News Spain 1936-1937: Libertarian Socialism & Its Demise

[Cyrus]

There's no Businesses like show Businesses.

 

[Al68]

Marx's example here (assuming Marx's definition of "capitalist" to mean "employer" and "mastership" to mean "supervision of work"), is a perfect example of capitalism by my definition. The situation described is a voluntary agreement solely between the parties involved, with no mention of any third party involvement, such as a government, or any "economic system" being imposed.

There is a fundamental problem with the bit in bold.

In a free market (and more so in a idealistic "true" free market), others are involved in and affected by such 'agreements', even if they are not party to them.

When did I ever say otherwise? Of course a third party can be "affected" by someone choosing not to do what they want them to. That's why human liberty has opposition in this world.

Individuals being free to make agreements with each other, whether or not the agreement satisfies everyone else, isn't a "fundamental problem" to a libertarian. It's only a problem to those who want to use force to restrict such liberty, and that problem is pragmatic and subjective, not fundamental. It's a "ends justify the means" issue.

mheslep posted an interesting video (which I commented on in my previous post) in which Milton Freidman explains the "principle" of attaching a monetary value to a human life: this is an example of the 'economic costs' and systemic 'risks' that are seriously underpriced, when, and if, they are factored into these agreements.

Can you give an example of an agreement with such a thing "factored in"?

This is what makes free markets so very inefficient (and the taxpayers ultimately end socialising these inefficiencies - the most recent example of this being the bank bailouts in the UK and US).

Total nonsense. That problem was caused by government socialist policy. Many problems are possible in a free market, but that one wasn't. But I don't want to sidetrack this thread since this issue has been discussed extensively in other threads.

 

[AlexES16]

Ever hear about places like Lake Karachay, Dzerzhinsk or Chernobyl?



Don't forget Cambodia.

Funny how everyone who advocates this uses the argument, "OK, it's failed every time we've tried this, it's led to more misery and suffering - but this time, things will be different." If you do the same thing, why expect different results?

Well that's the capitalist propaganda but sense Stalin got in power the socialist movement was split. Also you fail in undestading the theory of socialism so you can see that those totalitatian not democratic goverments we not socialist. So at the end you are traped in XX century ignoring all the damage to the environment and future of human species that capitalism is doing.

 

[AlexES16]

Fair enough, but were those failed "socialist" states really socialist at all? Do you really think that the leaders of North Korea, Cuba, Russia, and China really wanted a socialist state, or did they disguise it as a socialist state in the attempt to give more power to the state, and as a result those leaders had more power. Last time I checked communism is about equality and the greater good yet none of those failed communist states had any equality at all. In those examples, communism didn't fail, it was the leaders that failed. These states used the name of communism to form totalitarian militant governments which is just as far from democracy as it is communism.

Thank you! At least you understand this!. If you wana have Socialism first you need democracy so there is no great leader, also you need a educated nation so people don't get used by "great leaders" it supost to be the government of the people not the government of the leader and PC

 

[AlexES16]

An example of the fail that capitalism makes is my country El Salvador. You can even watch the latest news in my country,massacre in a urban Bus, massacre in Zacatecoluca, massacre in etc and etc. Oh and guess what the last 20 years we have a government that applied all the free market reforms, it privatized a lot of public industries, a lot of free trade, a lot of Milton Friedman economics. You can even see that El Salvador is one of the most "free" countries in the world. The poverty on the rise the maras on the rise(ever heard about mara MS salvatrucha and 18th street), well i will have luck if i don't get killed one of this days by machetes or they come to my house and kill all my family. And 20 years of a market economy and no real progress, No social inversion, just let all to the magic hand of the market, if you use the government you are communist so don't use it, just to protect the private property. And the same propaganda that goes "socialist are dictators, they don't want democracy, USA will stop "helping us" and all the mumbo jumbo". So here in my country we have a lesson, market is killing our people, we need more social inversion and if that is socialism then we want socialism. At europeans talk about a social market economy, Oh and if you come with Cuba and Venezuela they are 55 and 48(respectively) places above in humand developmet.

 

[vertices]

That's a hypothetical ('suppose'), provided to counter the questioners $200,000 thesis. No where in the video does Friedman claim a value on human life, nor would I expect him to do so as it would be meaningless.

To me it sounded like a rhetorical question. It sounds as though he (MF) wouldn't be prepared to pay that much.

Again the assertion. I've provided an argument (reputation) as to why this is not so. Arguing at the margin how safety is priced is a reasonable discussion, arguing that it is unpriced is not.

sorry, typo - ofcourse I meant 'underpriced' (although in some cases, externalities are most definitely unpriced)

How's that? The memo, revealed or not, doesn't change the publicly available information on the number of fatal crashes, which people can compare to other vehicles. When I referred to reputation above, I meant the safety reputation the vendor gets in public from the actual safety performance of its product, not what calculations the business may have done internally. Are all the products poisoning/exploding/breaking? Word gets around, and the reputation once lost, is very difficult to repair, hence the reason businesses value it.

And what do you think motivates businesses to publish such information? Government regulations ofcourse - most businesses would never voluntarily publish such information unless they were compelled to.

I have no problem with an efficient free market system, which is achieved only when it is properly regulated and systemic social risks properly priced.

Ok, let me play too. Businesses machine gun people in the streets, and like it. Businesses cause tornadoes, hurricanes and dry spells, all while twisting their mustaches. Businesses are in league with aliens to invade and subdue the world, so that they'll be spared.

 

[vertices]

When did I ever say otherwise? Of course a third party can be "affected" by someone choosing not to do what they want them to. That's why human liberty has opposition in this world.

Do you oppose it yourself?

Individuals being free to make agreements with each other, whether or not the agreement satisfies everyone else, isn't a "fundamental problem" to a libertarian. It's only a problem to those who want to use force to restrict such liberty, and that problem is pragmatic and subjective, not fundamental.

If a transaction between me and you, impinges on the rights of a third person (who has nothing to do with this transaction), this is a fundamental problem. What you are essentially advocating is anarchy.

Can you give an example of an agreement with such a thing "factored in"?

Take the Deepwater oil spill - BP seriously underpriced safety risks. Ofcourse taxpayers in UK and US taxpayers will have to socialise the most of the costs.

Total nonsense. That problem was caused by government socialist policy. Many problems are possible in a free market, but that one wasn't. But I don't want to sidetrack this thread since this issue has been discussed extensively in other threads.

Isn't that what I said - the government socialised the costs of the banks' reckless gambling. That's how it is under free market systems - you privatise profit and socialise losses.

 

[vici10]

This concept of people claiming the product of someone else's labor as their property has also been around for a long time. It's used to be called theft and slavery. Now it's called socialism.

This is what Adam Smith, said about claiming other people's labour under capitalism:

“The profits of stock, it may perhaps be thought are only a different name for the wages of a particular sort of labour, the labour of inspection and direction. They are, however, altogether different, are regulated by quite different principles, and bear no proportion to the quantity, the hardship, or the ingenuity of this supposed labour of inspection and direction.

... and the owner of this capital, though he is thus discharged of almost all labour, still expects that his profits should bear a regular proportion to his capital.

...In this state of things, the whole produce of labour does not always belong to the labourer. He must in most cases share it with the owner of the stock which employs him.

Wealth of Nations Chapter6.
http://geolib.com/smith.adam/won1-06.html

So according to Adam Smith, capitalists entitled to the portion of other people's labour just by the legal fact of ownership of capital.

 

[Al68]

Do you oppose it yourself?

No. That's why I don't think you're obligated to paint my house on the sole basis that your decision not to would "affect" me. Being "affected" is not a justification for restricting the liberty of others.

If a transaction between me and you, impinges on the rights of a third person (who has nothing to do with this transaction), this is a fundamental problem. What you are essentially advocating is anarchy.

Nonsense. I never advocated anyone's rights being violated. For example, imprisoning someone for contracting a murder doesn't restrict his right to contract, it restricts his right to murder. Advocating for the right to make agreements isn't equivalent of advocating any action they agree to perform.

That's not what the right to contract means, and there is no reason for you to pretend to not know that.

Take the Deepwater oil spill - BP seriously underpriced safety risks. Ofcourse taxpayers in UK and US taxpayers will have to socialise the most of the costs.

Maybe you misunderstood my question. I asked if you could provide an example of an agreement in which the value of human life is factored in.

Isn't that what I said - the government socialised the costs of the banks' reckless gambling. That's how it is under free market systems - you privatise profit and socialise losses.

Socialist policy caused the initial problem, as has been discussed extensively in other threads. Who's idea do you think it was for Fannie Mae and Freddie Mac to bribe banks into issuing toxic mortgages? Bottom line, there was never any private demand for the toxic mortgages. The demand for them was artificially created by government socialist policy.

Yes, I blame the banks that that went along with Fannie and Freddie. They should have declined despite the fact that Fannie and Freddie insisted that bad mortgages be mixed with good ones or they wouldn't buy any of them. My bank never went along with it, and like many others that refused to go along, did just fine.

Again, this belongs in a different thread so it won't sidetrack this one.

 

[Al68]

This concept of people claiming the product of someone else's labor as their property has also been around for a long time. It's used to be called theft and slavery. Now it's called socialism.

This is what Adam Smith, said about claiming other people's labour under capitalism:

“The profits of stock, it may perhaps be thought are only a different name for the wages of a particular sort of labour, the labour of inspection and direction. They are, however, altogether different, are regulated by quite different principles, and bear no proportion to the quantity, the hardship, or the ingenuity of this supposed labour of inspection and direction.

... and the owner of this capital, though he is thus discharged of almost all labour, still expects that his profits should bear a regular proportion to his capital.

...In this state of things, the whole produce of labour does not always belong to the labourer. He must in most cases share it with the owner of the stock which employs him.

So according to Adam Smith, capitalists entitled to the portion of other people's labour just by the legal fact of ownership of capital.

Nonsense, that's obviously not what he said or meant. He never said anything about anyone "claiming" or being "entitled" to anyone's labor. He was obviously talking about voluntary agreements. And such voluntary agreements aren't "under" capitalism, they comprise capitalism.

And of course the "whole produce of labor" exceeds the wages paid. And the wages paid exceed the value of the labor to the worker. The combination of the investment and the labor has more value than the sum of their values separately. That's the whole point of the agreement, and how wealth is created in a free economy.

 

[vertices]

No. That's why I don't think you're obligated to paint my house on the sole basis that your decision not to would "affect" me. Being "affected" is not a justification for restricting the liberty of others.Nonsense. I never advocated anyone's rights being violated. For example, imprisoning someone for contracting a murder doesn't restrict his right to contract, it restricts his right to murder. Advocating for the right to make agreements isn't equivalent of advocating any action they agree to perform.

So you agree that restricting the person right to murder by imprisoning him, is justified? Say the police were to wiretap the hitman and were able to stop him, would it be justified for them to do so - ie. to use force to prevent him carrying out his contractual obligation (to murder the third party)?

That's not what the right to contract means, and there is no reason for you to pretend to not know that.Maybe you misunderstood my question. I asked if you could provide an example of an agreement in which the value of human life is factored in.

11 people died don't you know?

The deaths could have been avoided if BP hadn't underpriced safety risks, despite warnings from its own engineers: http://www.ft.com/cms/s/0/688fbaa4-77eb-11df-82c3-00144feabdc0.html

Despite this and other warnings, BP chose the more risky casing option, apparently because the liner option would have cost $7m-$10m more and taken longer

So there we have it - BP was not prepared to spend $10 million to significantly slash the risk death.

Socialist policy caused the initial problem, as has been discussed extensively in other threads. Who's idea do you think it was for Fannie Mae and Freddie Mac to bribe banks into issuing toxic mortgages? Bottom line, there was never any private demand for the toxic mortgages. The demand for them was artificially created by government socialist policy.

You clearly don't know what you are talking about.

Leaving aside your absurd suggestion that Freddy Mac and Fanny Mae, credit rating agencies(!), "bribed" Investment Banks like Morgan Stanley or Lehmans (which is a bit like a tramp bribing Tiger Woods for no reason), your assertion that there was no private demand for ABCs and CDOs is demonstrably false. The demand was created by the banks themselves because they wanted to increase their 'risk' portfolios; not by the "socialist" Bush Administration.

 

[mheslep]

t Freddy Mac and Fanny Mae, credit rating agencies(!).

No, they are not credit rating agencies. They are home loan originators, as the the full name Federal Home Loan Mortgage Corporation makes clear.

 

[vici10]

Nonsense, that's obviously not what he said or meant. He never said anything about anyone "claiming" or being "entitled" to anyone's labor. He was obviously talking about voluntary agreements. And such voluntary agreements aren't "under" capitalism, they comprise capitalism.

And of course the "whole produce of labor" exceeds the wages paid. And the wages paid exceed the value of the labor to the worker. The combination of the investment and the labor has more value than the sum of their values separately. That's the whole point of the agreement, and how wealth is created in a free economy.

Bellow there is a citation from Adam Smith about what you call “voluntary” agreement between workers and capitalists:

[11] What are the common wages of labour, depends everywhere upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour.

[12] It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.

[13] We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is everywhere a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things, which nobody ever hears of. Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy, till the moment of execution, and when the workmen yield, as they sometimes do, without resistance, though severely felt by them, they are never heard of by other people. Such combinations, however, are frequently resisted by a contrary defensive combination of the workmen; who sometimes too, without any provocation of this kind, combine of their own accord to raise the price of their labour. Their usual pretences are, sometimes the high price of provisions; sometimes the great profit which their masters make by their work. But whether their combinations be offensive or defensive, they are always abundantly heard of. In order to bring the point to a speedy decision, they have always recourse to the loudest clamour, and sometimes to the most shocking violence and outrage. They are desperate, and act with the folly and extravagance of desperate men, who must either starve, or frighten their masters into an immediate compliance with their demands. The masters upon these occasions are just as clamorous upon the other side, and never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combinations of servants, labourers, and journeymen. The workmen, accordingly, very seldom derive any advantage from the violence of those tumultuous combinations, which, partly from the interposition of the civil magistrate, partly from the necessity superior steadiness of the masters, partly from the necessity which the greater part of the workmen are under of submitting for the sake of present subsistence, generally end in nothing, but the punishment or ruin of the ringleaders.

Wealth of Nations, chapter8
http://geolib.com/smith.adam/won1-08.html"

According to this passage from Adam Smith, this is not a voluntary agreement but a constant struggle between workers and their masters.

 

[mheslep]

[...]The masters, being fewer in number, can combine much more easily; and the law, besides, authorizes, or at least does not prohibit their combinations, while it prohibits those of the workmen.

Yes in Smith's Britain, but the law today of course is exactly the opposite in most all industrialized countries: Anti trust laws prohibit business price collusion, while employee unions are not only legal but encouraged by law.

 

[vici10]

Yes in Smith's Britain, but the law today of course is exactly the opposite in most all industrialized countries: Anti trust laws prohibit business price collusion, while employee unions are not only legal but encouraged by law.

Which law do you refer to that does not allow capitalists to combine to drive wages, as opposed to prices, down?

 

[Al68]

So you agree that restricting the person right to murder by imprisoning him, is justified? Say the police were to wiretap the hitman and were able to stop him, would it be justified for them to do so - ie. to use force to prevent him carrying out his contractual obligation (to murder the third party)?

Of course. But murder is a crime independently of the contract. And while the victim is a third party to the contract, he is not a third party to the murder being defended against.

11 people died don't you know?

The deaths could have been avoided if BP hadn't underpriced safety risks, despite warnings from its own engineers: http://www.ft.com/cms/s/0/688fbaa4-77eb-11df-82c3-00144feabdc0.html

So there we have it - BP was not prepared to spend $10 million to significantly slash the risk death.

Maybe you misunderstood my question. I asked if you could provide an example of an agreement in which the value of human life is factored in.

Leaving aside your absurd suggestion that Freddy Mac and Fanny Mae, credit rating agencies(!), "bribed" Investment Banks like Morgan Stanley or Lehmans (which is a bit like a tramp bribing Tiger Woods for no reason), your assertion that there was no private demand for ABCs and CDOs is demonstrably false. The demand was created by the banks themselves because they wanted to increase their 'risk' portfolios; not by the "socialist" Bush Administration.

Complete hogwash. Freddie Mac and Fannie Mae are home mortgage buyers created by government to buy risky mortgages so that people with bad credit, high debt to income ratio, no down payment, etc could get a home loan.

They were specifically chartered to encourage banks to issue mortgages they would not otherwise issue because they're "toxic".

Blaming the bad result of this on a "free market" is preposterous, and only claimed to mislead people who don't know any better.

 

[Al68]

According to this passage from Adam Smith, this is not a voluntary agreement but a constant struggle between workers and their masters.

Still nonsense. The fact that the parties have opposing interests doesn't make an agreement involuntary. Parties to a voluntary contract always have opposing interests regarding the desired price for goods, services, or labor.

And Adam Smith was obviously not referring to a free market in that passage: "We have no acts of parliament against combining to lower the price of work; but many against combining to raise it."

If your interpretation of Adam Smith's writings resemble the writings of Marx, you just might be misconstruing them.

 

[mheslep]

Which law do you refer to that does not allow capitalists to combine to drive wages, as opposed to prices, down?

In the US the Sherman Anti-trust act for example. Though typically associated with price fixing, Sherman applies to restriction of competition of any kind. See, e.g.:


http://www.frostbrowntodd.com/anti-trust_law_in_the_work_place_12-19-2007/

All exchanges of wage and benefit information among employers are subject to this anti-trust scrutiny.

 

[vertices]

Of course. But murder is a crime independently of the contract. And while the victim is a third party to the contract, he is not a third party to the murder being defended against.

I was kind of expecting a more sophisticated justification for this absurd idea.

So if a contract explicitly states that the contractee must kill someone who is not party to the contract, the contract is in and of itself perfectly valid?

It's not so much absurd as it is meaningless. It's do with the fact that we are, erm, humans - moral agents, who assess our actions in the terms of the range of predictable consequences. A contract stipulates a list of actions: what you are clearly saying is that responsibility for individual actions (as stipulated in the 'contract') is relegated elsewhere.

And btw you do realize that such contracts would be null and void in all democracies (and even dictatorships)?

Maybe you misunderstood my question. I asked if you could provide an example of an agreement in which the value of human life is factored in.

The agreement was between BP and its contractors. The 'value' of human life (alongside the risks of environmental damage) was most likely factored in because inter-governmental regulations impose health and safety standards, but it was aggregated with other risks such as damage to BP's reputation, costs of repair, compensation payouts, etc

It's amazing that BP were not prepared to pay $7 million to slash the costs associated with ALL these risks aggregated together.

Blaming the bad result of this on a "free market" is preposterous, and only claimed to mislead people who don't know any better.

And again: I only blame it on an inefficient free market. It is clear that the risks of securitised pools of subprime mortgages were seriously underpriced by credit rating agencies at the behest of Investment Banks who threatened to take their business elsewhere if they did capitulate to their demands: http://levin.senate.gov/newsroom/release.cfm?id=324129

They [credit rating agencies] also allowed the drive for profits and market share to affect ratings

 

[mheslep]

Credit Ratings Agencies by the way are creatures of and http://en.wikipedia.org/wiki/NRSROs" . Relevant law:
http://www.govtrack.us/congress/bill.xpd?bill=s109-3850&tab=summary

 

[Office_Shredder]

Credit ratings agencies are regulated by the federal government, and therefore are creatures of the federal government?

 

[mheslep]

Credit ratings agencies are regulated by the federal government, and therefore are creatures of the federal government?

Not just regulated. The federal government also designates them, that is, picks them. A very select club. Either you or I with the proper expertise and regulatory compliance can start a local bank (at least in the US, in my state), especially if we think the existing local banks under perform. Similarly we can start an insurance company (not so much an underwriter). But even with perfect regulatory compliance and convincing evidence that we're getting unreliable evidence from existing credit rating firms, we can't become a Nationally Recognized Statistical Rating Organization without, as far as I can see, extraordinary political blessing akin to an act of God.

 

[Office_Shredder]

Not just regulated. The federal government also designates them, that is, picks them. A very select club. Either you or I with the proper expertise and regulatory compliance can start a local bank (at least in the US, in my state), especially if we think the existing local banks under perform. Similarly we can start an insurance company (not so much an underwriter). But even with perfect regulatory compliance and convincing evidence that we're getting unreliable evidence from existing credit rating firms, we can't become a Nationally Recognized Statistical Rating Organization without, as far as I can see, extraordinary political blessing akin to an act of God.

You can rate whatever credit you want without getting government approval. Essentially what you have is a private/public partnership here: NRSRO's assign a rating to different bonds etc. which the government uses for regulatory purposes. If this didn't exist, the government would have to assign its own rating to all these bonds and would de facto become the sole credit rating organization.

The wikipedia article even describes how some believe that the existence of an NRSRO label has increased competition amongst credit rating organizations. Basically, you wouldn't be able to start a credit rating agency because nobody would listen to you even if NRSRO status didn't exist

Also, do you actually know how one gets NRSRO status? Do you have to be lucky to get picked, or is it that every company complying with certain regulations can apply and be granted the status automatically (from their website it seems like you just fill out a form, and prove you satisfy certain requirements)?

The Credit Rating Agency Reform Act of 2006

http://www.govtrack.us/congress/billtext.xpd?bill=s109-3850

seems to back this also

GROUNDS FOR DECISION- The Commission shall grant registration under this subsection--

(i) if the Commission finds that the requirements of this section are satisfied; and

(ii) unless the Commission finds (in which case the Commission shall deny such registration) that--

(I) the applicant does not have adequate financial and managerial resources to consistently produce credit ratings with integrity and to materially comply with the procedures and methodologies disclosed under paragraph (1)(B) and with subsections (g), (h), (i), and (j); or

(II) if the applicant were so registered, its registration would be subject to suspension or revocation under subsection (d).GROUNDS FOR DECISION- The Commission shall grant registration under this subsection--

(i) if the Commission finds that the requirements of this section are satisfied; and

(ii) unless the Commission finds (in which case the Commission shall deny such registration) that--

(I) the applicant does not have adequate financial and managerial resources to consistently produce credit ratings with integrity and to materially comply with the procedures and methodologies disclosed under paragraph (1)(B) and with subsections (g), (h), (i), and (j); or

(II) if the applicant were so registered, its registration would be subject to suspension or revocation under subsection (d).

basically says that if the application materials are complete and good, it has to be accepted. This is fairly recent of course and I don't know what the procedure was like before this bill was passed

 

[Al68]

I was kind of expecting a more sophisticated justification for this absurd idea.

So if a contract explicitly states that the contractee must kill someone who is not party to the contract, the contract is in and of itself perfectly valid?

What are you talking about? What absurd idea? That murder, and contracting murder should be illegal?

It seems either I made a serious typo somewhere or you have misconstrued something I said.

I said people have a right to enter voluntary agreements. A person obviously can only agree to do those things they could do without the agreement. Such agreements don't legally give anyone any claim against any third party. Is this not obvious?

 

[vertices]

What are you talking about? What absurd idea? That murder, and contracting murder should be illegal?

It seems either I made a serious typo somewhere or you have misconstrued something I said.

I said people have a right to enter voluntary agreements. A person obviously can only agree to do those things they could do without the agreement. Such agreements don't legally give anyone any claim against any third party. Is this not obvious?

A contract is a legally binding set of actions.

Murder is a crime.

So if a contract specifically states that the contractor is to murder a third party, this contract has to be null and void by definition.

So it is meaningless to talk about an absolute, unconditional "right to contract", "independent" of whether or not this contract impinges on the rights of third parties. The idea is even meaningless in anarchic systems, which rely on people 'cooperating' with each other (in a game-theory sense).

 

[mheslep]

You can rate whatever credit you want without getting government approval.

Meaning personally? As in, "I think the latest California Muni bond issue will likely default"? To what end? Nobody can effectively float a bond on the market without a NRSRO rating attached. As I understand it, the problem is with the buyers: banks and brokers are prohibited from buying unrated debt.

 

[Al68]

So if a contract specifically states that the contractor is to murder a third party, this contract has to be null and void by definition.

So it is meaningless to talk about an absolute, unconditional "right to contract", "independent" of whether or not this contract impinges on the rights of third parties. The idea is even meaningless in anarchic systems, which rely on people 'cooperating' with each other (in a game-theory sense).

Who is talking about such a thing? I have consistently said otherwise. Do you have me confused with someone else? Mixed up threads?

For a contract to be legal, the actions each party agrees to perform must be actions they are at liberty to perform. The actions that may be contracted are the same actions that may be performed without a contract. The right to contract doesn't imply the right to agree to actions which are illegal with or without the contract. A contract doesn't endow the parties to any "special" rights they don't already have. What would give you the idea that this wasn't the case?

Our disagreement was whether merely "affecting" a third party invalidates a contract. Clearly it does not. If an action agreed to in a contract affects a third party by violating their rights, then the contract isn't legal because the actions agreed to violate a third party's rights, not because they merely "affected" a third party.

 

[vertices]

Our disagreement was whether merely "affecting" a third party invalidates a contract. Clearly it does not. If an action agreed to in a contract affects a third party by violating their rights, then the contract isn't legal because the actions agreed to violate a third party's rights, not because they merely "affected" a third party.

If a transaction between yourself and myself affects a third person not party to this transaction, what we are doing, by not even bothering to consult them, is denying them personal autonomy, which is a violation of their (human) rights.

Corporations often pretend externalities don't exist, because it is not legally possible for them to deny the affected parties their rights.

 

[Office_Shredder]

Meaning personally? As in, "I think the latest California Muni bond issue will likely default"? To what end? Nobody can effectively float a bond on the market without a NRSRO rating attached. As I understand it, the problem is with the buyers: banks and brokers are prohibited from buying unrated debt.

There exist and have existed credit rating agencies that were not NRSROs. Hell, part of the process of becoming one is to have been a credible credit rating agency and to have people in the market back you up on that. So obviously there exists a market for non-NRSRO credit rating agencies

We can see here

http://www.defaultrisk.com/rating_agencies.htm

There simply are not a lot of credit rating agencies in the world, and not all the US credit rating agencies are NRSROs. If you want to use a non-NRSRO credit rating agency for regulatory purposes, you can ask the SEC to allow it.

The real reason you could not make a credit rating agency is because you have no credibility and no experience in rating debt, and reputation obviously means a lot in this market. It's not a government labeling issue that's stopping you

 

[mheslep]

There exist and have existed credit rating agencies that were not NRSROs.

Yes, but that's all irrelevant to the topic at hand, which was subprime mortage securities and their relation to credit rating agencies as connected in post https://www.physicsforums.com/showpost.php?p=2783651&postcount=349" by vertices and my response that they are 'creatures' of government. The non-NRSROs on your list have nothing to do with rating those kinds of (US) bonds, nor can they. Only NRSRO's have anything to do with that, that is those designated by the government. Given the utterly subjective rules in place from the SEC to select them:
"...adequate financial and managerial resources to consistently produce credit ratings with integrity..."