From: hallam@Etna.ai.mit.edu
Date: Fri, 7 Jun 1996 20:21:56 +0800
To: Robert Hettinga <cypherpunks@toad.com
Subject: Anonymous stock trades.
Message-ID: <9606062327.AA04162@Etna.ai.mit.edu>
MIME-Version: 1.0
Content-Type: text/plain



>I suppose it depends on what you call "open", eh, Phill?

>If by "open", you mean financial markets where, as Milton Freedman says,
>each new regulation raises the cost of entry and protects the surviving
>firms by killing their smaller competion with red tape, then we have "open"
>markets.

Well, Milton Friedman's method for saving the whale is to leave it to the free 
market, if people want whales in the oceans they won't buy whale meat. The point 
that even if no US person eats whale, a few thousand "gourmets" in Japan can eat 
their way through the remaining stocks of many species in a few years escapes 
him. So forgive me if if find you authority somewhat less than compelling.

Adam Smith makes the point rather better in his analysis of monopolies and how 
they affect the market. But remember that although regulations may be instituted 
as protectionist mechanisms that is not the only purpose that regulations are 
introduced.


>If by "open", you mean that people can't purchase the attention of their
>favorite politician fair and square, without having to play zero-sum games
>with barnyard animals, then we have "open" markets. ;-).

There are so many negatives in that sentence I can't figure out which way you 
are arguing. Certainly there are many senators, congressman etc who can be 
bought for a contribution to their election fund or a huge advance on their 
memoirs. 


>Nothing personal, Phill, but it does seem like it's more a question of what
>you're afraid of, than what *is*, right?

No, it is a case of whether you are applying ideological judgements or prepared 
to analyse the system itself. I do not believe in the idol of the free market. I 
do not consider ecconomists to have justified the level of inane self-satisfied 
certainty about their field that they exude. I was talking to a professor at the 
Sloane school yesterday who made precisely this point.

Deciding what is right implies an ethical judgement. Are you basing your 
argument on Kantian or consequentialist assumptions? I can argue either but 
since most of my thesis is based on a logical positivist approach I'm far more 
sympathetic to the utilitarian point of view.


The free market is not in itself an ethical basis - that would be creating an 
ought from an is. The problem which libertarian idelogues are affraid to face up 
to is that markets have required regulation to keep them open and free. Its all 
very well for people to jump up and down, stampt their feet and claim the 
opposite but this is what every government in the free world believes. The 
effects of deregulation in the savings and loans area make it unlikely any 
further experiments in that area will be tried for a while.


		Phill