>>It is a subtle form > > of theft. It breaks the command "thou shalt not steal" which is fundamental > > to the success of a free-market economy. > > There is no such commandment neccesary. The free-market economy is > capitalism with instant communication via the net and without government > intervention, right? Anybody who acts deceitfully will not be dealt with > anymore. Reputation is your most valuable commodity in a free-market > economy. > Capitalism succeeds because it is based upon one of humanity's greatest > failings... Greed. However, without sufficient communication, capitalism > can burn itself out because there are no feedback mechanisms. This is why > we have had government intervention. The government institutes law after > law to regulate Capitalism into some sort of Socialism. Socialism would be > a great system to live under, however it doesn't take into account the one > thing that Capitalism does; Greed. > > However, now, with the instant world-wide communication provided by the > internet, the feedback mechanisms are now beginning to exist. Anybody who > doesn't ensure the purity of their product and passes it off as so will > not be in business for long. > > If there is no government intervention, an added responsibility is needed. > "Caveat Emptor" becomes completely true again. This opens up a very interesting question. Can an effective global free-market economy exist without state coercion to punish thieves and frauds? Can a free-market effectively operate when there is no common ethical standard governing the personal actions of the participants? The HYIP scammers discussed on this list have been quick to volunteer to provide a test case. All fraud is based on abused trust. Fraud cannot happen unless one person trusted the word, contract, or signature of another person. Since all internet transactions by definition require trust, scammers are able to pretend to be trustworthy in order to gain the money of another person by promising something in return. They then break their word and escape (theoretically) with the money. The scammer has an economic incentive to commit fraud. 1. There are millions of new suckers born every minute. 2. Due to the fact that the Internet has so MUCH information that individuals cannot possibly absorb it all, fraudsters will always be able to find new ignorant victims. 3. The victim learns "caveat emptor" at his own expense. The scammer is financially rewarded for teaching the victim this lesson. 4. It is very easy to create a new "identity" on the internet in order to get around the loss of trust problem. Trust is required in order for a free-market to work. As long as states are ineffective in raising the cost of fraud, scammers will continue to use the internet to rip people off. This will gradually undermine the free-market because 1. It will erode trust all around. 2. It reduces the efficiency of the market by raising transaction cost. If a large portion of the population really believes the ethic put forward that "Greed is good" then more and more people will resort to fraud, because after all, they are helping to educate suckers, and they are advancing themselves financially, and there will always be new suckers to educate, so there isn't much reason not to rip people off. The scam artist is really a benefactor to society, right? There are only two things that can keep the free-market working: fear of temporal consquences and fear of eternal consequences. In other words, the fear of the State and fear of God. The state has never been efficient in punishing thieves and never will be. The widespread fear of God is what allowed Western Civilization to arise because it created a society with a common ethical standard. (In London in the late 1600's pickpocketing was punished by hanging. However, it was so hard to catch pickpockets that many people had their pockets picked whilst standing in the crowd watching the execution of pickpockets. Even fear of death is not sufficient to prevent it, unless the state can catch the perp the majority of the time. It never will be that efficient.) Since the state has never been very effective at punishing thievery, fear of eternal retribution has generally been the basis of morality that has allowed civilization to exist. The free-market only works when the majority of the population has the self-governance to abstain from lying and stealing. If the morality of the MAJORITY of society dissolves, making it highly likely that you can't trust anyone's word, then the free-market fails. HK ________________________________________________________________________ Protect your privacy! - Get Freedom 2.0 at http://www.freedom.net --- You are currently subscribed to e-gold-list as: archive@jab.org To unsubscribe send a blank email to [EMAIL PROTECTED]
