Last night at Jimmy’s Charhouse, one of the great restaurants in Libertyville, Illinois near my home, I ended up making two visits: the first was our usual 2 hour dinner (steaks and more steaks) at the bar, which always brings great conversations with one of the regulars. Jimmy’s is an odd restaurant because the regulars aren’t the usual drunk and disorderly types, but very well educated businessmen usually trying to get away from the wife for a few hours. I’ve met my share of conservatives, liberals and even a few libertarians here and there, and the better half and myself love to go and waste a few hours talking about any issue. Last night I sat with Brian, a 50-ish business traveler that finds himself in Illinois a dozen times a year. I see him at Jimmy’s enough to think he actually lives down the street, even though he’s from the DFW area (Grapevine, TX).

Brian is a Green — mostly. He has some free market ideas, but he’s not all there when it comes to thinking them through. He’s anti-Wal*Mart, pro-local business, anti-imports, anti-immigration, and pro-regulation. We discussed the Wal*Mart/small-business issue, and we came to many agreements even though our political views are on opposite sides of the freedom/statism coin. He agrees that government is evil, but his solution is to cut off government’s funding by not shopping from large corporations. I told him that government is evil, and the only way to cut off corporate funding of the political arena is to cut off the power that government receives from the voting class. Brian listened to how I vote for the best candidate to represent my interests — me. He didn’t think it was feasible; even if 80% of voters voted for themselves, some candidate would win (maybe 11% of the vote versus 9%). I told him that the best election is one where the winning candidate can’t even get more than 15% of the vote — the masses will have spoken and the pressure is on.

I explained to Brian the fallacy of not buying from big business — your money is no longer yours to control once it leaves your hand. He might stop buying from Wal*Mart or Kohls, but he’ll keep spending money at Jimmy’s Charhouse. What will the bartender or waitress do with that money? They likely will buy from the cheapest and most efficient store in their area — Wal*Mart. What if he goes to buy organic food from a local farm? Sure, they’re growing crops locally (saving some petrol from not having to drive crops in from another state or country), but they have to buy machinery from an international farm equipment manufacturer. Brian said that he thinks that machinery could be made local — all of a sudden we’d have 500 farm equipment companies? I don’t see the efficiency. I asked him where they’d get steel from. He said at some point you have to go outside the economy to get some supplies — and immediately his system breaks down.

Why should the local (expensive and inefficient) farm equipment manufacturer be allowed to save money by buying from outside the local economy? Why shouldn’t we force him to buy from some outrageously expensive steel mining company in our area? The idea breaks down so easily that it is a senseless debate — one that deals more with emotions than logic. I explained to Brian that every dollar that someone saves at Wal*Mart gives them a dollar to spend locally at Jimmy’s Charhouse or at the organic farm or wherever that individual wants. He didn’t understand what I was talking about, though, and he said that money should just stay locally. I tried to help him understand that there is no such thing as a specific local or regional or national economy — each economy we deal with is just two individuals making a trade for something they both need. The free market at its most basic is no more complicated than the free market at the highest level — either you’re focusing on an individual portion of a trade (say, I trade some dollars for an apple), or you’re focusing on dozens of trades that facilitate that original individual portion (I help a customer find new efficiencies in his business for some dollars that I use to buy an apple from a farmer who uses a portion of my dollars to buy seed and equipment and fertilizer, each trade being used to faciliate that portion of the trade into a larger group of individuals). It isn’t complicated — it just makes sense.

Each time I made a comment about how the free market works, Brian’s main debate point was that government was creating a lack of choice in each part of the market — they are changing the label “organic” for Wal*Mart now, it seems, or they’re creating favoritism for farmers who buy a particular pesticide that is bad for humans, or the government is offering tax breaks for using one type of fuel over another — Briand didn’t like the government pandering to big business. Each time he said these things, I asked him who is at fault: the chicken (big business) or the egg (government)? His answer was always big business.

Which came first, though? In any history I’ve researched, businesses were always competitive and small until one was powerful enough to try to promote the government to change the law in their favor. If the people said “No” to the government’s actions, the business would not have that power. It is always the government’s failure to see long term concerns that is to blame for the big business atmosphere that societies seem to fall victim to. Without government, businesses have no ability to use force against an individual in a decision-making process. Without a certain business, government will always find other businesses to pander to. Business is not the problem — the State is.

We ended the night with Brian and I agreeing to go golfing in August, when he returns. We both agreed to disagree at this point, only because the basic ideas that help form our philosophies can not be discussed in one sitting. I wouldn’t force him to accept my views; I wouldn’t allow him to force me to accept his. Only through coming to understand a viewpoint logically can anyone really expect to make changes in the world, and it is when two people with radical views come together that real conversation and debate moves forward — and to me that is the basis of the free market. Not force, but convicing through logic.

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I posted this to Slashdot this morning in this post:

Here is one area that is very difficult to win the anarcho-capitalist debate on — the cartelization of this particular market in this particular industry sounds very insidious and hard to compete with without the government intervening and bringing the hammer down.

Most people believe that memory manufacturing is a VERY expensive business. This is true in terms of overall numbers (billions), but it is false in terms of actual products required on the market. Memory is used in much more than just computers (cars, microwaves, cell phones, digital cameras, DVD players, etc), and it is a huge market, possibly a trillion dollar one coming soon. When you have a big market, a big demand and a low supply of manufacturers, it doesn’t take much to raise the billions needed to enter a market where there is obvious collusion. 1 million Americans risking US$3000 in a market that you can prove is selling at a overwhelming profit is not a big risk — and many people were aware of the over-priced memory market back in the 90s.

Yet I think the debate is won by the free marketeers when you realize that one of the biggest reasons for the cartelization in this case is patent and copyright law. Memory chips are heavily burdened by patents, and many of those patents are cross licensed by those in the cartel. This smacks of government-paternalism and is one reason why patents generally help the cartels and the State rather than the inventor. The cartel:inventor ratio in terms of who is helped by patents is very very high (more cartels are helped than individual inventors).

I believe the government is wrong for starting class-action lawsuits. We all know that few companies are hurt by class-action lawsuits, and even fewer “victims” are helped. The lawyers (who are the biggest supporters of the expanding State) win the most! Why don’t we roll back before the cartel-State collusion and see what the real cause of this problem is? The biggest barrier to the market is NOT money — stop thinking that! No matter what the financial cost is, if there is a profit to be made, people will invest. I don’t care if it is quadrillions that are needed, as long as it is profitable (and cartels can always be beaten in price), people will risk money. The real barrier is the State — no one can raise enough “force” to overcome the force of government patents and copyrights.

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