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- Path: sparky!uunet!mcsun!uknet!newcastle.ac.uk!turing!ncmh
- From: Chris.Holt@newcastle.ac.uk (Chris Holt)
- Newsgroups: alt.philosophy.objectivism
- Subject: Re: Evidence vs Faith
- Message-ID: <C17MA2.CHp@newcastle.ac.uk>
- Date: 21 Jan 93 15:13:14 GMT
- References: <C140Lo.C03@newcastle.ac.uk> <C14CK1.1CM@usenet.ucs.indiana.edu> <1993Jan20.001110.23983@tcsi.com>
- Organization: University of Newcastle upon Tyne, UK, NE1 7RU
- Lines: 58
- Nntp-Posting-Host: turing
-
- robert@kohlrabi.tcs.com (Robert Blumen) writes:
- >> Chris.Holt@newcastle.ac.uk (Chris Holt) writes:
- >>
- >> >Hee hee. Then why do I have such faith in the free market, in
- >> >limited circumstances?
-
- >One is always reading about "faith in the free market"...
- >Faith is usually taken to mean something beyond or outside of reason.
- >People who have religious faith may offer various proofs of the existence
- >of god, but their belief comes down to deciding to believe and what to
- >believe for no reason at all.
-
- Okay, it was a shorthand for "I believe that the free market model
- used for predicting behaviour in various economic spheres leads to
- results that correspond with observed data, so that its predictions
- offer the best hope we have of estimating the future." Faith in
- the sense that we talk about faith in scientific theories.
-
- >Most people I have met who hold free-market views, since they are in an
- >intellectual minority, have had to exhaustively research these ideas inside
- >and out, to convince themselves no less, and to have any chance to convince
- >others. But many people who hold sort-of-wishy-washy liberal-socialist
- >views simply absorb them from the surrounding environment without much
- >thought (not to say that there aren't many very well informed and well read
- >liberals and socialists,too...)
-
- Surely there are knee-jerk liberals and knee-jerk socialists, just as
- there are knee-jerk free-marketeers. All of these people are
- attracted to their theories because of upbringing, or because the
- theories are often over-simplified, making them easy to understand.
- The interesting part is that there *are* intelligent and well-informed
- people who adhere to all these positions. This suggests (unless you
- believe you hold a monopoly on truth) that the evidence supports
- more than one interpretation, which suggests that different models
- may be applicable in different circumstances. The challenge then
- is to characterize the situations in which a particular model offers
- a useful approximation.
-
- The free market is fine when it is easy to determine the quality of
- a product (so the costs of that determination can be neglected), and
- when there are enough suppliers and buyers that competition is
- genuine, and the process of approaching the equilibrium point is
- swift (and may be neglected). It is much less useful as a model
- when there is a significant time delay between the given transaction
- and the determination of quality (e.g. in education, the effect
- of a given teacher may not be apparent for up to 5 years), because
- the feedback loop between product quality and reward is so attenuated.
- It is much less useful when there is a systematic bias (e.g. for
- historical reasons) that slows the approach to equilibrium (e.g.
- the persistence of racism when it is not economically advantageous).
- It is also less useful when dealing with the question of public
- goods, such that the market leads to underproduction because of
- the dreaded free riders. Hence my reference to limited circumstances.
-
- -----------------------------------------------------------------------------
- Chris.Holt@newcastle.ac.uk Computing Lab, U of Newcastle upon Tyne, UK
- -----------------------------------------------------------------------------
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