Question about Chrony Capitalism, and Protectionism?

[Magicman]

I got into an argument with two people who claimed that libertarianism would allow the free market to allow corporations to not regulate their products. They kept saying we NEED government intervention in the free market to regulate the products. I told them look what standardization caused like how all of our products contain poisons in them because of government relations. One thing that I couldn't argue with is I felt like I didn't know enough about property rights so I couldn't win over the argument because of that.

Can someone explain to me what would happen in a free market to regulate bad business practices?

[Acala]

I got into an argument with two people who claimed that libertarianism would allow the free market to allow corporations to not regulate their products. They kept saying we NEED government intervention in the free market to regulate the products. I told them look what standardization caused like how all of our products contain poisons in them because of government relations. One thing that I couldn't argue with is I felt like I didn't know enough about property rights so I couldn't win over the argument because of that.

Can someone explain to me what would happen in a free market to regulate bad business practices?

Consumers won't buy bad products, given a choice. And businesses in a free market will be more than happy to expose the problems with their competitor's products. Government intervention only limits choices, creates collusion, and inhibits competition.

This person's argument is based on the same old elitist fallacy: half the people are too stupid to take care of their own interests and the other half are too greedy and unethical to be left alone in the market. This isn't true, but if it was (as your opponent will believe) where exactly is he going to get the people to work in government to have the power, at gunpoint, to tell people what they can and cannot do? From the same pool of stupid, greedy, and unethical folks that can't be trusted. Oops! Government is not composed of a special race of humans.

[JuicyG]

This is a very interesting point which many people bring into a debate, being their strong point on why libertarianism would fail.

I think free market will take care of the need to regulate. This will be taken care of indirectly. Allow me to explain:

Say for example X company sells drinks. The consumers buy these products and are dissatisfied with the quality. They can stop from buying them in the future.
I`m pretty sure that private institution would arise to meet the need of securing customer confidence, similar to the rating agencies we have in RL for financial products(bonds and stocks).

A rating agency for food would give health ratings to certain products. These ratings agencies can be private companies and the food producer can opt to make deals with some of the rating agencies for their seal of approval.
If a customer doesn`t trust the approval of Z rating agencies, he`ll be free to buy products rated by the Y rating agency, one that he fully trusts.

At the moment, the government holds a monopoly on the "food and drug rating agencies". The FDA can be easily replaced with private companies that would do much better job and not serve special interests. Same goes for the FED, which can be replaced with competitors and not just 1 big government controlled monopoly, which is why Ron Paul wants to do, to open up the FED to competition.

[Wesker1982]

I got into an argument with two people who claimed that libertarianism would allow the free market to allow corporations to not regulate their products.

Libertarianism by definition is against the initiation of aggression. Fraud, poisoning food, etc. are violations of the non-aggression principle.

I don't know what would magically change about people if there were less government, but something tells me they would not all of the sudden find it acceptable to be poisoned.


Can someone explain to me what would happen in a free market to regulate bad business practices?

They would go out of business without the protection of the government.

There was a similar thread not long ago about the same thing here: http://www.ronpaulforums.com/showthread.php?341511-How-would-free-markets-solve-this-issue-in-food-regulation

You should also check out:


http://www.youtube.com/watch?v=BbIIPtLEVbA


http://www.youtube.com/watch?v=Rf2Escui9ig


http://www.youtube.com/watch?v=eNj2g2_dfkI


http://www.youtube.com/watch?v=qYVAxNqRTKY


These statist arguments can be refuted by a combination of three fundamental insights: First, as for the kindergarten argument, it does not follow from the fact that the state provides roads and schools that only the state can provide such goods. People have little difficulty recognizing that this is a fallacy. From the fact that monkeys can ride bikes it does not follow that only monkeys can ride bikes. And second, immediately following, it must be recalled that the state is an institution that can legislate and tax; and hence, that state agents have little incentive to produce efficiently. State roads and schools will only be more costly and their quality lower. For there is always a tendency for state agents to use up as many resources as possible doing whatever they do but actually work as little as possible doing it.

Third, as for the more sophisticated statist argument, it involves the same fallacy encountered already at the kindergarten level. For even if one were to grant the rest of the argument, it is still a fallacy to conclude from the fact that states provide public goods that only states can do so. ~ Hans-Hermann Hoppe

[Magicman]

Consumers won't buy bad products, given a choice. And businesses in a free market will be more than happy to expose the problems with their competitor's products. Government intervention only limits choices, creates collusion, and inhibits competition.

This person's argument is based on the same old elitist fallacy: half the people are too stupid to take care of their own interests and the other half are too greedy and unethical to be left alone in the market. This isn't true, but if it was (as your opponent will believe) where exactly is he going to get the people to work in government to have the power, at gunpoint, to tell people what they can and cannot do? From the same pool of stupid, greedy, and unethical folks that can't be trusted. Oops! Government is not composed of a special race of humans.


There argument was that the corporations could do anything and lie to the consumers so there would be no way for the consumers to know because noone is regulating a standard. Also, what would prevent the companies from putting any bad ingredients in so noone will know what there doing.

Your point makes sense that competition would not allow competitors to do that, but I'm also looking for some more points to raise, thanks for the info

[Magicman]

Thank you all you made great points.

[Acala]

There argument was that the corporations could do anything and lie to the consumers so there would be no way for the consumers to know because noone is regulating a standard. Also, what would prevent the companies from putting any bad ingredients in so noone will know what there doing.


I think the hypothetical is getting far-fetched, but lets address it anyway.

Suppose the evil business is putting something bad in their product but consumers can't detect it, competitors can't detect it, and no private rating agency (like UL Labs) can detect it, what magic powers will allow government to detect it?

[Magicman]

I think the hypothetical is getting far-fetched, but lets address it anyway.

Suppose the evil business is putting something bad in their product but consumers can't detect it, competitors can't detect it, and no private rating agency (like UL Labs) can detect it, what magic powers will allow government to detect it?

This is a great point, I'm just trying to leave any holes out of the equation. Does anyone have any great information on property rights i.e. book, video, audio, etc?

[Wesker1982]

Does anyone have any great information on property rights i.e. book, video, audio, etc?

Anything specific you are looking for?

There is a lot of information out there, it would help if you could narrow down what you are looking for. Property rights and pollution? Property rights and the homestead principle? Property rights and self ownership? etc...

[Acala]

The Ludwig von Mises Institute (mises.org) has a huge library of excellent free material.

[RiseAgainst]

There argument was that the corporations could do anything and lie to the consumers so there would be no way for the consumers to know because noone is regulating a standard. Also, what would prevent the companies from putting any bad ingredients in so noone will know what there doing.

Your point makes sense that competition would not allow competitors to do that, but I'm also looking for some more points to raise, thanks for the info

http://montgomerycountymd.gov/content/pio/news/images/ul_trademark.gif

A private company, not government enforced in any way. Look at any electrical product you have, it bears a UL tested label. Why do the companies do this? Because government makes them? No. Because they know that it signals to consumers that the product is safe, an investment in their products sellability. The more open the market would become the more prevalent this practice would be.