[FRIAM] for the marketeers amongst us

Mon Apr 26 17:58:00 EDT 2021

* "But a contract-governed market isn't any more "free" than a regulated
market"*

Maybe what  we understand by "free" is different? If I evaluate the risk
rewards and decide I want to get dentures for 1 dollar from the
"pavement-dentist" and the regulators do not prevent the transaction, I
consider that a free market transaction. If the regulated market prevents
that transaction, I'm still without front teeth. How can you claim the
contract-governed market isn't more "free" than the regulated market? In my
understanding of "free" the contract-governed market is more free; I end up
with dentures and the enterprising man makes a profit. In the free market
case the outcome is win-win and the regulated market case lose-lose.

What do I miss about your point? Maybe if you explain to me how you
understand "free" we can sing from the same sheet.

On Mon, 26 Apr 2021 at 23:11, uǝlƃ ↙↙↙ <gepropella at gmail.com> wrote:

> OK. But a contract-governed market isn't any more "free" than a regulated
> market, neither of which are maximally efficient. And in the context where
> all the negotiating power lies with one side or the other, those contracts
> may end up even *more* restrictive than government regulations. (E.g. if
> all the multinational corporations get together and put the same
> boilerplate in their contracts, like routing all breach claims through
> arbitrage by an AI in St Petersburg.) But even if it's not, i.e. somehow
> where we regulate the market so that only symmetric contracts stand, if any
> 1 party entangles, via contract, with multiple other parties without
> normalizing all their contracts, the mesh of contracts will eventually "gum
> up". (Anyone who's signed more than 1 non-compete NDA will know what that
> looks like.) Another (non-free) restriction could be to sunset all
> contracts at, say, 1 year. So, every entrepreneur has to go back through
> their mesh of NDAs and re-negotiate/re-sign them every year. But 1 year
> contracts won't work for everything. So, there'd necessarily be a gumming
> up around how long the mesh of contracts lasted.
>
> All of this works directly against the "freedom" (including transparency
> and efficiency) of the market. So, contract markets are not free markets at
> all. Counterintuitively, a well-regulated market can be freer, more
> efficient, than a contract market. But if the regulators could *reduce* all
> the complexities of any contract into merit/outcome (instead of price),
> then that reductive measure could be multimodal (which price can't ...
> which leads to financial instruments). It might also be multidimensional.
> Outcome could be a vector of both some variable like [non]responder and
> time.
>
> There'd have to be rules about concreteness of outcome-compliance, of
> course. E.g. if side effects from toxic false teeth you bought on the
> street corner kill you from sepsis, you couldn't claim the outcome was met
> just because you no longer need false teeth (because you're dead). But if
> the outcome were <no longer need false teeth, still alive after 2 years>,
> then the teeth vendor could get paid.
>
> In effect, this is what we have already, except "outcome" is diffused
> through the multifarious jurisdictions and power dynamics of who can, and
> the RoI of, hiring a team of lawyers. If the modes and reduction to outcome
> were more algorithmic, it might make the markets more efficient than they
> can be with asymmetric contracts or deep-canon centralized regulation.
>
>
> On 4/26/21 1:37 PM, Pieter Steenekamp wrote:
> > No, a free market system is not limited to outcome based contracts. Free
> market is allowing two (or more) parties to have a valid contract on the
> terms and conditions both (or all) parties agree on. A patient and an
> oncologist may agree on a contract where the patient pays for the effort
> and not the outcome, that could still be 100% within the free market
> system. This is of course provided the authorities don't have regulations
> stipulating the legal bounds of the contract.
> > For example, in Cape Town there are many poor people without front
> teeth. A while ago an enterprising man, without any medical qualifications,
> set up shop on a pavement to do false teeth at an order of magnitude lower
> price than a qualified dentist. He was shut down very quickly. In a free
> market system he would have been allowed to provide dentures resulting in
> happy poor people with front teeth who cannot afford a traditional dentist
> and an enterprising man making good money. With the regulations that
> protect people we now have an unemployed poor enterprising man and many
> people who are still without front teeth.
> >
> > On Mon, 26 Apr 2021 at 19:49, uǝlƃ ↙↙↙ <gepropella at gmail.com <mailto:
> gepropella at gmail.com>> wrote:
> >
> >     Should everyone be paid based on merit/outcome? E.g. I go to the
> oncologist because cytometry tests show I have stage 4 lymphoma. We go
> through a years long treatment, at the end of which I may be a responder or
> a non-responder. A free marketeer *should* argue that the oncologist
> shouldn't be paid until an assessment of response can be made.
> Nonresponders shouldn't have to pay (or get a refund like you would buying,
> say, a blender off the internet). Responders have to foot the bill for the
> whole enterprise.
> >
> >     Obviously, there are plenty of other options, all of which are
> negotiated asymmetrically between the chronically fatigued cancer patient
> and the battery of multinational corporate lawyers driving Teslas. But the
> gist of the market is merit/outcome based. Right?
>
>
> --
> ↙↙↙ uǝlƃ
> - .... . -..-. . -. -.. -..-. .. ... -..-. .... . .-. .
> FRIAM Applied Complexity Group listserv
> Zoom Fridays 9:30a-12p Mtn GMT-6  bit.ly/virtualfriam
> un/subscribe http://redfish.com/mailman/listinfo/friam_redfish.com
> FRIAM-COMIC http://friam-comic.blogspot.com/
> archives: http://friam.471366.n2.nabble.com/
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://redfish.com/pipermail/friam_redfish.com/attachments/20210426/67a04e1e/attachment.html>