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1. 

   Eva

   02/18/12 - 2:45 am

   

   I wendor if the major obstacle to all kinds of rule changes to create more free (more efficient ) markets is lack of well-functioning social security network.Imagine a fantasy world where unemployed people could sustain a lifestyle akin to when they were employed (or at least akin to the lifestyle of typical employed people) while they looked for work, while at the same time not decreasing their incentives to find new work, or work hard at their job. I realize this is a fantasy world that might not even be logically self-consistent. However, in such a world we do all kinds of free market things like let US automakers fail, maybe even let banks fair, support free trade, and, as support corporate raiders as you now mention. Because it seems to me, as you say, we resist these things because we have an instinct against causing harm to people we view as innocent. The worker making car radios for example is seen as innocent of the decisions of automotive executives so we prop up care companies, even though that supports poor decision-making on the part of those executives, to spare the worker the injustice of losing her job. However in the fantasy world, we don\’t care so much about this person losing her job, because it is not such a hardship. And thus we can let the market work in ways that might make it much more efficient.I personally think the cost (in form of taxes, say) to support such social nets would be well worth their value however they carry another cost, in terms of reduced incentives, which is very hard to gauge and could very well be very destructive.I would personally like to see explored / developed something to the effect that if you\’re willing to put in the time / labor, the govt will guarantee to pay you to work. This provides the financial support of the above-mentioned fantasy world social net, but because it demands labor, it both provides incentive for individuals to avoid this arrangement and also provides society with some product or service in return. The major obstacle (and of course it\’s a huge one) is figuring out what labor to assign to such people and how much to pay, such that it does not interfere with the efficiency of the private market.