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Source link: http://archive.mises.org/14234/capitalism-save-the-miners/

Capitalism Saved the Miners

October 14, 2010 by

A fantastic piece in the WSJ by Daniel Henninger.

If those miners had been trapped a half-mile down like this 25 years ago anywhere on earth, they would be dead. What happened over the past 25 years that meant the difference between life and death for those men? Short answer: the Center Rock drill bit. This is the miracle bit that drilled down to the trapped miners. Center Rock Inc. is a private company in Berlin, Pa. It has 74 employees. The drill’s rig came from Schramm Inc. in West Chester, Pa. Seeing the disaster, Center Rock’s president, Brandon Fisher, called the Chileans to offer his drill. Chile accepted. The miners are alive.

And there were other contributions: cell phones, socks, cables, and much more, from all over the world – innovations from the private sector. Meanwhile, Henniger writes, the US President is running around denouncing people’s “blind faith in the market.”

{ 79 comments }

Beefcake the Mighty October 14, 2010 at 8:36 am

All true, but brace yourself for counter-claims that private industry was ultimately at fault (due to lax safety precautions, etc; I don’t know the extent to which mining in Chile is state-owned, but it’s certainly not 100%).

Horst Muhlmann October 14, 2010 at 10:13 am
Matthew Swaringen October 16, 2010 at 4:03 pm

It sounds like a private company was conducting the mining operation though.

This article may warrant some level of reply. I don’t know enough about the Chilean mining industry to take that up without more research.
http://www.huffingtonpost.com/william-k-black/capitalism-would-have-kil_b_764948.html

Michael Tate October 14, 2010 at 8:41 am

And how many innovations from the public sector were used? Using that logic I could make a case that socalism saved the miners.

Beefcake the Mighty October 14, 2010 at 8:45 am

Right on cue.

newson October 14, 2010 at 7:28 pm

talking about canaries in mines, did you get the impression that sobran’s death caused any crisis of conscience in his erstwhile colleagues? i think a lot of the tributes i saw were sweated over profusely. some things are best left entombed i guess.

Beefcake the Mighty October 15, 2010 at 10:02 am

newson,

Hard to say; I suspect so, as he was too well-known a figure in conservative circles for his passing to not be recognized, however we all know what a horror show American conservatism has become so I’m sure many of his eulogists had to watch their step.

I was in fact disappointed by Tom Fleming’s comments:

“Poor Joe, he took it all too seriously. He really believed that a writer could make a difference in this world, and that by speaking truth to power he could arrest the descent of the conservative movement into cynicism, Zionism, and imperialism. When the neoconservative lynch mob went after him–liars cannot bear the truth in any form–instead of meeting them with irony and humor, he became more serious and extreme in his criticisms of Israel and of American jewry. He should have treated these nonentities with the contempt they deserve. In the end he was ridden to death, like a noble stag pursued by a pack of hounds and jackals.”

at http://www.chroniclesmagazine.org/2010/09/30/joseph-sobran-r-i-p/.

I’m hard-pressed to believe that Fleming doesn’t understand what happens to people like Sobran today, regardless of how they choose to respond to their enemies, so I can only interpret this statement here as a veiled warning to others to not to go where Sobran dared to. Sad, but like Austro-libertarianism since the passing of Rothbard, paleo-conservatism hasn’t quite been the same since Sam Francis’ death.

newson October 15, 2010 at 7:17 pm

p.c. totalitarianism.

Vlad Popovic October 14, 2010 at 9:45 am

Socialism has never created anything – it is only capable of co-option.

Horst Muhlmann October 14, 2010 at 10:23 am

Not so. Socialism has created huge piles of dead bodies.

Andrew October 14, 2010 at 12:44 pm

Great response!

Anthony October 14, 2010 at 4:29 pm

Indeed, Michael… how many innovations?

Why don’t you tell us some, because I can’t think of any.

Bad dog October 15, 2010 at 9:35 am

Tarp, Cash for Clunkers, mortgage securitization. Lots of innovations to grab power and rewards cronies.

Old Mexican October 14, 2010 at 4:52 pm

Re: Michael Tate,

Aaaaaannd . . . go!

Go ahead.

Michael Tate October 14, 2010 at 5:46 pm

Try this one out:

Quantum mechanics was developed over the course of about 27 years or so spanning continents and hundreds of mostly public universities funded by government grants. Now why is that important you might ask? Without QM, you would not have transistors or lasers just to name two things. But without those you don’t have computers or fiber optic communications. Without those two things our society falls apart.

Now is is possible that the private sector and private universities could have come up with QM? Possibly, but please tell me what private institution would be willing to invest the resources necessary on cutting edge theoretical science when the first practical invention coming from it will be at least 50 years away?

If you can come up with a convincing answer to how in the hell we as a society might ever build scientific instruments like the ITER Fusion test reactor or the LHC particle accelerator or could have done research on QM, then I will seriously have to consider the fact that the free market can do anything.

Aaaaaaannnd….go!

Keith October 14, 2010 at 7:49 pm

The Myth of Science as a Public Good
Dr Terence Kealey
http://www.youtube.com/watch?v=C_PVI6V6o-4

Michael Tate October 14, 2010 at 8:58 pm

That is a very interesting video. I’m not going to be able to watch the whole thing all at once, (I’m about 16:00 in right now). But here are a couple observations.

I completely agree with him that in general anecdotal examples are crap, especially with the invention of the web at CERN. (I thought about using that example but I didn’t for just his reason). That is something that was invented out of an existing technology that many people were using simultaneously at the time, and given enough time, somebody else (perhaps somebody working at IBM) would have invented the web instead.

This reminds me of a famous story about Marconii (The inventor of the radio) who was awarded the Nobel prize for his discovery. The funny thing though was that Oliver Lodge also discovered the radio at the same time. So this little anecdote goes to show that breakthrough inventions (like the web or radio) can be easily accomplished when there is an infrastructure underneath).

And that is the reason I used QM as my example, since it is not something that could have been assembled by a couple people from the existing basis.

But one thing I found odd, and perhaps I didn’t understand him correctly. But he seems to have claimed that when smoothed out to a 10 year period, GDP growth was linear in the USA from the early 1800s to today, but the spike in govt. spending in science that occurred around 1940 (don’t know if this is true, but I’ll give it to him) and continued to this day, did not increase the GDP of the USA. Interesting argument worth pondering.

The next argument he then makes is that GDP increases as R&D research increases, but that increase is actually proportional to private, not public R&D money and that public money crowds out the private money. (Again, I’ll give that to him.) But given that, wouldn’t in increase in public spending in science in the 1940s in the USA crowd out private investment and cause the annual growth of GDP to fall starting in 1940?

Just an observation. I’m not going to damn his thesis based on that since there could be errors in the numbers there, and in the belief that economics is damn near impossible to do empirically. I’m Hayekian in that regard so I’m still all ears.

Thank you for the link.

BTW I would love to continue this debate, possibly in a thread more suited to this topic. I see you have forums, so is it generally regarded as appropriate for a newbie to this place to post a topic there? (I clicked on the link to this blog post via a twitter friend and just found it kinda interesting)

Old Mexican October 15, 2010 at 5:33 pm

Re: Michael Tate,

Quantum mechanics was developed over the course of about 27 years or so spanning continents and hundreds of mostly public universities funded by government grants[...]Now is is possible that the private sector and private universities could have come up with QM? Possibly, but please tell me what private institution would be willing to invest the resources necessary on cutting edge theoretical science when the first practical invention coming from it will be at least 50 years away?

This is the best you could do? A question-begging assertion?

Old Mexican October 15, 2010 at 5:44 pm

And if you don’t believe it begs the question, let me explain:

“QM was investigated in most public universities.”
“So, it could not have been found in private universities.”

Your conclusion begs the question: just because most universities are public does not mean they are uniquely equiped to find new discoveries.

Now is is possible that the private sector and private universities could have come up with QM? Possibly, but please tell me what private institution would be willing to invest the resources necessary on cutting edge theoretical science when the first practical invention coming from it will be at least 50 years away?

Why would I tell you which ones? Maybe if you thought for a little that it is not universities that come up with physical concepts but scientists, and that most QM research is mostly mathematics and not through Big Ass Machinery, which could (and DID) take place in any environment and not only that of public institutions, you would come up with something better than this.

Michael Tate October 15, 2010 at 10:23 pm

You’re leaving out a couple words in your quotes. “mostly public universities funded by government grants” And if you have been in a research institution focusing on fundamental sciences, you would know that as a faculty member (private or public university) your salary does not include your research. You have to search out grants for that.

And no, I don’t think that any private citizen (or groups of private citizens) would have both enough capital and the foresight to fund fundamental sciences. I can’t see that happening. It’s far too easy to get caught up in the philanthropic praise for helping cure malaria for 3rd world countries. Quantum mechanics is not good PR.

Yes it is scientists who come up with these discovers, but tell me, who is going to fund Neils Bohr other than the state?

Matthew Swaringen October 15, 2010 at 10:36 pm

So are you saying Neil’s Bohr wasn’t intelligent enough to focus his studies in a way that would be productive both in the near term as well as in the far term? I don’t think that is a reasonable assertion. You’re just guessing, and you have totally insufficient information (given you don’t know the alternative history) to even intelligently guess what kind of developments would be possible with Neil’s Bohr working in the private sector.

I’m not saying I can do better here on knowing the alternate universe. I’m just saying if your best reason for needing a system of institutionalized violence to pay for science is that we might possibly not advance as fast in some areas…. it’s not a particularly good reason.

Ryan R. October 14, 2010 at 8:50 am

Okay, so tools developed by the private sector were used. But had the state not intervened and allocated those scarce resources (tools, labor, time) to the rescue, it is unlikely the miners would have been unearthed.

Inquisitor October 14, 2010 at 9:54 am

“Okay, so tools developed by the private sector were used. But had the state not intervened and allocated those scarce resources (tools, labor, time) to the rescue, it is unlikely the miners would have been unearthed”

…because?

Ryan R. October 14, 2010 at 10:08 am

Because it takes coercion to redirect so many resources to such a project. I’m not saying I’m in favor of the state doing so, but it’s difficult to believe the private sector would have dedicated so much time and capital to a rescue like this.

Inquisitor October 14, 2010 at 10:34 am

“Because it takes coercion to redirect so many resources to such a project.”

Pure assertion.

Beefcake the Mighty October 14, 2010 at 10:34 am

If coercion is required, why didn’t the mafia conduct this operation? Clearly, the important point is not the mere fact that states can engage in coercion, but rather the reason why they can do so: the false sense of legitimacy with which they are viewed by their subjects. But, this false sense can be corrected (eg through educational efforts like LvMI), and the logic of cooperation applies no differently to states as to markets. If the Chilean populace did not view the Chilean state as legitimate, no amount of force could command the resources necessary to conduct this rescue. Likely, the operation succeeded *despite* the actions of the state.

Colin Phillips October 14, 2010 at 10:46 am

Does it take coercion out of the barrel of a gun?
Could it not have been the coercion of a contract? Or just of a profit motive?
Let’s say that, in the absence of state control of a mine, the miners are suspicious of the evil capitalist pig owners. Then, to them, it is a good bet that sooner or later, the mine is going to come down on them, and voila: there is a market for a rescue insurance company. They have a direct incentive to save as many miners as possible, to minimise their own losses (not to mention the significant investment in prevention they would have made).

On the other hand, if miners are, due to their hard-working, anti-capitalist nature, excessively naive and trusting of their capitalist masters, your argument is essentially that government must need step in to ensure that they are cared for. What you’re assuming, here, is that, while the benevolent and certainly not in any way corrupted government cares about those miners, the citizens under the gentle guidance of those miners actually do not. If left to their own devices, they would certainly never donate to any charities or offer to help out their neighbours, or even help pay for a rescue operation. But then, why are these callous citizens voting for politicians who do not represent their selfish interests?

In fact, in the absence of a government for people to put their faith and trust into, they would work out real, meaningful, effective solutions for themselves. If even a small proportion of Chile’s population (to say nothing of anyone else in the world with access to a newspaper) cared at all for these miners, in any small way, their combined donations and offers to help would have sufficed, I assure you.

Dagnytg October 14, 2010 at 1:12 pm

Ryan,

One of the fallacies of individualism is that it is incapable of altruistic deeds. It is believed that helping others is not a value where self-interest in concerned. Not true, in fact just the opposite.

Let’s look at the drill bit owner. What is his motivation to help? No one called him up and begged for his drill bit. He offered it. Why?

a) He’s an entrepreneur, he has an ego, and he knows his product is the best. His life experience, talent, and most importantly vision (along with the talent of the people he hired) have produced this high quality product. He is compelled to offer his services.

b) Today, more people inside and outside the mining business know about his product and its capabilities. I’m sure buy orders are coming in as we speak. Perhaps even private investors are interested in future products.

c) There are huge psychological benefits to the entrepreneur and his employees knowing that they contributed to saving the lives of these miners. Knowing their hard work, creativity, and talent helped save lives is powerful feeling. Who knows how this psychological advantage will inspire new and innovative products.

d) It is a benefit to everyone involved in the mining industry to see these lives saved. People dying is not good for business.

Last, Ryan, it is inherent human self-interest to save human lives. The psychological benefits to ones ego are huge. There is nothing more powerful than knowing you are empowered with initiative (not obligation) to help and in doing so you took on the risk of failure and succeeded. The Chilean people, the mining industry, the drill bit owner and many others did what governments can’t do. Save lives. It wasn’t government that brought them together…it was self-interest.

Greg October 14, 2010 at 2:55 pm

Maybe you would require coercion to help your fellow man and to save the lives of others. Don’t make the mistake of thinking that everyone else is like you.

Michael Tate October 14, 2010 at 8:51 am

I’m not saying anything other than the logic of this piece is garbage.

Phinn October 14, 2010 at 9:12 am

The logic of this piece is simply that the beneficial effects of market (i.e., free and voluntary and cooperative) innovations and processes are often overlooked, minimized or taken for granted, even by people who are not otherwise professional liars and thieves (i.e., Statists).

Statists touts their supposed accomplishments at every turn, because it is in the nature of States to be centralized and hierarchical, and can thus portray its activities as the result of decision-making from the top down. As a result, State actors spend a lot of time claiming credit, regardless of the truth of the matter.

The State is also very good at claiming credit because it knows that it produces nothing, and is generally very weak, ineffective and fragile, but it still needs justify its existence, so it survives by relying on the art of propaganda (i.e., lies). It is the perfector of the art, and lying is its main work product. Were it not for this constant stream of propaganda (the foundation of which is the daily indoctrination of children in the myths of Statism), the State would collapse more or less overnight.

Greg October 14, 2010 at 2:59 pm

You already said something else a few posts up from here. Liar.

Michael Tate October 14, 2010 at 5:46 pm

busted

Thomas Egebak October 14, 2010 at 8:55 am

@Michael Tate

In that case, allow me to prevent you from that, by clarifying the original post. There are plenty of socialist societies the world over and none of them had or offered the required modern mining technology.

Btw. If the State takes over the universities and research labs, and these still produce innovation, then that most certainly not something one could credit the state for. Public innovation is not public, unless the market could not have produced it itself.

Michael Tate October 14, 2010 at 9:12 am

Again I think you have major problems with your logic. Its reversable. For instance.

Btw. If the private sector takes over the universities and research labs, and these still produce innovation, then that most certainly not something one could credit the private sector for. Private innovation is not private, unless the state could not have produced it itself.

The argument I think you are trying to make is a difficult one, because there was a very large multinational undertaking, and no matter where you look there is going to be some aspect of the state that has some sort of positive impact.

IMO its the exact same flaw with the pencil story. I think this would have been a much better article if you just said the private sector was a huge help, not that it saved the miners.

Inquisitor October 14, 2010 at 9:57 am

Yeah, good luck for the state to actually turn these “innovations” (btw, the definition of innovation has connotations of marketability, with which the state has fuck-all to do, being a not-for-real-profit institution) into marketable propositions that efficiently satiate consumer wants. The government can pour resources into “innovations” and advance research… however, it neither proves it is economically efficient or that it is not, in turn, taking resources form other possible research opportunities, each in turn more lucrative.

So please, let’s not give the state any more credit than it is due.

Greg October 14, 2010 at 3:01 pm

21 minutes prior to this post, you posted saying that you would say nothing else. Why can you not stay committed to your own words?

Old Mexican October 14, 2010 at 4:59 pm

Re: Michael Tate,

If the private sector takes over the universities and research labs, and these still produce innovation, then that most certainly not something one could credit the private sector for.

Your above assertion makes no sense.

Private innovation is not private, unless the state could not have produced it itself.

This is circular thinking. Like saying “The sky is blue but only because it ain’t red…”

Michael Tate October 14, 2010 at 5:47 pm

That circular logic was exactly my point. Look up to Thomas Egebak’s post.

Laura October 14, 2010 at 9:12 am

People from all over the world worked together to make this happen. People of all different ideologies, and I think that is the most beautiful lesson of this ordeal. If we set aside our petty differences, we can do great things.

Hugo October 14, 2010 at 10:09 am

We can set aside our petty differences only if there is no gun around. That’s why the only option is Liberty.

Nelson October 14, 2010 at 9:18 am

Hooray for free market Capitalism and its technological advancements! And for the public universities that trained the Engineers that invented them!

Depressed October 14, 2010 at 9:30 am

I went to a public university and I am a terrible engineer. The best ones I know never even considered going to a state school.

Vlad Popovic October 14, 2010 at 9:51 am

I paid a lot of money for a private university engineering degree – worth every extra penny.

Nelson- even if the public sector does manage to accomplish anything, it is Capitalism that provided the funds, so Hooray for Capitalism is still the more correct statement

Greg October 14, 2010 at 3:04 pm

How do you know that the engineers that invented the technological advancements went to pulbic universities?

Michael Tate October 14, 2010 at 5:49 pm

Bumper-sticker arguments won’t work here. Private Universities train engineers too.

Luke October 14, 2010 at 10:37 am

Of course, we will be told that the evil “mining industry” due to its “lax regulations” and “terrible workplace conditions” is what causing the calamity. Sheessshh…. these Statists are so one track anyone can write the script!

Martin OB October 14, 2010 at 10:51 am

I think this is first and foremost an argument for techonology. But of course, technophobes and radical environmentalists can say that the miners had no business down there to begin with.

In the economic realms, more than free-markets, the winner here is international cooperation and “free trade” (international commerce), against otherwise free-market, but protectionist positions. Socialists and left-liberals do not accept the premise that the free market brings more prosperity, so they won’t be impressed by this example. They will say it would be cheaper if all those technologies were handled by the state.

Small Soldier October 14, 2010 at 11:20 am

This situation was an epiphany moment for me. I was in college in a political philosophy class years ago, and the class was examining the Hobbesian “state of nature,” “natural law,” and the “social contract.” When after the class had finished reading Hobbes’ Leviathan, the class was to read a fictional case vignette written in 1949 by law professor Lon L. Fuller called The Case of the Speluncean Explorers in which 5 cave explorers are trapped in a cave and could potentially face their demise by dehydration/starvation. In addition, they are cut off from society and the binding “social contract.” The explorers then turn to “natural law” and choose cannibalism of one of their members to extend their chances of survival. Eventually the remaining 4 members were rescued by the State at great economic cost (including loss of life of a couple of rescuers). However, the State held the members accountable to the “social contract” and deemed that they would face the legal challenges for “murder” as deemed by the State. The remainder of the story is the court proceedings and the individual arguments that each of the justices made. However, they were still found guilty of murder and sentenced to death. Moving to the incident in Chile, one finds that through the evolution of entrepreneurship; the outcome was quite different than that of the The Case of the Speluncean Explorers. However given that the State was involved in this Chilean incident, how would the State of intervened should the outcome turned similar to The Case of the Speluncean Explorers such as a technological failure or the trapped miners turn to “natural law”? I suspect that the State would seek “justice” in the name of the binding “social contract.” All hail the State!!!!! http://www.nullapoena.de/stud/explorers.html

Gil October 14, 2010 at 10:20 pm

If your home was trashed and looted in a large-scale riot and the Evil State did nothing because “the circumstances had changed” and “the Social Contract was invalid for that period because the State was inoperable for that period” then would you accept you had no recourse against the looters and they get to keep what they stole?

Fallon October 14, 2010 at 11:21 am

It must be admitted that relationships based on slavery, status, taxation and coercion still form a division of labor. It is the inferiority within these relationships relative to free labor, property and the market that economics stresses. In everyday language the lines seem blurred and aggregate descriptors like ‘mixed economy’, ‘welfare state’ and ‘public school’ are conveniences, but a closer look shows demarcations. Where there is market there is market. Where there is slavery, slavery. The empirical task, daunting, is to sort through all of the relationships and parcel out the distortions, displacements and interventions wrecking hampering economy. E.g., a specialized drill manufacturer could sell on a market, but have its internal books distorted by fiat money and government regs; it may be selling to organizations mired in corporate welfare and status granted unionism too. The question then gets back to, and never really left, the quality of a priori reasoning.
An analogy. Looking at inked words on paper under a microscope reveals that what was perceived as solid color from far away (like slavery, mixed economy, welfarism), actually reveals white splotches within the black. Is it too much to make this presumption?

Ryan October 14, 2010 at 11:22 am

In conservative circles, NASA is getting the credit. Anything to shore up that old canard that if it weren’t for the innovations of the space program, we’d be living in the dark and gnawing on our own bones.

http://www.dailytech.com/NASAdesigned+Fenix+Capsule+Rescues+Trapped+Miners+in+Chile/article19875.htm

But what did NASA the organization have to do with it, besides being the beneficiary of some very smart engineers and other crucial resources redirected from the market through the use of political force?

I have to wonder if this is a promotion designed to mitigate the PR damage of the NASA Muslim outreach project to the reactionary conservatives.

Fephisto October 14, 2010 at 12:20 pm

Jesus. O.k., bad logic, so what? Jeff isn’t making a huge culminating whammo argument for markets and against socialism here (see Mises’ Socialism for that). He’s just giving us an explicit example of where it does, with a beautiful happy ending.

Stop being so pessimistic. Some people’s lives were saved, hooray!

Stephan Kinsella October 14, 2010 at 2:45 pm

No offense, left-libertarian attackers of “capitalism” and “corporations.”

Alexander S. Peak October 16, 2010 at 3:04 am

No offence taken. While I have ultimately decided that I do not wish to call myself either a proponent of capitalism or of socialism (since both terms are so boggled with so many contrary definitions), I can recognise a good story when I see one. It’s clear enough, from the context, that this is not meant to refer to state-monopoly capitalism, or what DiLorenzo calls crony capitalism, but rather to something that we as left-libertarians oughtn’t have any problem with, regardless of how we might feel about the label itself.

Cheers,
Alex Peak

Salvador October 14, 2010 at 2:55 pm

They survived, initially, because of government mandated regulations for the construction of a mine that include the creation of a “safe haven” in case of a collapse. Without that mandate, the miners would have died.

Ty October 14, 2010 at 3:04 pm

Please provide proof that so called “safe havens” don’t exist in the market.

Greg October 14, 2010 at 3:09 pm

Because clearly your assumption that no private firm would create a safe haven (or something similar/better) is true. Thank heavens the government provides water pipes to my house, or I’d die of dehydration.

Salvador October 14, 2010 at 3:30 pm

It is a fact that government regulations led to the creation of a save haven and saved these miners. Therefore, statism saved the miners. Capitalism only helped out later. This is not an assumption, this is a reality. If you wish to challenge reality, then it is up to you to find the proof.

Inquisitor October 14, 2010 at 3:41 pm

Prove. That. This. Would. Not. Occur. Absent. Gov’t. Intervention. Or. Get. Lost.

Old Mexican October 14, 2010 at 5:01 pm

Re: Salvador,

It is a fact that government regulations led to the creation of a save haven and saved these miners.

And government is populated by such clever and sage individuals that they came up with that idea by themselves!

Not.

http://virtualminexpo.com/RefugeChambers.htm

Greg October 15, 2010 at 8:23 am

So by your logic, the state saves me daily from dehydration, since it is government pipes that bring water to my house, and starvation, since I drive on government roads to get food. It is a miracle that I’m even here today, considering my ancestors had no such guardian angel to provide for their basic needs.

Alexander S. Peak October 16, 2010 at 3:25 am

Dear Salvador,

I will note in advance that I haven’t studied the case of the miners in detail, so I cannot say with certainty to your claim. But, I think it interesting that government regulations are necessary a form of salvation. Surely, you must admit and agree that government regulations may also be, assuming they play any role at all, the reason why disaster struck.

Let us consider this thought experiment. Let’s say there is a government that calls it self Chilltopia. And let’s say there is a company located in the geographic region controlled by Chilltopia called Minplus Industries. In a purely free market, Minplus would only have limited liability with those individuals who have contractually agreed to limit Minplus’s liability; it would have no limited liability in its relations with others. Likewise, Minplus would have certain incentives to make sure that a reasonable degree of safety is provided to its employees, lest it might run the risk of losing its best labourers to another company and thus not profit as highly as it could. So far, reasonable, right? Now let’s say the rulers of Chilltopia decide to enact various regulations. One thing they do is limit Minplus’s liability to all persons, not just to those with whom Minplus has contracted. As I’m sure you will agree, this government regulation will lead Minplus to taking greater risks than it otherwise would. Let’s also say that Chilltopia enacts other economic regulations which ultimately have the unfortunate effect of discouraging competition. Minplus has the resources to jump through the loops set up by Chilltopia, but a small start-up does not. Thus, Chilltopia’s regulations effectively either give Minplus a monopoly, or creates an oligopoly where Minplus is one of the few companies in that field. Thus, Minplus doesn’t have to compete against very many other companies for the acquiring of good labour, and thus lacks the sort of incentive to provide the sort of safety that it would provide were it in a truly free market. Again, this sounds reasonable, no?

Whether, and to what degree, this played a role for the miners in Chili, I know not. But I do think this illustrates that state-imposed safety regulations do not necessarily make workers safer than they’d be in a truly free market.

Respectfully yours,
Alex Peak

Salvador October 16, 2010 at 9:19 pm

Thanks for the well-thought out reply. Unfortunately, it’s in the interest of a corporation to limit the liability just as you said. Were we in a free-market anarchy, perhaps things would play out as you say. However, this “truly free market” is nothing more than a theoretical construct. In the real world, where power can be abused, regulations are needed to balance this power out. It’s not ideal, but it’s necessary so that the distortions are at least “symmetric”. Free-market anarchy appears to be some kind of a mathematical singularity with no way of getting there from the world of states in which we live today.

Bruce Koerber October 14, 2010 at 4:20 pm

Will Chile Extend Its Celebrations In The Direction Of A Better Society?

The test will come now. Will the Chileans celebrate the decisions of their President to find solutions without government intervention? Will that translate into a trend towards a classical liberalism society? Will the education process continue and will it be freed from the lies of socialism and Keynesianism?

Mrhuh October 14, 2010 at 7:54 pm

What I though was interesting was that the head supervisor was the last one out, making sure that the others were safe first. But of course, capitalism creates an evil managerial class. Also, I wonder if the constant giving thanks to God made a lot of newscasters a little squemish?

Enjoy Every Sandwich October 15, 2010 at 5:18 am

Eeeee, this has angered our statists. The State is a jealous god, and will not share credit with anybody or anything.

Kirkland October 15, 2010 at 6:34 am

Pardon if incorrect, but a cursory perusal of the thread never mentioned the State’s singular motivation for innovating and developing anything – War. And even then, places like the Soviet Union (hardly free-market) used competing bureaus to enure the design of relatively better and more efficient goods, even if the profit motive was merely avoiding the gulag (which even then wasn’t a guarantee.)

In less command-oriented economies, ther State harnesses free-market production means to turn out what it wants. Short term profit gain (via borrowing against the future to pay now) is certainly in the mix, but patriotism/nationalism and ego also play parts. Think “Henry Kaiser.”

The difference is that there are also innovations coming along, free of State midwifery, that may or may not be used for war, and are developed and sold regardless. An interesting exercise would be to see how many daily-used consumer goods came from wartime technological leaps.

So, when it comes to the question of “What innovations have emerged from the Public Sector,” the answer is “What war was being fought at the time?”

Again, if I missed where somebody else pointed this out, mea culpa. But at that, it bears repeating.

Tony L October 15, 2010 at 10:22 am

Following that logic, private weapon companies are selling their products to revels and drug dealers too, so they are killing tousands of innocent people aroung the world as well

Wonde October 15, 2010 at 11:38 am

I am really disappointed by all this irrational hatred towards the state. Who would build the roads, bridges, and the national army that benefit all of us without descrimination unless some centrally organized entity–the state–uses coercion to mobilize reources through taxation?

Beefcake the Mighty October 15, 2010 at 12:39 pm

Who gives a shit what you’re disappointed over? Go cry somewhere else.

Wonde October 15, 2010 at 1:49 pm

Crying is not in my lexicon. I cannot apologize for all humilation that my ancestors brought to yours when trying to plunder our resources in the name of capitalism-imperialism-colonialism?

Beefcake the Mighty October 15, 2010 at 2:12 pm

Well, at the very least you can apologize for being a complete tool.

Wonde October 15, 2010 at 3:31 pm

Did you bother to look at the map of my place to the right of my comments? Have you ever heard or read of sometning like the battle of Adwa? That is where you find the very maverick people who have never been tools for the capitalists-imperialists-colonialists? Maybe am rubbing some painful salt over your past wounds…but I must remind you that is where i belong to

Greg October 15, 2010 at 12:41 pm

You’re right. Before the state came along, there was no such thing as a road or a bridge or an army.

Wonde October 15, 2010 at 1:42 pm

When the state collapses the harvest will be present day Somalia.

nate-m October 15, 2010 at 3:55 pm

Yes. Somalia is a good example of what happens in the aftermath of a populist democratic government turned socialist turned fascist. It was not until the anarco-capitalist system took over before the country began it’s recovery from that particular series of political disasters.

It’s a bit ironic (or not) that a country that is was unable to have a government forced on it by the United States (see: “blackhawk down” incident) and the current puppet government (TFG) backed up by the military of the neighboring countries is showing no sign of life it still has just about the best telecommunications industry in the region and security of businesses and individuals has actually improved since the socialists (mostly) left.

King George October 16, 2010 at 9:22 pm

Why is a private militia basically required to visit it? You can safely visit the state of Senegal, or South Africa for that matter. When Somalia is safe to visit by tourists, then and only then can it be considered a successful example of anarchy.

JMH October 15, 2010 at 10:27 pm

If there is a market for it, private finance can fund it. There probably would not be a very large market for quantum physics research, but some big companies like Intel would certainly like to be behind any research in that area, especially if they weren’t sued by the government constantly.

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