Comments on: How hockey sticks explain the relative attractions of statism and of free markets A blog for people with a critically rational individualist perspective Tue, 06 Oct 2015 01:22:09 +0000 hourly 1 By: gene berman Sat, 02 Oct 2004 17:23:06 +0000 I quite understand that this discussion of the unsatisfactory nature attending government provision of goods or services is somewhat casual, “seat of the pants,” and that, in this wise, that the hockey stick may be a fair approximation. But, as explanation, it falls far short and is actually useless in any attempt to persuade those accustomed to the quo of the status. It’s not even possible to assert, with any claim to validity, that, at the outset of such provision, that impressions as to “satisfactoriness” can be made.

In the sphere of the market, precision in drawing conclusions as to “satisfactoriness” is not only continuously possible but actual. The easiest indicator is, simply, whether the product sells on the market for a price which returns the costs expended plus a sum spoken of as “profit.” And, of course, it is possible for a state-run enterprise to produce similar data and to draw similar conclusions–but which may be entirely erroneous.

The difference is that the private enterprise (and any of its parts, possessions, and properties) have their own
prices on the market; not only are there routine, periodic assessments of the value of these components but the entirety may be priced daily in “shares” on the stock market. It is only by reference to these numbers that an adequate comprehension may be gained as to whether the enterprise is profitable or not.

Economists describe this as the market “for goods of higher orders.” And, of course, this is just what state enterprises cannot have. Thus, they are at all times deprived of the data which would inform them of whether they are producing profit or loss, the latter being the signal that they are misemploying or misallocating assets (whether they had originally acquired such assets on the market or by expropriation). In the absence of such data, success is rare and then only occurs accidentally. What is (relatively) easy for even a barely-numerate street vendor is virtually impossible to the wisest and most ably-assisted of government managers or planners.

By: limberwulf Fri, 01 Oct 2004 23:13:27 +0000 John Harrison,
your comment made me realize that a part of the reason that leftists often dont see the long term future/historical benefits to the markets is the “me factor.” When thinking small-picture, the tendency is to think of how something will affect you personally. There is also a tendency to think short-term, but that is only aportion of the issue. When, as you stated: “…the downswing of the ‘hockey stick’ is usually felt by a relatively small number of people (albeit intensely – so they will protest) the eventual upswing is much larger and creates much value.” You point out that on an individual level, some are put in a difficult position.

Essentially, it gives the left a large pot of anecdotal evidence that encites emotion. The free-market side has long term payoff, which, even when proven, does not encite pity or any other strong emotions. Its like trying to have a news program that only reports good stuff, its been tried and did not do well. It is easy to see the impact of a downturn on a personal level, and to identify with it. Even tho the free market would give those hurt in the downturn great opportunity, the responsibilty to recover still lies with the individual who did so, and his heroics may inspire, but the glory will not be given to the free market.

In a way, that is how it should be, the triumphs of the individual should be attributed to the individual, not any sort of system. The short lived triumphs of a state system are attributed to the system, giving it glory, and making it an easier sell. The nature of the free market is to spread glory, power, opportunity, wealth, etc. As such, the free market is not attributed with its accomplishments, whereas the socialist system is. The tough part is attributing the negative accomplishments of socialism, and proving that it was socialisms fault. Those of us who study this closely see it clearly, but many people, even otherwise intelligent people, do not see it so easily.

By: Patrick Crozier Fri, 01 Oct 2004 22:28:05 +0000 I dunno, the main reason it’s boring (relatively) at the moment is ‘cos the same guy wins almost all the races.

But this is not the first time we have had a dominant driver/designer combination. In the Sixties we had Clark/Chapman. Most enthusiasts think that Clark is about as good as Schumacher and I have yet to hear of anyone who thinks Brawn is better than Chapman. Yet Clark only won two world championships. There has to be something else going on.

Apologies to Brian for getting us bogged down in a completely different sport from the one in the original topic.

By: Patrick Crozier Fri, 01 Oct 2004 22:21:54 +0000 I have wondered for some time why it was already so expensive and so dull.

I had thought that that was why you asked me to do a talk on the subject at one of your Fridays little over a year ago; a talk, the text of which currently graces the pages of ubersportingpundit(Link).

Obviously, I wasn’t sufficiently clear: it’s the goddam regulations.

By: Anonymous Coward #315 Fri, 01 Oct 2004 21:27:46 +0000 I think you have the hockey stick misplaced. The handle should be lying horizontal (or almost). That means, the benefits from govt intervention vanish almost immediately.

By: John Harrison Fri, 01 Oct 2004 18:13:24 +0000 I believe the Adam Smith Institute have a good approach to this very problem. First, they are very prolific producers of detailed policy proposals. Abstract ideas are a great point for discussion but someone has to work out how to implement them. By churning out a lot of ideas and explaining how they could be done there is a chance that at least some of them will find support and it makes it difficult for opponents to oppose them on the grounds that they are impossible to implement. The other successful side of the approach is to identify what might go wrong and who might oppose the policy and provide suggestions for ameliorating the immediate discomfort of those worst affected. For example, proposing free employee shares when a nationalised industry is privatised. Given that the downswing of the ‘hockey stick’ is usually felt by a relatively small number of people (albeit intensely – so they will protest) the eventual upswing is much larger and creates much value. A small share of this value can then be used to compensate the losers from the process so they can be winners too.

By: Thon Brocket Fri, 01 Oct 2004 18:12:29 +0000 “F1 will go on getting more and more expensive, and duller and duller as the years go by.”

Mounting Lewis guns, WW1 Sopwith Camel-style, might jazz it up a little. Just a thought.

By: A_t Fri, 01 Oct 2004 17:23:21 +0000 Felt i should add, interesting & insightful original post; good reading, thanks!

By: A_t Fri, 01 Oct 2004 15:06:51 +0000 Brian,

I have wondered for some time why it was already so expensive and so dull. You just told me.”

I dunno, the main reason it’s boring (relatively) at the moment is ‘cos the same guy wins almost all the races. Also, how exciting can a bunch of cars driving round & round the same track for ages be?

& Are the indy 500 etc. in the US private-run? If so, your whole theory bites the dust.

I tried, I seriously tried watching a bit of american car racing a few weeks back (the somewhere or other 300… I’ve erased most of the experience from my brain)… round & round & round the loop they go… one car edges it’s way past another one… wow! And look, there are still 200 laps to go! Makes the dullest of F1 races look like genius entertainment.

On an unrelated side-note, does anyone know we evolved these very different forms of motor racing?

By: Brian Micklethwait Fri, 01 Oct 2004 11:15:33 +0000 ananymous coward:

The reason why I chose a hockey stick (as I prefer to think of it, having played hockey at school, on grass) rather than an ice hockey stick, is that the former curves and the latter kinks, and you need a curve for this. So I think Patrick got that a bit wrong.

By: Brian Micklethwait Fri, 01 Oct 2004 11:06:04 +0000 Dave

I’m more interested in the way that many free marketeers refuse to see anything wrong, even in the short-run, with markets, or anything good, even in the short run, about state activity.

To hear some libertarians you would think that there were no costs whatever to opening up markets, and no benefits whatever to anyone of state action.

Why leftists think as they do is a whole different subject, in my opinion. Although, the short-term goodies of political action and short term chaos of markets, do explain part of it, I think.

And the inability of many libertarians to convert leftists, if that’s what it is, is partly explained by their blindness to the immediate realities (as opposed to the longer term realities) being argued about.

Shannon Love: Precisely.

By: Brian Micklethwait Fri, 01 Oct 2004 11:01:25 +0000 I should add that one of the features of state decline is that pure profit organisations, not subsidised by government(s) get out of whatever it is. This is one of the basic ways that the handle slopes downwards.

Next step? Ecclestone dies, which he has to do eventually. And then the UN (or a UN type operation, such as already runs the Olympics) takes over F1. You think I’m joking? I am, of course. But that’s ths kind of nonsense we’re talking about here.

I feel a whole new theory about the rise and decline of sports coming on.