220 thoughts on “Mont Pelerin in Iceland

  1. Alice,

    Are you one of these people who like to look at facts and then completely ignore them?

  2. Sean

    Iceland – the free market deregulation case study experiment


    “The catalyst for a dramatic turn-around was the deregulation of the formerly state-controlled financial sector. The move unleashed an unprecedented credit boom and helped to create a business elite now known locally as the billionaire boys club.”

    A country run by the free market billionaire boys club????

    We dont need it Sean or Ben.

    As they might have said in the old wild west – pack up your theories and get out of town.

  3. Alice,

    For someone who thinks I have a problem with dealing with the facts you seem to spend a lot of time telling me I’m wrong but providing no evidence to the contrary. Look back through the comment trail. Note how many times you have steered away from the facts to attack my motives, ideologies etc. Now track back and note how many times I have done it.

    Now I am keen as mustard to debate the facts until the cows come in a civil and courteous manner but it’s a little off putting when someone constantly attacks my motives and not my argument.

    If I am some sort of crazy ideologue then that is a distinct advantage to you as you should be able to soundly thrash me in the field of critical thinking.

    Now your latest argument is stating that because the regulatory chocks were taken off in Iceland and everyone borrowed to get into an inflated asset market then a) the free market is to blame here and b) we need to throw that entire idea away because of this.

    I have contended that in a) the free market is not to blame for many reasons. The first and foremost is that I see the influence, both direct and indirect, of government agencies in the property market in the US have played a large role in the making of this crisis. Secondly I contend that with the benefits of the free market comes the responsibility of it. There are inherent risks in investment as most of us are aware. If someone makes bad decisions when investing then it is bad for them. If an entire country (even a tiny country like Iceland) makes a bad decision then that is terrible. All the more reason to allow for the creative destruction of the marketplace to have it’s proper effect. Punish bad decisions and reward good decisions. This way we all, in the end, end up doing a heck of a lot better. This is evident in all countries that have dabbled in the free market experiment and in the bellies of millions of now well fed people.

    This leads me to my argument against b). Why would we throw out the baby with the bathwater in this way? Just because there are some setbacks along the way, they pale in comparison to the amazing things we have managed to achieve with ever increasing economic freedom. One hiccup and you content that that’s the end?

  4. Ben – Read the post. Read Roy Green. Read anyone you like. Just read more (get out more too if you can I would suggest). Do I think you are a crazy ideologue? I wont answer that one. There is some market theory that is a good thing (but its lousy for teh maco economy) and I dont even think Friedman would have approved of your support for Hayek and the Monte Pelerins. Crazy ideology – you bet.

  5. @182 Ben S Says:
    March 23rd, 2009 at 9:32 am
    Freelander @ 172: What is your point? Supporters of Hitler, Stalin and Mao also breath air and drink water as do Libertarians.

    Indeed they do, but not everyone embraces a cult following as Hayek, Ayn Rand and Milton Friedman did. In fact, when more ordinary people find they have one or more cult followers, rather than embrace them and mentor them they obtain restraining orders. What is wrong with libertarians that they behave in such a cultish way? John Lennon certainly had a cult following but like most people he neither wanted nor encouraged them.

  6. Alice – do you want to get into a debate over countries that have failed BECAUSE of government interference in the economy?

    The key issue is risk – investors know that they are taking a risk but are not willing to accept losses and so they want to be bailed out. It become a vicious circle which allows companies to grow exponentially and become so large that they cannot be allowed to fail.

  7. Freelander: From what I understand of what you are saying I am behaving as a cult member would because I support the ideas of people who have contrary ideas to yours. If I am mistaken could you explain to me how this cult-like behaviour manifests itself?

  8. SeanG, It’s honestly not worth it. Alice has no interest in your opinion. She is thoroughly closed minded on the subject (which is ironic as she has constantly berated us for our closed mindedness).

  9. I agree Ben S. That is why I switched off and thought it would be more interesting finding out what she actually thinks… only to find out that it is another insult directed at me.

    Who am I to know about the financial crisis? I only work in the sector.

  10. @210 Ben S, I think I have explained enough. Anything further you are able to work out yourself. Just ask yourself the questions. Am I involved in a cult? Am I completely resistant to and dismissive of any contrary evidence? Do I hang on every word of cult leaders? Do I hold certain cult texts as holy writ?

  11. Sean and Ben, you may be interested in the fact that Marx foresaw the problems we have now in 1894

    “Formation of stock companies. Thereby…(occurs) transformation of the actually functioning capitalist into a mere manager, administrator of other people’s capital, and of the owner of the capital into a mere owner, a mere money capitalist…It produces a new financial aristocracy, a new variety of parasites in the shape of promoters, speculators, and simply nominal directors; a whole system of swindling and cheating by means of corporate promotion, stock issuance, and stock speculation.

    Is this the sector you now work in Sean? It is only natural that you seek to defend the processes which have enabled financial sector managers to extraordinarily enrich themselves from other people’s capital (at the same time producing little which is truly productive in the economic sense) and to become so inefficient as to topple over, causing extreme hardship across the globe.

  12. In other words Freelander you are unable to support your claim in any way.

    I am on John Quiggin’s blog right now discussing contrary opinions to my own. I constantly and actively seek out contrary views and am open to them.

    How do you fare in this capacity? Have you asked these same questions of yourself?

  13. Alice –

    There have been financial speculation before the joint stock company creation. That was just a way of making it easier to raise money to start companies.

    I will maintain that there is an agent problem but at least I am not stubborn in recognising it (nor are people in the industry).

  14. Don’t know what this ‘free market’ (Mob) debate is about? There are no free markets, never have been within living memory.

    Some markets are banned totally, last time I looked we can’t sell children to dog food companies.

    Every market is regulated in some way, ususally post ripoff/disaster/death/etc. Govt’s respond by introducings regulations with mechanisms to see the regulations are followed.

    I mean do we really want a zero regulation food market? I like to live you know. And everyone knows that someone (ah la China) will cut corners that will kill someone (or a lot of someones).

    Once you get past this, purely rhetorical, point, then the real debate is how much regulation, in what way and how the regulations are monitored, plus the rewards/punishments.

    The ways are myriad, ranging across prescriptive, adaptive, feedback, incentive and many etcs. Tbere are low variety methods (e.g. ‘drive on the left’) and high variety ones (e.g. such and such a food must not have more than x% of this chemical and y% of that one .. and so on).

    The real issue is and always will be… are the controls (as a more embracing term) effective and efficient (defined in the sense of the lowest cost of operation vs highest risk/bad behaviour moderation).

    Plus, are they just and fair (that is, do they meet ethical standards).

  15. This is the problem that we have with these debates.

    I err on the side of free markets but I recognise the need for some regulation. However because I tend to defend the market place somehow I am a passionate believer in a free market ideology. Why this desire to label a person who disagrees with you?

  16. @215 Ben S Says: March 24th, 2009 at 1:34 pm In other words Freelander you are unable to support your claim in any way. I am on John Quiggin’s blog right now discussing contrary opinions to my own. I constantly and actively seek out contrary views and am open to them. How do you fare in this capacity? Have you asked these same questions of yourself?
    This will be my last post on this but here goes to answer rather than evade your questions. How do I fare? Very well. I do not display any cult like behaviour. When I find that I am wrong I change my mind. For example, if I was a libertarian and read John Quiggin’s post on the MPS and Iceland, I would do a bit of background research and then have to say “John, you are quite right.” The MPS claims credit for the transformation in Iceland in August 2005, their man (and men) is (are) in charge, in February the next year it comes close to all falling over, in 2008 it does all fall over.” I would say “John, like Soviet supporting communists in the late 1980s, 1990s I have at least some hard thinking to do.” But no you just try to talk it away. That isn’t discussion.
    So am I completely resistant to and dismissive of any contrary evidence? No. I haven’t been in the position you are in, precisely because I don’t wait until the evidence is so overwhelming. Once upon a time my views were more libertarian than they are now. But I was never completely nuts.
    Do I hang on every word of cult leaders? No I don’t. There are people I admire but I recognise that we are all fallible and I have never come across someone who is the revealed truth the way ‘true believers’ seem to hold Marx, Hayek, Friedman, Ayn Rand, Charles Manson or who ever.
    Do I hold certain texts as holy writ? No. There are good books that have interesting ideas, which are good ideas or get you thinking. But those thoughts should be subject to ongoing evaluation in the light of new information or additional thinking. To me there are no holy writ texts.

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