Salesmen Add Value In a Free Market

KMart just canned 700 appliance salespeople.  This is likely a good and inevitable decision when sales people are no longer necessary.  When we can go on the web and compare features and learn prices, of the extremely few options available, who need s a salesperson, who today just tries to rip you off with an "extended warranty."

Before I get back to salespeople, let me say something about entended warranty.  You already own, when you buy something, the right to "merchantability." That is to say, what you buy must last as long as such items normally last.  A car should last about ten years or 150,000 miles, a TV 20 years, a blender 5 years, and so on.  If not you have a claim against the vendor.

Now I bought a blender of top name brand from a large retailer.  The blender conked out after six months of light use.  I happened to have the receipt, and noticed in the instructions (which I read trying to revive the blender) a requirement that if the blender breaks, I should ship it, at my expense, to some place in Tennessee to have it repaired.  Well, a couple of problems, my relationship is with the retailer, not the manufacturer, and I bought a blender to mix drinks, not to ship it to Tennessee.

The receipt stated the retailer offered me a 90 day money back guarantee, and suggests after that I send it to Tennessee.  Well, the law allows a five year guarantee.  But as a practical matter on a $35 blender there are no good options.

So I went in and bought another blender, the exact same one.  I took it home, swapped the new parts out the broken one, and I returned the broken one a few days later with the recent receipt for a refund, getting around their system they set up to get around my property rights.  I made the system work the way it is agreed to work.

Now, back to appliance salesmen.  A man across the street raised a family of twelve kids on the salary as an appliance salesman.  This was back when we had a much freer market, there was far more innovation, and far ore options.  In a free market a salesperson is critical because they match the needs of the customer to the right product.  they also communicate the needs of the customers to the manufacturers.  Under this false right of intellectual property, we have a much diminished innovation and  the division of labor that comes from innovation.

So we end up with so few options, that who needs a salesperson?  An internet check on the comparisons and prices will get you to a decision (from a narrower range of options), no salesperson required.

The two great inhibitors to our economic recovery are IPR and government regulation.  IPR constrains innovation, and govt regs crush anyone who finds an opportunity.  Taxes are not the problem, because it is the ultimate consumer who pays all of the taxes ever paid on any given product.  And proof taxes do not really matter is the govt actually cuts those once in while.

Now the tax code does cause govt subsidized businesses to launder profits overseas, like Google, GM, General Foods, and GE.  (General Foods, General Motors and General Electric all were formed when USA decided to become empire, and these companies would provide all of our food, motor and power needs.)

It is this benefit of laundering of money overseas that has driven these govt subsidized businesses to offshore to China, which in turn has gained our precious IPR.  Under license, of course.

The Chinese see our system for what it is, and have refused to get caught in it themselves, but have certainly agreed to take it over.  Labor action in USA may challenge the status quo.  Labor action in China will not challenge the status quo in USA.  So no labor, no challenge.

What labor we have is govt unions complaining they need more.  And more.  Govt unions are house unions, something repugnant to any labor movement.  But labor leadership in USA was bought off, or in the case of Hoffa, murdered.  It is what we get when we define our nation as a monopoly on violence within our territory.

Cut government back to 1950 levels, and raise taxes to pay off the debts, repudiate any loan guarantees to private companies, end the wars, and watch USA become the engine of growth the world will admire.

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Law Enforcement

If you read the comments section of this article regarding the FBI and others busting and ex-CIA agent scamming people with an Indie Film studio, what emerges from the comments (almost always the best part of any article) is the perpetrators were fairly well known in Hollywood.  Which means at the same time law enforcement is late to the game, and the bad guys reputation was closing in on them anyway.

No doubt these people could go on for years taking money off the wealthy, and no doubt the occasional foolish working man, and spending it on themselves.  It is what our government does, and no one seems to mind.  Almost nobody would agree to give money to someone on the strength of a telephone cold-call pitch.  But there are enough such people to make it worthwhile to scam artists.

Too bad the telephone was invented in the era of intellectual property rights, which means one man could own the whole thing.  So the government stepped in and applied a bad aid to an atrocious wound, a theory of natural monopolies, such as the telephone.  The solution to the first problem the government created, was a second problem, that a natural monopoly like telephone service had to be allowed but regulated.  And in fairness, everyone would get a telephone.  What a mess!

Now we have a system where anyone can reach anyone else by phone, to the point where I just do not bother with a landline (but they are better in audio quality and service reliability).  The internet followed on so now we have mountains of spam.

If we had no intellectual property rights, we'd have none of these such scams.  The bad guys would not be able to get on the network, because your phone company would protect you as a customer.  Compton California has plenty of plenty of armed police and much crime.  Disneyland has no (visible) armed police and almost no crime.  Walt won't have crime in his town.  Private companies protect their customers.  Airlines allow their customers to be abused because they too are heavily subsidized.

Ronald Reagan said "If it moves, tax it; it it keeps moving, regulate it; if it stops moving, subsidize it." It's nice being controlled by the government, because you never have to worry about competition or failure.  The government picks the winner and losers, and once picked, you are set.

Why pay money to investigate, prosecute and jail these criminals.  In time they would cross the wrong person, who would offer tax-free justice.  The check on such actions would be community opinion, such as we see in this original case, where the ex-CIA fellow and his crew have a bad reputation.

Benjamin Franklin noted how Indians handled these matters, another example of anarchy, order out of chaos.

The Indian men, when young, are hunters and warriors, when old, counselors; for all their government is by counsel of the sages; there is no force, there are no prisons, no officers to compel obedience, or inflict punishment. 


For all of their kindness and generosity that Franklin notes, he did not mention the fact that the Indians carried tomahawks.  An armed people are always a polite people.  We need to be far more polite.

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Communism is Better then Capitalism

But I like free markets best. What I like about communists, besides the fact they allow free markets, as opposed to capitalism, is that Marxists get their facts right.  At least it is a start.  Here is the Premier of China:

Premier Wen Jiabao has himself described the economy as “unstable, unbalanced, unco-ordinated and ultimately unsustainable”.

Eight of the nine top politicians in China are engineers. Something like 49 of the top 50 in USA are lawyers.  Can you imagine a lawyer like Obama or any other USA politician accurately assessing our economy?

If we dare not even mention the truth under capitalism, how are we supposed to even begin to address the problems.  If we rolled back regulations to say 1970 (and reinstituted property rights to assure a clean environment) and then govt pending back to 1990, our economy and credit would soar, and we'd be out of this mess in five years.  AS it is now, we have chosen to drag this out for 30 years, and throw in a war were bound to lose.

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Another Start Up Funder

indiegogo.com is a but different than kickstarter.com, but it seems to be offering the same "democratization of funding."  If anyone has experience with these, I'd be glad to hear.

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More Burke on Instruction

After watching all of the videos form the 1970s and 1990s of James Burke and connections at that documentary video channel,   I realized there was an episode I dod not see, regarding perspective drawing and all of the changes that followed.  Well I went digging and found a series form the 1980s that included it...  this is probably the best of everything Burke has done... on the bottom of the page is all ten episodes, my favorite being three, but all will reward you.

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Exploited Labor, NGOs, Banks and Econ Dev

Rebecca emailed me, apropos of exploited labor discussion:

“Oppression is not a sustainable solution.”

To which I agreed, and inquired as to overcome the bad guys.

To which she replied,

“How do you overcome the bad guys? 

Simple. 

Stop focusing on the bad guys. There are plenty of good guys with innovative, community, global serving ideas.

Tell the world about good ideas.

(Name removed) is a non-profit organization dedicated to helping children and adults develop the necessary skills to be successful, positive contributors to their multi-cultural, bilingual community.”

To which I replied,

J: I'd be happy to argue this point with you, but it might get tough.  It does start with the bad guys, who took these peoples homes, and relocated them.  The bad guys did not respect the locals property rights.

Now these dispossessed people allow themselves to be under the aegis of USA-based assistance.  This is strange.  These people do not lack talent or intelligence.  There is nothing (name withheld) is doing that they cannot do for themselves.  Indeed, the "free english lessons" so they can work for their oppressors, sure sounds discouraging.  Not to mention the "free English lessons" rather ruins the job of the local who hoped to make a living teaching English.

These people are also rational.  As long as Americans are present, then they enjoy some level of protection.  When the Americans leave, the protection is gone, and anything they have will be taken.  To maintain a nice environment with no USA presence is to invite scrutiny from the bad guys.

Ultimately the bad guys are backed by USA.  People in Mexico who resist the bad guys will come up, ultimately, against USA power.  We need to withdraw USA support and assistance for Mexico, which surely can flourish without our intervention.  Certainly a different ethic, perhaps with even the same people in charge.

The people do not want charity, they want freedom. (Name Withheld) may seem like a good thing, but it is a band-aid on a wound from a knife in the back.  Better there is no knife in the back to begin with.

Why after 100 years of this kind of activity, for example on USA indian reservations, there are no examples of success? I recommend Michael Maren's "Road to Hell" about the "good guys" with innovative, community global serving ideas. It does not help to bring in charity.  It does help to bring in business.  If we really want to help people overseas, we'd make markets here for their products.  USA ships cheap frankenfoods in and destroys their ag economy, and then refuses to let them export garments.  The NGOs and charities are just palliative care for cultures targeted for euthanization.

 We do need to expose the bad guys, and trade with the good guys.  The bad guys care what others think.  The good guys want to be self-employed.

R: So can you see anything of value coming out of the bank helping communities to creating sustainable towns. Or it sounds like you think the community would be better figuring it out on their own? 

J: It is a non-sequitor to say these banks help communities create a sustainable town.  Banks don’t create anything, anymore than a restaurant or a doctors office does.  Properly constituted a bank may be necesary to create a town, but never sufficient.

It's not a matter of people figuring it out on their own, people know what to do: serve a customer.  it is a matter of being free of force and fraud which so distorts the market.

R: Many good, true points.

Thanks for the book recommendation. I imagine you have read Stiglitz.

J: Only to know he argues govts can some times do better than the market, and his proof is against the Chicago school, which is not free market.  The problem is these guys extrapolate from the narrower filed of market to all human activity, and argue against each others straw men.

R: Globalization is tricky. There are Americans living in foreign lands. Tourism is a big industry. Locals do make more money when they speak English. Along the lines of what you are saying, i've seen many locals learn English as they go. No classwork. No American ex-pat volunteer teaching them. They pick it up. Very impressive. Survival is a powerful motivator. The reality is, there will be foreigners living in different lands.

J: No objection to anyone living anywhere...  but the USA is a great distorter of local economies, causing winners and losers where once there was stability.   Clearing the banyan trees off the coasts to make room for resorts, and converting the fisherfolk to room service seemed like a good idea, but the Tsunami got them all.  If Americans want to live in Indonesia, don’t bring McDonalds and USA subsidized corn and its frankenfood by products, soy oil and sodium with you.

R: Yes, there should be fairness in trade. It seems like it would be beneficial if more products were made and sold locally in all countries.

J: Cheap american food much distorts the economy... most handicrafts are made from ag bi-products... kill ag, kill handicrafts. Next the local politician who has a Harvard MBA is “our man in wherever” who is advancing USA interests in that country, writing laws that benefit himself and the USA based Harvard MBAs.

R: So, I agree. it's a mess!  I'm curious as to what you think of this business model/idea/concept. Just met this guy, and I'm trying to wrap my head around it. See the value, but also poke holes. Thoughts?

J: the microloan thing has turned out to be not as advertised, and new iterations of development banks are coming up.  These programs all have the same elements: big money for the promoters, potemkin villages for public relations, debt trap for the villagers, but eventually it goes down in smoke as well.

There is a reason why the 3 major religions forbid “interest” .. any interest, any rate any time frame.  Any interest deal leads to trapping the borrowers. Trapped borrowers are not free.

The people these program purport to help do not need low interest loans, “education” or anything else.  They need freedom... free to contract, free from force or fraud.  ML King said the USA is the #1 source of violence in the world.  True.  Still is.  We generally back the bad guys.  The first thing we can do is bring the troops home.  The second thing we can do is start trading.

The Chinese are trading worldwide, with no troops, and getting good results.  All of those uprisings are against US-backed regimes, except for Libya, in which the uprising is usa backed.

It’s easy to pull money together for a program, very hard to make a business go.  Self-employment is necessarily self-transformation.  These people need us to behave ourselves, not give them a handout.

R: You’re right, those banks have not helped at all. Does that mean it is not humanly possible for there to be a business structure and strategy that could put profits and investments back into that very same community? And is it really not possible you can call it a bank? And it operates like a bank in ways that money is deposited, loans are offered, fdic insured. Or would it have to be called something other than a bank because that term is too egregious?

J: How do you define a bank?  if you mean the modern definition, then they will do for the town what BofA has done for America... unemployment, foreclosure, war, widening the gap between have and have nots...  you cannot make a drink with arsenic and expect good intentions to make a difference...  these aren't banks in the free market sense of the word.

Order naturally flows out of chaos, and if people are given freedom from intervention, and freedom to contract, they will work out a just and equitable polity.  In time they may give it up, as we have in USA, or in time it may be sustainable such as in Hong Kong.  Yes, learn what the good guys are doing, but don't accidently join the bad guys.

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Money and the Plague

Money is the one commodity that emerges from all commodities to act as a medium of exchange.  Not everyone will take fatback in change in a transaction, but everyone will take gold.  All commodities, more or less, will be used as a store of value given some circumstances, with gold the most likely commodity to be so employed.  Hence, money is not a store of value, but gold is and when gold is proffered as money, it retains its commodity faculty as well.  So, money is a medium of exchange. And gold is a store of value. When gold is money it is a medium of exchange and a store of value.

Of the many attributes that recommend a commodity as money, rarely listed for gold is gold's antibiotic properties.  Silver is used as money, and so is copper, and they both have antibiotic properties.  Before refrigeration, a silver coin might be dropped in milk to keep it fresh longer, although raw milk need never be refrigerated.  Your fear of raw dairy is a conditioned reflex, brought to you by the dairy board, who desires you fear independent dairies, or a preference for wholesome food, which is often one and the same. The longer it stays out, the more different foods it becomes.  If it happens to spoil, then throw it away.  Otherwise eat the curds, whey, sour cream, or cheese, depending where in the process you dive in.  But I digress.  Do check out the link above, and see the man who turned blue treating himself with silver.  It is permanent.  Makes one wonder if the Buddha is depicted as blue-skinned is accurate.

As new metals are discovered, the ones that are antibiotic by non-toxic also become in demand as bullion, that is money.  Rhodium, palladium, platinum are all examples.

When world trade was a matter of merchants arriving in Baghdad with silk-laden camels, the goods were exchanged, moved from camel to cart or boat, and gold and silver in payment.  These coins were antibiotic.  Nothing could live on them.  Disease could not be spread.

There was also world trade along the mediterranean, with Phoenicians trading English nickel for Levant commodities. We are told the plague showed up when an expansion of world trade brought ship-borne rates with plague carrying fleas into new markets, so Europe experienced what the American Indian experienced 300 years later.

Perhaps there was another venue as well.  The plague showed up at the same time and place paper currency began to show up.  it would be an interesting master's thesis in economics to research this.  There are plenty of records in plague areas of both currency introduction and the plague.  Coincidence or cause and effect?

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When the Feds are destroying particular small businesses, for example family farms, they bring in local police for back up and familiar uniformed presence, to assure more compliance.  What is amazing, and should be understood, is the alacrity with which local police are happy to go along for the ride, even if they are destroying the local tax base that feeds them.

Some doubt is being cast on the story of a swat team collecting on a student loan, where a private citizen has run down this story, while Fox is running its usual "blame the victim" angle. The remarkable thing about this story is how difficult it is to get any information. The HuffPost has an article and in the comments section info from the lawyer for the victim.  Bottom, line this is about the department of ed, a swat team and student loans.  Nonethelesss, the raid had local police as back-up, and they say they were just along for the ride.

  All of this is just a result of the bad economic policies, and those in government turning to their ultimate tool, violence, to govern for the sake of governing.

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