness”, because it doesn’t alter reality such that people who are born at a disadvantage are no longer disadvantaged. And you imply that something should be done to “correct” this. And a perfect example of this is the amputee who wanted to be a professional fighter. The “odds were stacked against him from the beginning” just because he “happened to be born into the wrong circumstance”…just like you said. So again, I ask you, how do you plan to correct for these situations where the odds are stacked against people from the beginning just because they happened to be born into the wrong circumstance?

This is not a straw man. It’s asking you to follow your assertion to its logical conclusion and provide an actual resolution within your framwork. You just can’t do that so instead you decide to use whatever legit-sounding logic fallacy term you can think of and hope that kills the argument.

Bosses do this all the time, it’s how they decide who gets fired or promoted. It’s a qualitative as well as quantitative assesment that can only be made by those close to the individual and with enough information to make an informed decision.

No. Bosses do not measure “hard work”. There is no such thing as far as the market is concerned. There is only productivity.

No, I’m not saying an objective measurement can be made. But I am saying that there are certain upper limits to how much wealth an individual can create, and the very fact that Carlos Slim is worth $74 Billion says to me that redistribution has taken place in order for him to attain this wealth. After all, we all have a similar physical capacity, we all have a similar inteligence, and we all have 24 hours in a day. No amount of extra effort and brains could account for him being that mmuch richer than a factory worker in China.

And there we have it. You know the exact productive capacity of a human being and therefore you are able to judge who is making “too much money”. Because of course there’s no way Carlos Slim or Bill Gates or Warren Buffet or John Rockefeller or Cornelius Vanderbilt or Michael Dell could be smarter or more industrious or more educated or more market-savvy or more driven or more focused or more interested than a factory worker in China. No. You know exactly what a human being is worth and anyone who makes more money than whatever you decide the limit is, is cheating people somehow. Give me a break.

What makes you think that the world would be a perfect place if the economy was left to it’s own devices is beyond me.

So not only can the strawman king not formulate a response to what was actually said, he has to actually throw out the first actual strawman of the discussion. Please show me where anyone even implied anything about the world being a perfect place under any circumstance.

No. You don’t get it.

Oh well by all means, enlighten me…explain what is specifically inaccurate about that assessment.

The free market as self-sustaining is a myth. Your delusions of spontansous order leading to desireable outcomes are naive.

And yet here we are again with more claims and absolutely zero support. You should see my big surprised face.

Nope. The free market will never emerge on it’s own.

Right, because, as I said, people like you go around conjuring up reasons that force is “necessary” and justified…so therefore, yes, a free market won’t emerge on its own unless all people of your coercive collectivist persuasion either become cognisant of reality, or die out. Because you are the only reason the market is restricted and not free.

Ironic in what sense?

In the sense that you made an accusatory statement about someone else’s position that essentially characterizes your own argument.

Do we live in free market/libertarian society?

Is that a trick question?

Just wanted to point something out that has thusfar been untouched: Why does it matter?

74 billion dollars in the hands of a wealthy person has no negative impact on society. It does not hurt the Chinese factory worker, it doesn’t torture him, heck it isn’t even the source of the fact that he has to work in a factory for next to nothing.

The wealth of any individual is a function of the capital he has inherited, homesteaded, or earned. The fact that another person has some amount of some kind of currency cannot possibly harm his ability to homestead or earn captial.
Further, a persons ability to homestead, inherit, or earn capital can not possibly be harmed by the fact that another person has inherited, homesteaded, or earned capital.

Your argument is essentially that one person has inherited capital and is making productive use of that capital, therefore an injustice was done to another.
You came to this conclusion out of a misplaced value of “fairness” while neglecting the fairness of a system that allows all people to inherit, homestead, and earn capital to the best of their ability and resources at their disposal.

No, i.e. why would the market be fair, if ain`t free?

If one person owns a shitload of resources, aquired in a fiat-/regulated economy, it might make it very difficult for others to make use of those resources.

So it was a rhetorical question.

Not really, people think we live in a free market, and cant understand why the "free market" doesnt deliver.