Your instincts are not wrong, believe it or not. Unfortunately most economists fall short of the current state of their science. The first thing one needs to understand about economics is how rife it is with special pleading from selfish interests, because the output of economic science is so important to justifying public policy prescriptions. One thing that is constantly ignored is how government fiddling with the interest rate has a way of warping the capital structure into unsustainable configurations. You don't need an economics Nobel Prize to know that when Venezuela puts price controls on food the grocery stores go empty. But there are much more powerful special interests served by price controls on borrowed capital, so a lot of effort goes into willfuly bad "economics" aimed at justifying the practice.
Sounds like a really interesting book! I read the synopsis and the mainstream is sorely in need of a approach that acknowledges the extreme complexity and heterogeneity of an economy. Nothing irks me more than to see Paul Krugman speak of the world as if it can be quantified in a handful of "aggregate" variables and then blame his political enemies any time things don't go according to plan.
Congress has been much more lenient on the Defense Department than on publicly traded corporations. The Sarbanes-Oxley Act of 2002, a response to the Enron Corp and other turn-of-the-century accounting scandals, imposes criminal penalties on corporate managers who certify false financial reports. "The concept of Sarbanes-Oxley is completely foreign" to the Pentagon, says Mike Young, a former Air Force logistics officer who for years has been a consultant on, and written about, Defense Department logistics.
Like maybe don't put a Soviet-style central committee in charge of the money supply?
It's depressing to me that modern economies like the US and Europe can be so shot through with central planning, and then when they produce bad results everyone pretends it's the fault of some freewheeling laizzes-faire policy that never existed.
>Like maybe don't put a Soviet-style central committee in charge of the money supply?
The US didn't have this at the end of the 19th century and they suffered through multiple bouts of mass unemployment and deflation as a result. That's why the Federal Reserve was created.
Central planning can be done well or badly. It can't not be done at all.
The latter half of the 19th century up to WW1 was the USA's longest sustained period of high growth and high economic mobility. No central bank. Moderate deflation was the norm. According to the likes of Paul Krugman Americans should have been eating dirt and living in caves by 1913, but the exact opposite happened. Growth that the Keynesian technocrats have yet to match.
Except even then, government intervention in money fixed a certain price ratio of gold and silver. When that ratio no longer reflected the real market prices, chaos predictably appeared in the banking system. Go back over the history of the late 19th century panics and you'll notice one metal was fleeing the country and causing a lot of controversy. That's a government price control at work, not unfettered capitalism. The Federal Reserve Act was the wrong solution.
And yet even with the Fed, there's the stubborn little fact of the crash of 1920 -- bigger than that of 1929 -- and the rapid recovery that followed. The Fed, Congress and the Presidency did basically nothing and it was over in 18 months. So judging from the objective facts laying before us, it looks like the central planners perform best when they avoid central planning.
> According to the likes of Paul Krugman Americans should have been eating dirt and living in caves by 1913, but the exact opposite happened. Growth that the Keynesian technocrats have yet to match.
And my grandfather walked picket lines and got shot at. Robber barons were at the peak of their power. Children were exploited as laborers.
Let's also quote Anthony Trollope, a Victorian Londoner who was no stranger to pollution:
“Pittsburgh without exception is the blackest place which I ever saw, the site is picturesque, even the filth and wondrous blackness are picturesque.... I was never more in love with smoke and dirt than when I stood and watched the darkness of night close in upon the floating soot which hovered over the city.”
And that was in the 1860's! It only got worse from there until the 1940's.
Your rosy assessment of the country prior to the 1920's has no basis in historical fact.
>And my grandfather walked picket lines and got shot at. Robber barons were at the peak of their power. Children were exploited as laborers.
Which has been true since the beginning of time. Children worked hard labor on farms instead of factories, and there was more rural poverty instead of city poverty. On average things were improving.
But that's not even the point. Parent comment is talking about the health of the economy and the federal reserve. You are talking about the distribution of wealth. We could implement something like a basic income to redistribute wealth, without getting rid of free markets and capitalism.
The goal of economic policy should be to generate the most total wealth. Then we can decide what to do with that wealth.
>The latter half of the 19th century up to WW1 was the USA's longest sustained period of high growth and high economic mobility.
That would be the post WW2 years, not the latter half of the 19th century.
As bsder stated, you seem to be painting a rosy picture of a period of American history where exploitation (including child labor) was both rampant and vicious and robber baron power was approaching its peak.
>According to the likes of Paul Krugman Americans should have been eating dirt and living in caves by 1913
According to Ron Paul we have been perpetually just about to experience hyperinflation since circa 1985.
Paul Krugman's record is hardly spotless, but he is at least not making intentionally wrong predictions in order to service the needs of the ultrawealthy.
>Except even then, government intervention in money fixed a certain price ratio of gold and silver. When that ratio no longer reflected the real market prices, chaos predictably appeared in the banking system
This is backwards. The chaos was caused by that gold standard. Financial panics were inordinately common and severe during the latter half of the 19th century. Much more so than they were after 1977.
We've had multiple bouts of mass unemployment with the federal reserve. And they are much more severe and much longer than recessions were before the federal reserve. Or at least that's the argument I hear from people against the federal reserve.
The existence of central planning anywhere in Western financial systems is even more insulting. After watching the examples of our good neighbors to the East you'd think we would have learned our lesson by now.
Actually, central banks in both the US and Europe have very little control over the money supply.
The money created by central banks only accounts for about 3% of the monetary base, the remaining 97% of money that circulates in the economy is created by private banks, lending money out of thin air. Therefore money supply is actually dictated by how confident private banks are to lend to the public. A central bank can try to incentivize lending by lowering interest rates, but in the end it's private banks who choose whether to lend or not (in Europe it didn't work so well..).
It's still a pretty fucked up system either way. I think more people should work on the issue of money supply, it's probably the single most important problem in any economy.
Banks (in the US) can't just lend out however much "fake" money they chose depending on how confident they are.
There is a reserve ratio that must be met. That is the percent of deposits that must be kept on hand and can't be lent out. This rate is dictated by the Federal Reserve (the central bank) in the US. Adjusting this rate allows more or less lending and thus influences inflation. So in short... central banks have a lot more control over the money supply than they themselves simply creating money out thin air.
Do you have a link that explains this lending mechanism? I saw it referred to in a previous HN discussion a while back, and would like to know more about it, since it sounds ludicrous.
There is a group called Positive Money that has a youtube channel with some videos about it. I don't remember which ones are the best, but this is a playlist from them which gave an high level overview in simple terms: https://www.youtube.com/playlist?list=PLyl80QTKi0gPBcb32paMv...
They have more in-depth talks on their channel, if I find some better links I'll give them to you.
I can't say this theory is 100% correct, though it does explain things like the housing bubble, the failure of the ECB policy, and eurozone deflation despite the ultra low interest rates.
So far, out of everything I've read and watched, I think their model is the one that better explains the current system of money creation, but if you have any alternative links with I'm always open to reading different things on this topic.
> "Don’t ever take a fence down until you know the reason why it was put up"
I'm a big believer in Chesterton's Fence too, but what do you do about fences put up by someone who had no right to put it there? If someone erected a wall through the middle of your kitchen, would you have the same reticence to tear it down? The way I see it, the state has no right to enforce a ban like this, and we would be justified in ignoring and circumventing it.
These arguments are rife in US political discourse, but as an outsider with no emotional investment in the idea of guarding against the dreaded tyranny of kings... I note that such arguments always avoid addressing the underlying problem.
In your case, there is a fence in your kitchen, and there you are tearing it down without pausing even for a moment to ask why it is there. Was there a fire while you were out, and the floor on the other side of the fence is no longer sound? Is there some kind of toxic chemical spill going on? Is this a crime scene that must be preserved while evidence is gathered?
The argument of whether the state has a right is certainly interesting, and we ought to have it, but we still ought to understand why they thought the fence should be put there, regardless of our interpretation of whether they had that right or not.
Point taken, and I'm glad you see the merit in the discussion about what things the state has any right to do. After all, sometimes trespassing is the right thing to do. I certainly hope the fire department doesn't wait to be invited if they notice my house is burning down!
I guess I'm just extremely certain that after studying the lineage of a ban like this, one would discover that no, it really isn't necessary. Maybe I'll go test that hypothesis later.
I think you're right that these laws aren't necessary. But I still think it's important to understand them before declaring them to be such. I have a hard time understanding how you can declare yourself to be "extremely certain" of something before you've gone out and obtained the information. It's supposed to be the other way around!
There are some interesting comments in here about how tough the struggle is for car dealerships, but I don't think that necessarily justifies their existence or mitigates the point of this article.
If what the dealerships do is valuable enough to the customer, they would exist even without the ban on direct sales. But I think we can all intuit that if the ban were lifted, buying a car would be a very different (and better) experience.
We often moan about the taxi industry, the hotel industry, or the dealer associations but, in doing so, we miss something very important. The players in that industry often existed for years or decades in a state of government-backed protection without realizing it. Taxi drivers didn't necessarily lobby for market restrictions; they took advantage of the oligopoly, sure, but not necessarily consciously.
If you live in a state of believing that the market is actually fair and others have an equal shot at participating in it, then someone else entering the market in defiance of the existing protections appears to be unfair.
It's hard to believe that you didn't enter into a job market and win a wage fairly. That, instead, you were unfairly advantaged by artificial pressures in that market much bigger and more entrenched than you.
Essentially, the incumbents have been lied to for years and, now that new logistical realities are changing the status quo, it is very hard for them to understand why this is happening. They think someone must be cheating.
---
To expand on joosters' analogy of taking a fence down elsewhere in this thread [1], it's not necessarily bad if we take the fence down, we just need to realize that doing so may have serious consequences in the near-term. Having such a strong, deep-rooted artificial pressure in a market so abruptly removed may result in a painful readjustment of the market that hurts a lot of people.
(My other comments weren't meant as a defense of dealers, only intended to elucidate their operations.)
Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread.
I mention this b/c I don't think it's a gradual accident... The dealers forced Ford to shut down factory stores in Oklahoma not too long ago. This is a turf battle.
Absolutely. Regulatory capture is a real thing and a really bad thing. I'm certainly not defending the franchise protections. I would just like to be clear: people get hurt when we uproot the status quo quickly. That isn't to say we shouldn't do it. There aren't easy answers here, particularly for the legislators who have to make those decisions.
I don't think the circumstances are as grim. Most of the personnel retained at a dealership do useful work. That same work will be required regardless of who runs the show. They may need to apply for a job at the new factory store, but that's really the extent of the displacement. You're not eliminating an entire industry. You're re-organizing it to reduce friction.
> Most of the personnel retained at a dealership do useful work. That same work will be required regardless of who runs the show.
Some people may benefit from this "service", but not me, nor any of the people I know. The only benefit I could see from my previous buying experiences is the act of handing out the key for a test drive. Everything else was simply designed to extract as much money from my pocket without giving me back anything in return. I had all the information I needed to make a purchase decision, the financing doesn't need to be done at the dealership, the car can be bought from a website, and delivered to the curb. A bunch of grown men sitting around all day and swarming people that enter the floor with the goal of "giving them a good deal" is not a value proposition. It's a complete misallocation of resources.
Salesmen aren't a substantial part of the workforce in a dealership. Mechanics, secretaries, service coordinators are. You still need those.
Finally, while you're OK dropping the equivalent of a year's pay on a website, most people are not. They need to talk to someone. So you're still going to need salespeople ... although they'll be far more pleasant to deal with, since there will just be one price that everyone pays and you won't have to be in constant fear of being ripped off.
> Finally, while you're OK dropping the equivalent of a year's pay on a website, most people are not.
It seems to be mostly tech workers who pine for the "buy it now" experience for car shopping. They all seem to know exactly what make, model, and color they want, and they never buy used.
Everyone else has a budget, coupled with a wide range of what they consider an acceptable car - which is why test driving and "show me what else is on the lot" will always be a thing.
> Salesmen aren't a substantial part of the workforce in a dealership. Mechanics, secretaries, service coordinators are
You're describing a regular garage here. We have those on most corners. Some also sell used cars btw. The argument is centered around the sales activities, hence the comment.
I'm describing a dealership. Most dealerships make very little money from car sales. They make their money from servicing vehicles that were purchased there. When you have a brand new car with a warranty, you will take it to the dealer so that you don't have to pay for the repair and they bill it back to the manufacturer. And after the warranty ends, you are now in the habit of going to the same place and continue going there, paying out of pocket.
And most dealerships strive to make the service part of the equation very pleasant to keep you coming back. You will get a work area, internet, coffee, snacks, TV, etc. while you wait. Or if you want a loaner, they'll make it happen too. Some even have shuttles that will drive you to the local mall.
Mind you, all of this would still be in place with a factory store, minus the hellish experience of buying a new vehicle.
Markets tend to be efficient in the long-term and inefficient in the short-term as it is still determining how to place capital and whatnot based on new information. I feel like our industry (software, and technology generally) understands that well, even if implicitly. It's just that those "inefficiencies" are often real people and the "short-term" means being unemployed or unemployable for a while.
It's important to innovate and to do so boldly, but to also not be cavalier with how that innovation affects a world that was spinning long before that innovation was conceived of. Not to say that you or anyone else on this thread is doing so, I just wish to point it out.
"short-term" means being unemployed or unemployable for a while.
If you add the caveat that "for a while" might in practice equal "several generations" for comparable employment, this is true. See for ex. industrial revolution.
The hard truth is that to the degree that these things do work as a simplistic free market model might predict (and that is clearly arguable) they may operate on time scales that will do nothing to alleviate to problems the changes cause.
Very true and very scary. The sad thing is that regulatory protection often makes matters worse by insulating people from changing realities. That causes the inevitable collapse of that protection to create an even greater shock to those who had been protected.
It is one thing to provide short-term support for carriage drivers and ship cargo loaders when mechanization renders their jobs useless. It is a different matter when existing big businesses stand in the way of progress.
Would you support laws that would slow down the growth of digital cameras in the late nineties and early noughties so Kodak could continue to sell celluloid? I bet a lot of people were affected by that change. Where is the smooth transition for them?
The interesting thing about the particular examples in this thread--local taxi companies, hotel franchises, dealer franchises--is that none of them are in fact "big businesses". If Uber and AirBnB and Tesla succeed, they will all be considerably larger than any other player in those spaces. They will be the big businesses.
Personally, I have no interest in protecting businesses. I have an interest in protecting competition. I like the disruption and I like the creating of new value that they bring. I just also feel for the individuals who often are so vigorously disrupted.
I'd argue that dealership model does not necessarily promote competition. If I want a Ford Focus, Ford still dictates what kind of car I get. Sure, the dealership may try to make a few hundred dollars by (unnecessarily) adding "value" to the car with floor mats and halogen lamps but what kind of car I get and at what price is a decision Ford makes.
The problem I have with the dealerships is that they are saying Tesla can't sell cars directly. This is incredibly stupid. Sure, you could say Ford can't set up a store because that'd be like having a Starbucks corporate store right next door to a franchise they authorized. However, if I wanted to create New Jersey's Best Coffee (don't buy my coffee, although there is Best in the name it will be horrible) I should be able to open my own coffee shop with no regard to whatever agreements there have been about coffee shops before. I mean it is one thing to say that my coffee shop should meet health safety requirements (such as not lacing my coffee with poison) and other sensible requirements such as not selling anything with the label "USDA Organic" unless it is USDA Organic.
> I just also feel for the individuals who often are so vigorously disrupted.
Are you talking about the employees? I feel for the Rite Aid and Duane Reade employees more than I feel for the car salespeople. I honestly believe that successful car salespeople have the qualities that will help them land on their feet in any situation. So they will be alright. We will eventually have to seriously discuss the idea of a universal basic income but that is for another conversation.
> I honestly believe that successful car salespeople have the qualities that will help them land on their feet in any situation. So they will be alright.
For one guy I know this isn't true. He was a very good salesman of [a product], but eventually its economics changed, and after that, he couldn't find a job he wouldn't get fired at. Until car sales. I couldn't tell you why -- he's not a jerk or an idiot -- my best guess is that there's some level of generic "being an employee at a company" behaviors we take for granted (meeting long-term commitments, knowing the product) that just don't happen for him.
I'm having trouble coming up with a meaning for "non-artificial market". Do you mean a market free of all forms of non-participant manipulation, coercion, information-assymetries, etc.? I don't think we make those on this planet.
Right, I get it, there's no perfect/elegant/ideal/Platonic market anywhere.
But if you really can't tell the difference between "people use car dealerships because they all find them more convenient" vs "people use car dealerships because of a law that says they have to buy this way", then you're generalizing too far from the above point.
> Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread.
Which makes me wonder how much it would change the US political landscape to eliminate the massive protections granted to car dealerships.
It would certainly change things a lot, but it would have to happen through the same democratic process that put the protections there in the first place.
That never works. You'd need those who benefit from the protectionism to stop lobbying. The issue is that it never was democratic, it was graft that made these regulations and it's graft that keeps them going.
The way to get rid of regulatory capture is to make it impossible to enforce and let the leeches die.
Some fences need to remain. Take barbers/hairdressers, for instance. It turns out that a barbershop can be a great place for spreading head lice. You want your barber/hairdresser to be trained to prevent that. That's part of what their licensing is about.
So, are there any aspects of being a car dealer that are worthwhile fences? Offhand, I can't think of any, but that doesn't mean there are none.
I agree. As an avid "car guy" and a student of regulation, I cannot think of any reason for car dealers, as a whole, to be protected in the long-term. I am, however, perplexed with how we should address the possibility of established manufacturers attempting to cannibalize the sales of their most profitable franchises by building neighboring dealerships with their considerable capital.
I believe the California model actually offers a lot of hope: manufacturers can compete, but they must observe a 10 mile radius from existing franchises.
Pick a model - say, Chevrolet. Is there anywhere within the LA basin that isn't already within 10 miles of a Chevy dealership? Does this rule leave the manufacturer any place to be in a place like LA?
Right, a waiter could do all sorts of things to contaminate food but doesn't require licensing. Regulations and investigation are sufficient. The same could easily been done for barber shops. Enforcement can also be done via torts. Insurance also requires certain base level of employee training. There are many ways to try and prevent and remediate problems other than requiring a license.
Licensing only provides money to a regulatory system. Health inspectors may prevent head lice but word of mouth is still the main way a business gets shut down for shoddy work.
"Health inspectors may prevent head lice but word of mouth is still the main way a business gets shut down for shoddy work."
The difference, at least in theory, is that the health inspector prevents the outbreak. Word of mouth is generally more reactionary and after-the-fact.
>. Taxi drivers didn't necessarily lobby for market restrictions
Drivers are out in the street protesting anything that allows ride sharing and demanding further restrictions. The idea that employees are innocents is riduculous. This ignores 100+ years of unions, associations, legislation, etc. Its the rank and file demanding these laws, not shadowy men cutting backroom deals. If these deals get made its because the rank and file have a enough political capital to make them happen.
>Essentially, the incumbents have been lied to for years
This seems to be politically biased. These people know exactly what they're doing. When the Chicago Teacher's Union marches and claims low pay (instead they are some of the highest paid teachers in the nation), they know exactly what they are doing. When cab drivers block streets to protest Uber, they know exactly what they are doing.
There is a difference between the creation of the status quo and the defense of it.
> ...out in the street protesting...
> ...Chicago Teacher's Union marches...
> ...cab drivers block streets...
Your examples are all of its defense which, while understandable, is largely ignorant of the protections' unintended consequences. My earlier comments addressed the creation of those protections and the effects of their inevitable repeal.
> The idea that employees are innocents is riduculous.
I in no way implied innocence of any party.
> This seems to be politically biased.
Not that it matters, but I am contractually obligated to not display political bias in public. Even without that, as a matter of course and as a non-political resident of Capitol Hill, I avoid politically-biased discussion.
I agree that the ban should be lifted. And I think car dealerships would survive without it.
I recently spent some time on many car companies' websites and navigating the options is extremely difficult. They use all their marketing jargon like sDrive vs. xDrive or 4MATIC or whatever else other nonsense. They don't explain well what any of them mean, and I was left googling the definitions of everything.
Then you get to being actually able to see the car with the various options that you're interested in. The article decries the fact that dealerships have "$100 billion of unsold dealer inventory" but that inventory has a purpose. Some people need a car right away and they aren't picky about it being the exact thing that they want. Some people want to actually see, feel and use the options they are considering.
So I'm against the government-sanctioned ban on direct sales but I think that car dealerships would serve a purpose and survive without it.
To compare and contrast the two methods of research/purchase: both online and in person feature the same marketing jargon.
Online:
You can perform further self-guided research to discern what these terms actually mean and whether you need those features or not. Furthermore, you can see what other people thought about those features.
In Person:
You can have the salesperson explain those terms to you. Except... do you really trust someone with a direct financial interest in your purchasing a new car to help you figure out whether you need features and whether this car is the right car for you?
In person is there for one reason: so the salesperson can direct the dialog, completely control the conversation. They are heavily trained in the dance of sales, and its all in their interest and not yours.
The primary reason to get the dealership out of the picture is, to get the salesperson out of the picture. You don't buy a toaster that way, or even a house. Why a car?
They're honestly not that bad if you keep control of the conversation (to the point of being willing to walk in response to BS) and double-check their claims. You actually have a lot of the power in that relationship, since usually the salesman needs your sale more than you need to buy from him.
I actually like doing a lot of initial research face-to-face with a person. It's higher bandwidth, and the car is there in front of me, so I can get a sense of the intangibles and other facts that are hard to capture online.
>Even though you can buy a Thinkpad directly from Lenovo, Best Buy still exists
For how long? It's a product an older generation that, for some reason or another, appreciates receiving the sales pitch. We're all tech savvy people here; go into Best Buy and start looking at computers. 4 out of 5 times you'll receive a sales pitch with, at least, a few elements of utter bullshit.
Meanwhile, the younger generation are becoming more and more comfortable with buy things online, sight unseen. The GP said it needs to see and feel options on a vehicle. I don't. I need to know what they do, and whether they work (information I can gather from reviews). In my experience, going and playing with something for a brief period of time at a dealership or store doesn't provide enough real world information, and I'm just as likely to make the wrong choice about a feature.
>>The GP said it needs to see and feel options on a vehicle. I don't.
Maybe not, though a lot of people do and you probably should. The ergonomics of a car are more important, and much more complex, than for many other items. Some of this is addressed by adjustable seats, but not all of it. Zappos solved this by doing lots of returns, but that's not a great solution for large items with high shipping costs.
That said, I could easily see the value in having a single specimen at the showroom to check for fit, and then having everybody special order one with their own trim level, colors, etc.
I would certainly not buy a laptop sight unseen -- you can't really evaluate things like how the keyboard/pointer device/etc. feel from a picture, or how the screen looks in sunlight, or if that 0.1" width reduction is worth it, etc.
Much more so with cars -- e.g. how would I tell whether 0.5" less elbow space is still good enough, or how good is road visibility from the driver seat (IMO the single most important characteristic of a vehicle!), or whether the plastic feels cheap, or how clear/useful the HUD is, from looking at pictures?
Thinking about it, I've picked my last car based on rear seat headrests obscuring rear visibility too much for my liking in one of the last two contenders. I wouldn't have been able to notice it without actually driving the vehicle.
Sure, there are reviews & ratings, but those reviewers are not you -- if (for example) you don't care about those headrests quite as much as I do, why should you let my opinion skew yours?
Aren't Apple stores owned by Apple though? If they are, when you go to an Apple store to look at things and then buy online, the store owner (Apple) is still happy because it's getting paid just the same.
If what the dealerships do is valuable enough to the customer, they would exist even without the ban on direct sales.
Can you really make that assumption? Customers act selfishly, and game theory applies here.
For example, you try a shoe on in the store and then buy it online for less. The store provided something valuable to you, but you still bought the shoe online. Eventually the store will go out of business if many people do this, and we lose a valuable service because we each act in our own self interest.
It's not hard for me to imagine that protections could be good in some cases.
Then other companies will realize that this is valuable and will let you try on multiple shoes and mail back the ones you don't like (Zappos/Amazon). This competition ends up being a net positive for the consumer.
To be fair, most Teslas are being bought by enthusiasts. When they start selling the model 3 to people who just want a reliable car, there may in fact be some demand for the services typically offered by a dealership.
That dynamic actually explains why all big-ticket retailers -- not just car dealers -- need to change business models to something like, "You pay for self-service showroom access to a variety of products, then make your actual purchase from [a level near] the OEM with minimal margin."
The only reason I tolerate(d) any interaction with car salesmen at all is the intangibles you get from a test drive. I would much rather just have some kind of option where I can try out car models at some place that doesn't have financial incentive to make me buy one of them.
Indeed, if working for a car dealership is as stressful as described, then that means that the institution of the car dealership deserves to fade into the dustbin of the market.
Oh not this again. First of all, Friedman advocated a negative income tax as a replacement to the ad-hoc mess of redistributive taxes, grants and welfare programs that exist now. Add a UBI to food stamps, unemployment benefits, farm subsidies, Medicare, Medicaid, Social Security, and the problems only get worse.
Second, this doomsday scenario of 50 million people waking up one day to discover there isn't a single thing in the world they can do to feed themselves is such hyperbolic nonsense you might as well be asking how opponents of a UBI plan to deal with a meteor demolishing Texas. Economies change. Sometimes a profession becomes obsolete. The people involved in it go elsewhere and on the whole everyone gets richer. It may sound unpleasant but it's only the same thing mankind has done a thousand times over already with great success. Unless you're mad about the fact that you don't have to milk your own cows anymore. This supposed choice between killing, jailing, or subsidizing millions of people is a false dichotomy that would sound like a joke to me if so many weren't sincerely buying into it. The other and far more reasonable option is to let free human beings navigate a changing world by adapting in the way each of them sees fit. They do it all the time. They don't need some savior swooping in with armloads of other people's money.
Oh not this again. First of all, Friedman advocated a negative income tax as a replacement to the ad-hoc mess of redistributive taxes, grants and welfare programs that exist now.
Yeah, and? He thought it was the best solution to the problem. See above about the difference between political theory and political reality.
Second, this doomsday scenario of 50 million people waking up one day to discover..
Don't give yourself a hernia setting up those straw men. No one said anything about people "waking up one day" to find themselves unemployable. The discussion is quite clearly about a problem that develops in the long term.
Okay, so the 50 million number emerges gradually. What do you suppose the first million are doing while the other 49 gradually emerge? Unless they're complete derelicts, they're going to be looking for ways to make themselves more productive again. How many of them will not succeed?
There does happen to be historical precedent for this in the many other technological revolutions modern industry has seen. Can you find one that resulted in one seventh of the country just sitting on their hands strictly because they had nothing to contribute (and not because government "safety nets" paid them to do so)?
What do you imagine alternative solutions to the problems of economic (im)mobility?
Free money to all citizens seems like a bold economic policy with no attainable goal and presumably would draw backlash from wealthy business owners who would simply raise prices on basic goods.
Instead why not just invest in public infrastructure like transportation and public housing, and education?
The simplest thing I could suggest is to repeal all government-enforced occupational licensing. For heaven's sake you need a state license just to give manicures. In America.
This includes everything from manicurists to medical doctors. Repealing these would do two things. First, it would eliminate an unnecessary barrier of entry into a wide variety of occupations, unleashing a great many new job opportunities. Second, it would give consumers -- particularly the poor -- access to low-cost alternatives that today are illegal. Government approval is no guarantee of quality anyway. We don't need it.
I would also suggest eliminating the Federal Reserve System and its monetary policy of gradual inflation. America's period of greatest economic growth was between the end of the Civil War and the start of World War I. Under a regime of moderate deflation the economy grew 4% year-over-year for a sustained period. Living standards rose across the board. Economic mobility was high. I believe this to be directly attributable to the incentives that exist under a monetary policy of slow deflation: saving is rewarded, prices fall over time, yet innovation and wise investment are greatly rewarded. (Gradual inflation, on the other hand, impels people to borrow and borrow a lot, which just on its own reduces one's economic mobility. Excessive borrowing can also be understood as consuming too much in the present at the cost of the future, which is where the boom-bust cycle comes from. Gradual inflation also makes saving extremely difficult. Anyone who doesn't want their savings to erode over time is forced to become a speculator. It subsidizes Wall Street at the expense of every holder of Dollars.)
What if they already are? I can think of a handful of newsletters that command a three-figure annual subscription price. The people who buy them must regard them as useful and of sufficient quality. It could be that the rabble of news sites drowning in ads are mostly schlock, and that their business model is one of attempting to monetize some of your least-attentive moments.
