When beliefs are taken for granted, ideas die. Without a constant pressure from competing worldviews, people stop thinking, and whatever originality their ideas once had begins to corrode, in the end leaving only slogans.

Norway's soft-left consensus on the danger of global capitalism is an example of this. There are critics of global capitalism who think thoroughly about their views, but large parts of this worldview, the ones most commonly accepted, are simply dead. Slogans and habits of thought, and little more.

Which is why everyone should welcome In Defense of Global Capitalism, Swedish author Johan Norberg's attempt to revive a debate both sides are in need of.

Norberg makes a quick tour of popular arguments against global capitalism, using statistics to show that not only are we on the whole moving in the right direction, there's also a correlation between a country's economic progress and its embrace of free trade and free markets. Poverty is widespread, but the global economy makes it possible for today's poor to do in decades what the West did in centuries. Instead of keeping the third world poor, multinational companies and international trade give them a quick way out of poverty. The real threat to the third world is Western protectionism, hypocritically championed by our own left.

Numbers abound, but Norberg also takes the time to describe the underlying ideas of the free market approach, which he does with a talent for clarity. That the freedom to produce and create increases the choice of individuals, not the power of corporations, is something that in our countries has to be explained. We have come to see capitalism and individual freedom as competing interests, and private corporations as the enemies of both the people, the government and the environment. Norberg challenges this on the fundamental level, briefly but well.

In many respects, In Defense of Global Capitalism is a sibling of The Skeptical Environmentalist. Both rely heavily on mostly uncontroversial statistics to challenge popular beliefs about the sorry state of the world. Statistics is not a decisive approach, because questions can be asked about measurement methods, interpretation and relevance. In fact a book like this should never be allowed to have the last say in a debate. You can't cover the workings of the global financial market in 30 pages. World isn't that simple. Nor should anyone automatically trust the research behind a book that covers such a broad issue as global capitalism in 300 pages, at the rate of several statistics per page. Any of these numbers may be disputed, and I'm sure they have been.

But this book is perfect as the opening statement of a new and necessary debate. It's a challenge serious critics of global capitalism should be expected to meet. Face it: Whatever you think about global capitalism, the popular criticism of it is plain dumb, and often hypocritical. This book will help weed out the dumb arguments, and force critics of capitalism to make an effort. Even then I doubt they'll have much of a case, but free marketeers like me need smart leftists for the same reason they need Norberg, to keep our wits sharp. At worst, this book will help create those smart leftists. At best, it will turn them into free marketeers.

The big problem I see with clobal capitalism is the people in the country concerned. People often get to a certain level of comfort and decide it's time to fix everybody's problems. So they spend like crazy on the assumption things will continue forever.

If they don't end up in a recession/depression as a result, there's still the corporations who make sensible choices: Shall we continue to produce in country A, where the govt taxes us 60%, the people want and get 30 hour work weeks, $25 an hour and have no interest or enthusiasm for their jobs or should we close up shop and move to country B where the govt taxes 30%, people work 40 hours a week (and want overtime), get paid $15 an hour and have a definite appreciation for the fact they have a job?

I know what I'd do if I ran that company.

"A, where the govt taxes us 60%, the people want and get 30 hour work weeks, $25 an hour and have no interest or enthusiasm for their jobs or should we close up shop and move to country B where the govt taxes 30%, people work 40 hours a week (and want overtime), get paid $15 an hour and have a definite appreciation for the fact they have a job?"

These arguments seem to be quite generalising. Besides, I doubt you will find that there are countries where all your assumptions are true. For instance, in Norway I guess the corporations pay more tax than in US, but I cant see that this automatically makes the workers any less willing to work than in US.

Global corporations are very large scale, it may only take a couple dollars an hour or a couple hours a week or one too many side benefits or any combination of that to make them move - I used an extreme example to make my point.

Anyway, I was thinking less along the lines of Norway than for example France (which is a pretty good country to use for examples as far as extremes go).

We have come to see capitalism and individual freedom as competing interests, and private corporations as the enemies of both the people, the government and the environment.

Capitalism can, and in many places has, been a system the primarily benefited a closed circles of oligarchs. But just as the solution to feudalism was to extend private property protection to everyone - eliminating the nobility's monopoly on property, instead of eliminating private property, the solution here is to extend the ability to participate freely in the market to all - eliminating the plutocrats' monopoly on wealth creating and accumulation.

The established businesses always favor government regulation, oversite, taxation, etc., that serves to make it more difficult for competitors to enter their markets.

When they succeed, the problems that result aren't because of too much capitalism, but because of too little.

Bjorn, why not start a topic on Eurabia by Bat Ye'or. A very provocative book

allan,

i could be entirely wrong here- but wasn't it on this very blog many months ago that i read about an epidemic of norwegian workers deciding not to go to work in the morning because they stubbed their toe the night before?
it may seem a little off topic, but i think it is relevant considering recent e.u. negotiations regarding service market liberalisations:

"M Chirac has jumped on the bandwagon, seized the wheel, and chose a dinner on Tuesday to condemn liberal market principles as “the new communism of our age”

http://www.timesonline.co.uk/article/0,,542-1538838,00.html

The problem with Global Capitalism is that it suffers from the same fatal flaw as communism. It looks good on paper but it lacks the checks and balances necessary to prevent the strong from exploiting the weak. As it stands right now, the global capitalism that is being pushed is just another way for the industrialized nations to exploit the world's resources, taking far more from the poor nations of the world than they put back into them.

And this book sounds like propagandist trash, especially if the authour is claiming the left is protectionist. It's not the left in the US that has slapped illegal tariffs (steel, Canadian softwood lumber, canned pears from South Africa to name a few) on hundreds of products from around the world. Nor is it the left in the US that disregards the rulings of the WTO.

Robert McClelland,

I think what the left does and what the left wants is
something along this line:

[quote]
In the 1970?s, with the first wave of oil price increases,
another leftist populist Carlos Andres Perez, was President
of Venezuela. Perez nationalized the oil and iron ore industries
and with the money from the oil windfall, created the Venezuelan
Investment Fund and the Venezuelan Corporation for Guayana (CVG).
Hundreds of companies ended up under these two umbrellas, with
few of them ever showing a profit or even producing anything.
Venezuela Inc. was a gigantic failure, as most enterprises had
no business plan, were inefficiently run and corruption was
rampant. Few of them had anything going for them other than
desire or wishful thinking by some Government official that
the state should participate in those particular areas.

Venezuela Inc. is back, and much like the first time around,
the decisions are being made at the top, without any serious
studies and most will once again become huge sinkholes for
public funds. So far, President Chavez and his Cabinet have
had the state become newly involved in:
[/quote]

See http://blogs.salon.com/0001330/2005/03/23.html

Can't have capitalism, much less global:

THE END IS COMING! THE END IS COMING!!

Via Lucianne:

'Creationists and capitalists are taking over city academies'

The Government's £5 billion city academies programme is allowing "capitalists and evangelical Christians" to take control of state schools and destroy comprehensive education, the National Union of Teachers said yesterday.

Delegates to the union's conference in Gateshead voted unanimously to do all in their power to prevent any more of the planned 200 academies opening.

Steve Sinnott, the general secretary, said the academy programme gave private sponsors, in return for an investment of £2 million, the power to run a state-funded school as they saw fit and prevent pupils getting a well-rounded education....

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2005/03/29/nut29.xml&sSheet=/news/2005/03/29/ixhome.html

So, Robert, casting further afield, eh?

Whassa' matter, no one reading your blog?

How many have you been banned from now?

GAZE, everyone.

--The established businesses always favor government regulation, oversite, taxation, etc., that serves to make it more difficult for competitors to enter their markets.--

Bastiat?

The rich spend their wealth making sure you don't get yours.

I wish that the whole world was neutral so there would be no wars or terrorists or capitalism but obviously that isnt going to happen.

_______________
ITIL Consultant

A much better book on this entire subject is "The Wealth and Poverty of Nations" by David Landes. Just a wonderful writer, unpretentious -- which is saying something given that the author is a retired professor from Harvard in history and economics. He is also funny and not afraid to disagree is simple language, e.g. "I do not buy the theory that . . . for the following reasons:" If you want history, fact and thoughtful analysis this is the book to read

To me it seems that some of the real problems with "global capitalism" is the absence of approx. real free market situations, mot entirely because of limitations from governments, but quite a lot from the "market power" (someone find me a better term here!) of the large multinatonal companies already operating.
These companies has in their power the ability to quench competition from any smaller operators before they can get their products into real circulation (the market becomes in effect a oligopoly, not a free market)((for examples, search the web for critisism on large agricultural companies like Monsanto)). This will in western countries often lead to anti-trust legislation, but this legislation often has one bad side effect: It will no longer be money in WINNING the competition (free market economy is in a way dependent upon nonone really winning the competition). Often the larger companies feel that they are in fact subsidizing the smaller ones under such legislation.
Quite a lot of developing countries (not all!) lack the ability to pass and enforce such legislation, which makes them very vulnerable to the whims of the large companies.

KEE

Monsanto?

Monsanto is what it is because of the patents it holds - and patents are government-granted monopolies.

Monsanto's use of international patent law to maintain and defend it's market position can hardly be called a failure of competition.

Patent law exists for the specific purpose of preventing competition.

The point was what the critisism states, not Monsanto's operations as such. They vere chosen because of the enourmous upwelling of critisism their market strategies seem to create.
But, as leading suppliers of seeds and herbicides they CAN use their position to squeeze out others by prize wars, prizing below cost as long as the competition seems to be a threat (find any anti dumping legislation in most developing countries?), and increasing prizes afterward to recoup the losses when they have an effective monopoly.

Patent laws are not completely to prevent competition, they are there for
*Making sure of who it is that should get the credit (money) for a new product/development etc that someone else wants to use
*Hindering "pirate" copying, and also hindering unwanted use by someone else
*Making sure competitors use their own research to make comparative products, and that these end products are somewhat dissimilar to products already under patents (although they can often be used similarily).
KEE

and increasing prizes afterward to recoup the losses when they have an effective monopoly.

Just who in their right mind would invest money to invent anything and then have someone else copy it, free of the costs of research, and manufacture and resell it. You may argue that patents have too long a life, but to argue that there should be no patents is in my view absurd.

I'm not arguing that there aren't reasons for having a patent system. But lets keep track of what patents are, and why we have them.

There's no natural right of ownership in an idea. If you make a rocking chair that is particularly comfortable, and I see it and go home and make one the same way, I've stolen nothing from you.

Patents are a government monopoly granted for a limited term in exchange for full disclosure at the and of that term, because it is considered to be in the public interest to have novel ideas publicly known where others can learn from them, instead of locked up in perpetuity as trade secrets.

The arguments for and against are purely utilitarian - there's no issue of fundamental rights involved.

Kim Erik, now you know why the US taxpayer subsidised our "good friends" and "historical allies" national health services w/cheap prescription drugs.

They'll break the patents.

It's not that our prices are "too high" it's that other rich western countries are too low.

Well, it'll solve overpopulation and cull the herd.

Kim Erik,

I've been thinking along similar lines. Here are some
comments I made previously. Not necessarily here, but
somewhere:

I believe that monopoly, in the loose sense, is most of
what's driving this.

A good party of the economy is broken up into little fiefdoms
that are controlled by a tiny percentage of the population.
When I say a sector of the economy is "controlled" I mean that
practically speaking the barriers to entry, that is to an
outsider coming in and trying to make whatever is that that
sector makes, are so high that realistically speaking it hardly
ever occurs.

Control of the means of production translates into wealth.

[and]

My impression is that having an effective monopoly in some sector of the
economy is the usual key to high profits. I think many people share that
impression, in particular people who buy stocks. So if company looks like
it has a chance of winning a monopoly its stock will carry a high premium.

Likewise when corporations look for executives they're looking for someone
to win the game for them, not just be a good executive. Since the supply of
perceived superstars is necessarily low, just as in sports salaries get
outrageous.

As to why european counterparts don't have the same extraordinary compensation,
I don't know why. I suspect the same winner-take-all mentality is at work
there.

In this bid to be the one winner, private corporations have advantages and
disadvantages over public. On the one hand they can afford to plan longer
term, withstand short-term losses better and they aren't as vulnerable to be
taken over by a competitor, on the other hand they can't tap into the extraordinary
large sums of money that a successful public company can. Given that taking
a monopoly often implies becoming very large, that's a significant problem.

If we stand back and ask a different question, not which scheme will be
best for a particular corporation but rather for all of us, then I think
we can imagine better scenarios than this winner-take-all game.

If instead corporate taxation was progressive, with small companies not
being taxed at all, and moderate moderately, and large steeply, then almost
every sector would be dominated by a host of small companies. Monopolies
would become exceedingly rare.

Companies would then be competing not to see who can drive everyone else
out of businss, but rather on being good at whatever it is they do.

The dynamics of the economy would completely change.

More specifically I'd like to see a progressive sales tax on
gross sales within a country. Gross sales because
relative to any other metric this is easy to measure. Plus
I don't see any obvious negative side effects.

The main difficulty I see with this scheme is that large
corporations (especially foreign corporations) would strive
to appear as a host of smaller companies to get the lower
tax rates. We need to reconcile ourselves ahead of time
to the realization that no scheme will be perfect; the real
question is whether the net effect is positive. For a large
country like the U.S. where most economic activity is internal
it would be hard for a large economic entity to hide and
pretend to be many. And any such pretence would have a
tendency to become reality.

I find Mark's analysis much too simplistic and also at odds with economic reality. There are few if any monopolies in the world to day with the exception of state sponsored and supported entities. The exception may be cartels which are illegal. Inordinate profits in a particular area are not a bar to competition; to the contrary they invite competitors. His tax analysis makes no sense whatsoever (e.g. “with small companies not
being taxed at all, and moderate moderately, and large steeply, then almost every sector would be dominated by a host of small companies.”)

Finally companies don't compete to drive other companies out of business; they compete for market share. There is no good reason to have a social value a company that is inefficient or makes an archaic product. Under is analysis buggy whips should be prized; I myself prefer hybrid cars. GM may be the largest car maker in the world, but Toyota is eating them alive.

Herbie,

Imagine an activity where there is one producer and
one consumer. I'll call this economic situation,
system A. Imagine an activity, call it system B,
where there are many producers and one consumer.

Etcetera and making an easy to read table:

System A: one producer, one consumer

System B: many producers, one consumer

System C: one producer, many consumers

System D: a few producers, a few consumers

System E: many producers, a few consumers

System F: a few producers, many consumers

System G: many producers, many consumers

We can find each of these in the real world. I would
argue that knowing nothing else about the product, the
producers and the consumers, one can make certain
predictions about how these systems will behave with
respect to each other.

For example I would predict a product produced by
systems A, C, D, and F would be far more
expensive than the same product produced by
systems E and G. If we introduce the element of
time, then I would argue systems E and G will
innovate, that is improve their product or discover
new related products, far more rapidly than systems
A, C, D, and F. I would argue that if we look
closely we will find that system E behaves significantly
different than system G.

Only one of these systems has, as far as I know,
a name: system C aka monopoly. Why there are not
names for the others I do not know. Possibly it
has something to do with the fuzzy distinction
between "few" and "many" but our language and
thought are full of such fuzzy but nonetheless
real distinctions. ("Cartel" does not mean a few
producers; cartel means a group of producers
coordinating their activities to act like one.)

I was using "monopoly" to mean one or a few
producers which is not in the modern sense accurate.
On the other hand I'm following the lead of Adam
Smith who used the word in the same way.

Perhaps I should have made up a word, like for
instance "semimonopoly" -- which sounds ugly and
would probably lead to confusion. Better perhaps
to do what I've just done here except it takes
so long.

Moving on from these abstractions to real world
experiences twenty-five years ago microcomputers
and the software written for them were both
system G, today microcomputers are still system
G, while software has become system F (and pretty
close to system C). Some would point out,
accurately, that there are many, many producers
of software. What I would point out is that
in the sense I mean this these many producers
are all on the margin. The one dominant
producer has repeatedly demonstrated that within
a short time it can takeover any software market
it wishes via a choice of paths in a relatively
short time. What protects the other producers
is the smallness of the market; that is lack
of interest from the dominant one.

The fact that we have these contrasting systems
relatively close in time means that we can compare
them. Under system F prices dropped and innovation
occurred at a rate that is hard to believe unless
you were part of it. System C has been marked by
stagnation. All the perceptible innovations since
system C took over seem to be driven by absorption
of other producers.

It's my impression that if we look at economic
history we can find many other examples of system
G being replaced by system F or system F verging
on C and this same basic story has played out again
and again.

System F maximizes innovation. System F pushes
productivity to new heights. Often forgotten,
system F maximizes opportunities for people to
use and develop their gifts.

This idea of a progressive corporate sales tax
is an attempt to bias the economic playing field
towards system F. My worry about this is not
whether biasing things towards system F is a
good idea, but rather whether this specific
proposed mechanism would have excessive negative
side-effects.

One idea that will not work is making a "law,"
as in criminal law, against monopolies and
cartels. Criminal law is a blunt tool that
almost always "fails" in a variety of senses.
The US has laws against monopolies and cartels
and as is demonstrated year after year, for
a variety of reasons, these laws are hardly
ever applied. (Plus of course the laws we do
have don't try to discourage the situation
of a few producers, or system F, an almost
equally bad situation.)

Heck, I meant to say,

"System G maximizes innovation. System G pushes
productivity to new heights. Often forgotten,
system G maximizes opportunities for people to use
and develop their gifts.

"This idea of a progressive corporate sales tax
is an attempt to bias the economic playing field
towards system G."

Mark your analysis is similar to that of an economist who was asked how many cars go over the Brooklyn bridge in an hour. He counted the number of wheels divided by 4 and created an error factor for scooters.

A series of hypothetical do not describe the real world and how it operates. Big is not bad; big is big. Some forms of economic activity take a great deal of capital to get off the ground and to process - hundreds of millions of dollars. Among the ones that come to mind are the making of transistors for computers and cat scanning machines.

(Your ideal world exists already: it is called the “third world” and it has not produced any real benefit to the inhabitants. In fact, just the opposite. there is no price transparency which is really the critical question when you buy.)

Even as to operating systems, there is now considerable competition with open source ware. Indeed, Brazil has just announced that it will not purchase any software that is made commercially and will only give contracts to companies that provide open source code. The point is that while it may take a while, inordinate profits attract competition like flies to honey. A small workshop or manufacturer will never be able to complete against a giant that has the resources to invest in R&D. Only another giant will be able to do so. That is reality. We are not talking about making ball point pens.

Even as to that (pens) there are economic advantages that some countries have (even adjusted for health costs, environmental costs and taxes) so that they lower real costs and will drain jobs.

Your theorems are just that and do not have a realistic foundation.

As for taxes they impact a whole range of other issues. My own personal view is that taxes should not be used as relates to companies. I favor the Tory response "laissez-crever" - "leave'em on thier own and let'em croak" Compare the English private system of canals with the French government supported canals and you get the idea. :-)

Herbie,

I have no doubt some activities inherently demand
large enterprises, but nothing I'm proposing would
bar such. What really matters to a company is
the position of its competitors, if large size is
really needed then small competitors will fail
regardless of preferential tax treatment.

I wonder though how many activities really demand
large size. We live in a world where -- when you
add everything up -- small enterprises are taxed at
a much higher rate than large and where legal and
patent systems signficantly favor the large. It
could be that our perceptions of what is necessary
are skewed.

There is also more than one path to achieving
largeness. A market with many producers and
many consumers is after all a "large" system.
Am I suggesting that we discourage that? No.
Could it be that many of the large producers
we have today could be replaced with networks
of smaller enterprises?

An analogy might be made to programming. What I'm
proposing is a bias towards modularity (small
companies) as opposed to spagetti code (large
companies).

A network of replaceable elements can be incrementally
improved; a large structure where there are
massive, hidden dependencies all over the place
is quite difficult to improve and easy to degrade.

I know you believe the requirement for massive
startup capital for many activities is a telling
point. I would ask: Did microcomputers, software,
automobiles, and airplanes require massive investment
to get going? Yes, they did -- and, no they didn't.
There was massive investment but in each case it was
incremental investment that added up to massive,
which is to say compatible with the small enterprise
model.

What really requires massive capital concentrated
in one spot isn't inventing a revolutionary
new product but breaking into a field where a
single or a few companies already dominate.

You mention open source software and that is indeed
an interesting movement but what you have to
understand is that the people doing the work,
the people doing the heavy lifting, are not being
paid for their work. In fact we have open source
software precisely because a lot of bright frustated
people are having trouble finding employment in ways
that truely exploit their talents. This to me is a
sign of something wrong; in fact it's an absurd
situation.

believe I've answered your every point
you brought up with the exception of the third
world analogy. First of all I don't really
understand that. It's news to me that third
world countries favor small enterprises over
large.

I think I should step back a moment from this
point and try to articulate what I do think is
happening in the third world.

Crudely, I might break a third world economy
into three sectors: the illegals, the capitalists,
and the socialists.

The largest slice in turns of the number of people
employed would be the illegals. They are illegal
because costs of compliance with government rules are so
excessive as to rule out the activity otherwise or because
some crucial part of the capital (land) on which the
activity is based is not legally recognized by the state
(and again cost of making the ownership legal in the
eyes of the state is prohibitive).

Illegal enterprises tend to be small and because of
their illegality it is very difficult to leverage their
assets into expansion or investment in the future. Also
because they are illegal such enterprises are vulnerable
to elimination or extortion by public servants. The effective
tax rate on third world illegal enterprises is possibly
extremely high.

The second largest sector, as measured by percent of the
population engaged in it, would be capitalist. This would
be people who are directed by and respond to the market --
a market shared in fact with the illegals. The capitalists
are largely in compliance with the laws of the state and
their assets are both officially sanctioned and nominally
protected by the state.

The smallest sector, in this three sector generalization,
would be the socialist but it's the elite, pampered sector
because much of the money that the state gathers from the
capitalists and illegals goes to its support and because
it is not directed by nor is it constrained by the market,
or to put it in other words: the wishes of the rest of
the population.

In such a system the middle class bends all its effort
to finding positions for its children in the socialist
sector. Failing that they hope for a capitalist occupation.
And failing that, the choice is to starve or become an
illegal.

Possibly I should mention a fourth sector in analysing
third world states. What I would call the monopolists
using my generalized definition of monopoly. (Some would
call them capitalists.) Although small in number they
control an a astonishing proportion of third world
wealth. Far from taxing them heavily the third world
government usually favors them in many ways.

Herbie, I'm trying to understand how you read what
I'm writing and see third-world. True, third-world
countries as with most countries have many small
enterprises, but if you think I was proposing that
a small company competing head-to-head with a big
company is likely to win or that an illegal, punitively
taxed enterprise is likely to innovate, you've
misunderstood me.

The free market situation seems to inherently be a non-stable situation. Real free markets do not inhibit someone winning the competition (in fact, such inhibitions will inhibit the market in themselves), but when someone does win, the free market state is turned into an oligopoly state, which
1: Will take a long time to reverse, since, like so many above have pointed out, the producers will in this state control a lot of resources, and can use these to control competition
2: Will inevitably fail because there seems to be such an aboundance of resources on such few hands, and a lot of people will seek ways to get their hands on this (and given time, someone will succeed, and more will follow).

If we're to try to control this in any way, we should try to shorten the oligopoly phaze.

An other way free market situations may develop is the formation of cooperatives on both the producing and consuming sides, and as one side gains power, the other side tries to consolidate even more, and may in turn gain the power edge, this development happening when the actors in the market see the possibility for greater profit higher with cooperation rather than competition.
Examples of this may be found among other places in Norway (of which i know most):

Due to rising prices in groceries consumers got together and formed several cooperatives, to get a stronger position when bartering for prices.

Due to steadiy worsening prices for agricultural produce farmers got together and formed several cooperatives, to get a better position when bartering for prices.

See how the spiral might crank up?

Today most cosumer cooperatives are under the umbrella of COOP, which has turned multinational (really Scandinavia, but what the heck...) and has about 1/4 of the total grocery/supermarket market in Norway. Pretty big, and all owned by the consumers themselves (-> privately owned!).

Quite a lot of farmers sell their produce through 3 different cooperatives wich they own (-> privately owned!) (these are Tine (dairy), Prior (eggs and poultry), Gilde (meatwares)), each typically having between 50 and 80% of the market. The vegatable producers' cooperative went almost bankrupt once, and most vegetable producers now deliver through BAMA, which is NOT owned by the producers (and quite a lot of vegetable farmers are complaining about how profits seem to deteriorate).

And maybe international cooperatives will become a vital part of the global capitalism, as some of the consumers or some of the producers (most likely both sides) find it better to work together. I do not think they will gather such a large part of the market as has happened in Norway, I am quite sure that the norwegian situation is a effect of Norways rather small market, where there are "seats" for only a limited number of market actors before the market is more than full. In larger markets the differences between producer groups will be to large for them to cooperate, but we may see several competing cooperatives taking global market shares.

Maybe more later

KEE

I've got to go and get ready for a trial. But I think you guys have it all wrong. The reality is that Asia is eating alive and outcompeting the US and Europe today. Your merchantile models, in my view, are not very relevant nor even accurate in today's world. Korea has a larger GDP then all of the Middle East excluding perhaps Israel. Tel-A-Viv has a greater GDP then Syria. As for China they are growing so fast theat they are "distorting" normal pricing relationships for natural resources.

but when someone does win, the free market state is turned into an oligopoly state,

Only if the winner can use the power of the state to lock-out competitors.

Jeff exactly correct

I disagee to some extent. I do believe that they can hold competition at bay by prize/dumping functions at large. And that if a company is allowed to do this, competition will hesitate before entering competition (after seeing one of their own stripped off), thus inadvertently buying the large company time to recoup their losses before some other competitor pops up. Vital to companies acting this way is a total "hands off" policy from governments (some may call this support) and a total lack of anti dumping legislation (which is support in a way).
But I'm sure you disagree to this analysis. I can't follow this thread any more though, work is calling.
KEE

There is a couple of problems with the statistics. The problem with the statistics of the "freest" economies, is that it does not measure along a scale of socialism vs. libertarianism, but on the degree of capitalism, that include much more than taxes, welfare spendig and social regulation, but thjings like transparency and corruption. Actually, both Denmark and Finland are among the 15 or 10 most "free" economies, with the welfare state less Taiwan being ranked beneath Norway around 40. Using that statistic without informing the public will lead to the public misintepreting the results.

Another problem is the statistic claiming high intragenerational social mobility insiden the US. The problem is that it ranks people from the age of 16, meaning that about half the "poorest quintile" are actually student or even high school pupils! That actually scews the results, because when people think about the poor, they think about the working poor, not students living at home or having a part time job at McDonalds while living in low rent student housing. They have also excluded those becoming disabled(actually just beneath 6 percent of the workforce, "only" half of Norway) and those who have gone to jail, thereby excluding many "losers". Actually, the statistics showed in conjunction with the study at the Dallas feds actually clearly shows that the circumstances that determine your income are set early in your life, with your type of education etc.

Another problem is that he totally ignores relative poverty, just like any other libertarian, including rather dissapointingly Hayek. Global capitalism may speed up international growth and thereby combat absolute poverty, but it will make it impossible to do anything about relative poverty, or absolute poverty for that minority in every society that simply is not able to adapt. The thing about relative poverty is very interesting though, because it shows a severe lack of understanding of human nature, in which it ignores that fact that people seem to define what they need from what those around them have. It is also real practical effects of relative poverty, as social exclusion, the need to live in tough neigbourhoods and being unable to grasp the possibilities of the new world that most of the population have, with all the problems that passes on to your kids.

When it comes to a monopoly, sure, you won`t get a hundread percent share in a free market, but when one actor have 90 percent or more of the market, you still have many of the harmful effects associated with a monopoly.

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