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Comment by maxharris | Hacker News Reader

America needs capitalism, a system it embraced fleetingly in the ninteenth century. Capitalism requires a complete and total separation of state from economics, just as we have a separation of state from church. To get there, we need a moral revolution in which altruism is replaced by long-term rational self-interest as the moral ideal. Without this moral basis and justification, the traces of capitalism in our mixed economy will continue to be eroded, and innovative corporations such as present-day Apple will face ever-increasing pressure to given in to the politics of pull.

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I'm not at all hostile objectivism, however, you need to realize (I'm sure you do, but some people will assume you don't) that the foundation of capitalism, private property, is a state enforced right. All schemes to have private property enforced by non state actors in a modern society are, at best, only plausible (but untried). A total separation of state and commercial activity is thus not possible. Furthermore some commercial activities have negative externalities; some of these are hard to measure in monetary terms; wich, in turn, makes a value judgement from the ultimate arbiter (the state) necessary; etc. This shows the difficulty of separating the state and economy even to the degree church and state are separated today. (I said degree for a reason; right to worship is also meaningless without (state) enforcement, without wich some radical muslim would surely sometimes enforce sharia laws on some unlucky apostates from their religion)

See my comment below.

Externalities are not a problem when all property is owned privately and the courts are philosophically equipped to handle the ordinary disputes that arise.

Remember that if you can detect some pollutant or annoyance well enough to write a scientific paper, you can probably convince a court, and there is probably a big enough market that detectors for the chemical or vibration (or whatever) can be sold, making effective, objective litigation (inherently a nonviolent process) much easier. This works for land, sea and air.

Yes, you're not really arguing against me here (I'm only claiming that the monetary value of some externalities are hard to measure.) For example, the problem of overuse of antibiotics leading to an increase in resistant bacterias, how do you solve that one? Even if the judges found a way to make the parties pay for the harm they do to others. How do you measure the harm of an increase in resistant bacteria that leads to a shorter average lifespan the cause of wich also, on average, makes it possible to work more hours (and thus raises lifetime income and consumption)?

Bacterial resistance will happen no matter how antibiotics are used if they are to be useful; indiscriminant use merely decreases the time it takes for resistant strains to become commonplace.

Interestingly, the way to overcome this problem is to develop and use combination therapies. I learned (in a virology class, but the principle applies to anything with a replicating genome) that a very good estimate of the combined resistance rate is simply the product of the separate resistance rates associated with each drug in isolation. I don't think this is commonly done with antibiotics yet, but perhaps someday this will become necessary.

I should also mention that when the selective pressure imposed by an antibiotic is removed, a population of resistant bacteria will invariably revert to a wild-type phenotype because of random drift (or loss of its resistance plasmid where applicable). So old antibiotics do become useful again after enough time passes.

Antibiotic drug development essentially ceased in by the 1980s for a bunch of complex reasons - breaches of capitalism as well as scientific naivety - I think that we'd be just fine right now if the pipeline had not stalled.

The marginal value of more use of antibiotics is not necessarily constant, if a certain antibiotic can be used a certain number of times before it is ineffective, those "turns" can be used more or less effectively (I propose). These turns put together make up a commons, how do you avoid the tragedy of it?

Perhaps you can't, but who cares? If people (and therefore groups of them as corporations) were left free to innovate and produce, there wouldn't be any practical problem regarding antibiotic resistance that you would likely have become aware of in the first place.

More fundamentally, capitalism needs more than just an economic defense (plenty of people and organizations do that today, and while their arguments are essentially true, they are not going to win that way). Capitalism is the only moral social system because it is by definition the only one that is compatible with individual rights. Individual rights are required because only reason allows mankind to maintain the conditions required for his survival. Any other system or "tweak" necessarily requires the initiation or threat of non-retalliatory force upon innocent men, which necessarily stops their minds in a manner proportional to the degree and scope of the threat.

The next step is pretty simple - what is the good? The altruistic idea of the good is not logically sound; if the good is defined as helping others, how is the good defined for the recipients of that help? To tack on another rule to solve the conundrum isn't sensible - to morally bifurcate humanity a priori (in this case, without looking at the specific actions of a particular person that arise from free will) should give you pause. Rand's answer is that every human being exists for their own sake, and that the good is what is in their own long-term rational self-interest. This is a precondition for proper and healthy human relationships; to the extent that people pursue this, they improve their lot and lives.

So to reiterate: from a scientific perspective, this is not a practical problem that doctors would face under true captialism, and morally speaking (which, in Rand's view, is exactly equivalent to the practical), there is nothing that can exist that is better than capitalism.

"Capitalism requires a complete and total separation of state from economics"

How do you fund the state, which is required for the provision of certain public goods like the common defense and that in most libertarian schemes enforces contracts?

Also, modern societies cede a monopoly on the legitimate use of force outside of self-defense to the state, which prevents revenge cycles (vendetta) and allows trust beyond families and clans.

The US and Japan are high trust societies and that makes a big difference in being able to do business (contract enforcement is a last and generally unsatisfactory resort) and all sorts of things we think as good. I think among other things that needs a state of more than minimal strength.

"How do you fund the state...?"

The government should sell optional contract insurance, which gives the contractual parties the right to go to court (or perhaps expedited enforcement in court) if the contract is not met. The rate should be capped at some small percentage of the contract's value - say 1%.

But the exact method doesn't really matter; in a society that such as the one I am speaking of, surely there will be many who will see the obvious selfish gain in maintaining a limited government that it totally dedicated to the defense of their individual rights.

Actually, I don't think taxes would necessarily violate a separation, if the taxes were not attempting to manipulate the economy by favoring this or punishing that. A single-rate income tax, sales taxes, property taxes, and the like could effectively be "economy-neutral", that is neither benefiting some unfairly nor being an excessive drag. The big problem is with government regulation.

Perhaps in theory possible, but it violates the simple "complete and total separation of state from economics" principle.

And the public choice theory says it's not possible: http://en.wikipedia.org/wiki/Public_choice_theory

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