[FRIAM] for the marketeers amongst us

Mon Apr 26 19:30:41 EDT 2021

I suspect, to use an open source software aphorism, you are speaking of
"free as in beer" and Glen is speaking of "free as in freedom".

On Mon, Apr 26, 2021 at 5:04 PM Pieter Steenekamp <
pieters at randcontrols.co.za> wrote:

> * "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
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