Free market utilitarianism.
The desired end result of a free market system for society (the goal) is the maximization of happiness.
Free markets help maximize happiness through the price mechanism.
An example.
You own an Orchard with space for 100 trees, you have 100 plum tree seeds and 100 apricot tree seeds. I am a lover of plums, I gain more welfare from consuming 100 plums than I do 1 apricot, you see me going around the local farms buying up plums, this creates an incentive for you to plant plums which in turn maximizes my happiness as the demand created for plums by my desire for them gives plums more value as opposed to apricots, so there will be a large opportunity cost imposed on you if you choose to plant apricots instead, so you plant plums and happiness is maximized within society.
This is the basis of free market utilitarianism.
Free markets help maximize happiness through the price mechanism.
An example.
You own an Orchard with space for 100 trees, you have 100 plum tree seeds and 100 apricot tree seeds. I am a lover of plums, I gain more welfare from consuming 100 plums than I do 1 apricot, you see me going around the local farms buying up plums, this creates an incentive for you to plant plums which in turn maximizes my happiness as the demand created for plums by my desire for them gives plums more value as opposed to apricots, so there will be a large opportunity cost imposed on you if you choose to plant apricots instead, so you plant plums and happiness is maximized within society.
This is the basis of free market utilitarianism.
Original post by Potterfan
(...) This is the basis of free market utilitarianism.
In your points of view, the utilitarianism of free market is intended for to satisfy your needs as customer, while the seller intend to earn money with that, so both you as customer and the seller are happy. So far, so good. But what if your needs are manipulated by advertisments or commercials to sell the goods to you which you wanted not to buy in fact? What is the utility of a free market for you, if you don't have a free will?
Original post by Kallisto
In your points of view, the utilitarianism of free market is intended for to satisfy your needs as customer, while the seller intend to earn money with that, so both you as customer and the seller are happy. So far, so good. But what if your needs are manipulated by advertisments or commercials to sell the goods to you which you wanted not to buy in fact? What is the utility of a free market for you, if you don't have a free will?
Commercials don't force people to buy goods they don't want to buy. Lets not be ridiculous. Name me one advert that has forced you to buy something.
'Free will' is an illusion, free will in my argument translates to maximizing personal utility. So the buyer of the plums is maximizing their personal utility by buying plums instead of apricots and the seller is maximizing their personal utility by supplying plums instead of apricots in order to maximize their return on investment aka their own utility.
Original post by Potterfan
Commercials don't force people to buy goods they don't want to buy. Lets not be ridiculous. Name me one advert that has forced you to buy something. (...) .
People are not forced, that is right. But commercials and advertisments are capable of creating needs. To name an example there is a customer who read an advertisment that apricots make happy what is a reason for the customer to get apricots. The customer who wanted not to buy apricots before looks for a grocery instantly to buy them. Strange example, I know. But you should consider that force is not the same as manipulation. The advertising industries are able to create needs where no needs exist. Don't underestimate their influence on a free market!
Original post by Kallisto
People are not forced, that is right. But commercials and advertisments are capable of creating needs. To name an example there is a customer who read an advertisment that apricots make happy what is a reason for the customer to get apricots. The customer who wanted not to buy apricots before looks for a grocery instantly to buy them. Strange example, I know. But you should consider that force is not the same as manipulation. The advertising industries are able to create needs where no needs exist. Don't underestimate their influence on a free market!
Who are you to say there are no needs? You have no authority to make such value judgements on behalf of others.
Original post by Potterfan
Who are you to say there are no needs? You have no authority to make such value judgements on behalf of others.
You misunderstand me. Is it so difficult to understand my point of view? What I wanted to say is that most of the needs are created by commercials and advertisments. Don't get me wrong! its okay that people are able to satisfy their needs on a free market, but most of them are influenced and that is the other side of the coin. In other words: people are a game ball on a free market.
Original post by Kallisto
You misunderstand me. Is it so difficult to understand my point of view? What I wanted to say is that most of the needs are created by commercials and advertisments. Don't get me wrong! its okay that people are able to satisfy their needs on a free market, but most of them are influenced and that is the other side of the coin. In other words: people are a game ball on a free market.
If they are 'needs' and 'wants' aka desires which the fulfillment of bring about happiness, is there any rational reason for why advertising is a bad thing? Furthermore most adverts merely.. advertise products they obviously try to sell consumers products but at the end of the day you don't act upon the majority of the adverts you watch do you?
If I understand correctly, I think Kallisto is saying that individuals' views are affected by the contexts in which they live, and individuals do not exist in a vacuum.
There are two crucial problem with OP however:
1. Externalities. An exchange between you and me might create utility/happiness for both of us, but it might create disutility/unhappiness for someone else.
2. Interpersonal relations. Your proposed scenario only really makes sense if the two of us are strangers and have no prejudices towards each other. In real life, this isn't always the case. For example, maybe one of us dislikes the other to the extent that they would never do business with the other.
There are two crucial problem with OP however:
1. Externalities. An exchange between you and me might create utility/happiness for both of us, but it might create disutility/unhappiness for someone else.
2. Interpersonal relations. Your proposed scenario only really makes sense if the two of us are strangers and have no prejudices towards each other. In real life, this isn't always the case. For example, maybe one of us dislikes the other to the extent that they would never do business with the other.
Original post by anarchism101
If I understand correctly, I think Kallisto is saying that individuals' views are affected by the contexts in which they live, and individuals do not exist in a vacuum.
There are two crucial problem with OP however:
1. Externalities. An exchange between you and me might create utility/happiness for both of us, but it might create disutility/unhappiness for someone else.
2. Interpersonal relations. Your proposed scenario only really makes sense if the two of us are strangers and have no prejudices towards each other. In real life, this isn't always the case. For example, maybe one of us dislikes the other to the extent that they would never do business with the other.
There are two crucial problem with OP however:
1. Externalities. An exchange between you and me might create utility/happiness for both of us, but it might create disutility/unhappiness for someone else.
2. Interpersonal relations. Your proposed scenario only really makes sense if the two of us are strangers and have no prejudices towards each other. In real life, this isn't always the case. For example, maybe one of us dislikes the other to the extent that they would never do business with the other.
Externalities are always present yes, but the welfare loss is often minor, the fossil fuel industry is not all industrys.
2. This seems like a very small scale issue? How much welfare would you honestly estimate to be lost from this? Seems like nit picking.
Original post by Potterfan
Externalities are always present yes, but the welfare loss is often minor, the fossil fuel industry is not all industrys.
Immigration is an externality, and a lot of people care about that.
2. This seems like a very small scale issue? How much welfare would you honestly estimate to be lost from this? Seems like nit picking.
Depends on the society. In the Southern United States, many white shop-owners refused to sell to black people for nearly a century, and even then they only stopped because the government banned it.
Original post by anarchism101
Immigration is an externality, and a lot of people care about that.
Depends on the society. In the Southern United States, many white shop-owners refused to sell to black people for nearly a century, and even then they only stopped because the government banned it.
Depends on the society. In the Southern United States, many white shop-owners refused to sell to black people for nearly a century, and even then they only stopped because the government banned it.
Border control is a matter for the state. Not firms. Whats your point?
I was referring to the UK and yes thats awful but its not exclusive to free markets, in fact its likely to be worse in regulated markets this is because regulated markets have less competition. Take the the shop owners, in a competitive market the shop owners would lose customers and revenue/profit depending on the firms objective. This would result in them losing market share, losing investment and shrinking, so there is less discrimination and less racism, more welfare to society. Some firms may even go bust.
If you want an example of this read this article by the economist
http://www.economist.com/node/12597512
it gives the case of the American financial sector in the 70s, in the 70s only one bank per a state was allowed to do business. This meant that there was very little competition between banks, there was widespread racism amongst the bank owners, when the government removed regulations and more banks were allowed to open and compete, there was a rapid rise in the amounts of black workers employed at this banks, my reasoning for this is set out above.
Generally on the issue of race, power corrupts and absolute power corrupts the worst, centralized power can get into the hands of racists and be used to cause much more harm than a racist merely not allowing a few people into their diner.
Original post by Potterfan
If they are 'needs' and 'wants' aka desires which the fulfillment of bring about happiness, is there any rational reason for why advertising is a bad thing? Furthermore most adverts merely.. advertise products they obviously try to sell consumers products but at the end of the day you don't act upon the majority of the adverts you watch do you?
Define what happiness is. I think that it is possible to be happy without fulfilled needs.
What I dislike in terms of a free market and an advertisment is the fact that brand-name-products are hyped and people who produce them in the 'third world' are living and working under bad conditions. Is it okay in your opinion that people in the 'modern' world are able to make happy themselves by buying products which are produced by poor people?
I have an other opinion in terms of utilitarianism. The satisfaction of a customer or the fulfillment of the happiness by buying goods is just a purpose to make profit. That is the meaning of utilitarianism in terms of a free market in my point of view.
Original post by Kallisto
Define what happiness is. I think that it is possible to be happy without fulfilled needs.
What I dislike in terms of a free market and an advertisment is the fact that brand-name-products are hyped and people who produce them in the 'third world' are living and working under bad conditions. Is it okay in your opinion that people in the 'modern' world are able to make happy themselves by buying products which are produced by poor people?
I have an other opinion in terms of utilitarianism. The satisfaction of a customer or the fulfillment of the happiness by buying goods is just a purpose to make profit. That is the meaning of utilitarianism in terms of a free market in my point of view.
What I dislike in terms of a free market and an advertisment is the fact that brand-name-products are hyped and people who produce them in the 'third world' are living and working under bad conditions. Is it okay in your opinion that people in the 'modern' world are able to make happy themselves by buying products which are produced by poor people?
I have an other opinion in terms of utilitarianism. The satisfaction of a customer or the fulfillment of the happiness by buying goods is just a purpose to make profit. That is the meaning of utilitarianism in terms of a free market in my point of view.
Happiness is fulfilling your own values and needs.
Well yes, would you prefer them to be made for a higher price in a 1st world country, so everyone pays a higher price and gets less welfare gain from consuming as a result.
Furthermore what would you suppose those poor people be doing without derived demand for their labour by us buying the products they produce? They would back to living day by day on subsistence level farming, hundreds of millions of people have been bought out of absolute poverty in India and China by globalization and building of manufacturing industries in their countries. Its really hard to put that into perspective but imagine if your family were living on a humble rice paddy and your survival was dependent on the state of this years harvest ( 20 and 43 million died in the chinese great famine under the communist party - http://en.wikipedia.org/wiki/Great_Chinese_Famine). Now imagine that your mum or dad has a job at the local factory, now your family has a stable income which can allow you to afford basics such as clean water, food and a new pair of trainers that don't have holes in them.
Right but what do you mean 'just to make a profit', the intention may be to better yourself, but the outcomes are a creation of more happiness to society. In fact this motivation for self gain is in line with human nature, it provides incentives that humans respond to, incentives such as material gain for self or emotional gain etc there are many reasons why people act in ways to produce for others.
(edited 10 years ago)
Original post by Potterfan
Border control is a matter for the state.
Why? What makes personal movement something that should be regulated but not anything else something that should be regulated?
I was referring to the UK and yes thats awful but its not exclusive to free markets, in fact its likely to be worse in regulated markets this is because regulated markets have less competition. Take the the shop owners, in a competitive market the shop owners would lose customers and revenue/profit depending on the firms objective. This would result in them losing market share, losing investment and shrinking, so there is less discrimination and less racism, more welfare to society. Some firms may even go bust.
But this is what I'm talking about. Interpersonal relations, opinions, and prejudices can often override what the logic of the market says should happen. In the Southern US in the Jim Crow era, if you'd opened an integrated restaurant you'd lose most of the white market, because most Southern whites at the time were racist and wouldn't have gone there. Add to that the fact that whites were much richer and you have a vicious circle.
Generally on the issue of race, power corrupts and absolute power corrupts the worst, centralized power can get into the hands of racists and be used to cause much more harm than a racist merely not allowing a few people into their diner.
But ownership of a company, particularly a large company, is also a form of centralised power.
Utilitarianism is a social structure, namely the greater good for the greater number of people. Free market ideology maximises the returns for the least number of people. Those pursuing free market economics wish to take as much for themselves as they can, they do not wish to share the spoils. Utilitarianism promotes equality wherever possible, free market promotes individual greed. The two are incompatible.
Original post by freddyj
Utilitarianism is a social structure, namely the greater good for the greater number of people. Free market ideology maximises the returns for the least number of people. Those pursuing free market economics wish to take as much for themselves as they can, they do not wish to share the spoils. Utilitarianism promotes equality wherever possible, free market promotes individual greed. The two are incompatible.
Odd that because both Mill and Bentham thought it was completely consistent with free markets and infact developed it on the view that human beings were rational actors that pursued pleasure in their own self-interest.
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