I've heard it argued, especially in the last couple weeks where there have been several celestial near misses (i.e., meteors, solar flares, etc.), that we need to increase funding to NASA to protect us from these things that would, on their face, have a difficult time being privately dealt with.
How would NGOs deal with potentially apocalyptic 'cosmic complications'?
Market failure questions are silly as there is no such thing as a market failure. If someone feels the need to have asteroid insurance or protection then they are perfectly welcome to purchase it. It is the stupidity of the collective that would actually spend hundreds of millions to STUDY, not build, a system to protect us from something that has not killed an American in dozens of years. Building such a system would cost tens to hundreds of billions.
Besides, if people in Washington were really interested in protecting the public then there is an easy way and cheap way to save thousands: Shut down the TSA, then hundreds of thousands of people will choose to fly versus drive on trips between 300 and 500 miles.
Person starts asteroid defense company / organization, solicits funds for said purpose.
Assuming people feel a need and the cost seems worth the expense, and the organization is credible, people then begin donating either one time or monthly, to the org.
I dunno if such a company could be made profitable, so it might have to be on donation basis. "What if some don't donate." Not really a big deal, those with the most to lose will be the ones donating to this purpose, people with satellites in orbit mainly.
If free rider elimination is a primary concern you'd use geographic-lock-in contracts, where the insurance fee only triggers if some critical value of the population signs on, say 99% (allowing room for hardship or w/e). All or nothing proposition.
They wouldn't. A free market solution to the overpopulation problem. =)
Buzz Killington: They wouldn't. A free market solution to the overpopulation problem. =)
Sometimes I can't tell whether you're joking or just being stupid.
In the same note as there is no such thing as a "Market Failure", there is no such thing as a "Free Rider Problem". Just about the entire of humanity "Free Rides" on people who have gone before them. I free ride on the work of Newton who free rode on Kepler, etc. The "Free Rider Problem" is just a condition. The propagandists turn this condition into a problem by stirring up envy and then suggest the use of force to resolve it.
If a person wants something bad enough then that person will spend real resources to get it. Others who take a "Free Ride" on the purchase or work of this person do not aggress against the person in any way.
The free rider problem doesn't create aggressions, this is true, what it does is discourage anyone from taking part, because if they don't they may be able to freeride. It's a negative incentive. It's in the interest of anyone who can freeride to do so.
So, I don't think it's an unreal problem. Friedman's treatment of it and its cures in "Machinery of Freedom" seem perfectly reasonable.
If you want to talk about fake problems, it's the tragedy of the commons that is a fake problem, since it can be cured by simply having no commons, by allowing everything to be owned privately. But the free rider problem certainly is a problem for the negative incentives it creates. But there are countermeasures.
Friedman uses the example of farmers facing flooding. They want to build a dam. A businessman approaches them and seeks to solicit funds to buy a dam. But the others won't sign in unless all of them do, essentially. Each is trying to claim hardship and get all the others to sign on instead. Cured with a trigger clause that kicks in when a certain percentage of the populace agrees to kick in. It's has the effect of taxation: everyone pays, but it preserves voluntary action!!!
The solution you propose still has people "Free Riding" although not as many as before. The fact is that if a person wants something bad enough then that person will exchange value to get that something regardless of the number of "Free Riders" be they 30% of the possible buyers or 99.9999999%. So there really is no such thing as a "Free Rider" problem as it is simply the law of demand in action. Simply stated, the buyers prefer the feeling of having others around them participate in the purchase over the purchase itself at the price it is offered. Similarly the "Free Riders" do not value the product or service enough to use their own resources but would accept the product or service at the greatly reduced price of nothing or some user fee.
I will accept the "solution" as being just a good idea in that using the contract the folks who want the product or service the most will not have to commit resources only to have ALL of the others who could pay not pay.
Bogart: The solution you propose still has people "Free Riding" although not as many as before.
The solution you propose still has people "Free Riding" although not as many as before.
Not necessarily, I only used the 99% figure because most people would consider that negligible free-riding and not object to it. Most wouldn't want a single holdout farmer to stop the project or w/e. You can just as easily use a 100% figure and go from there.
Bogart: The fact is that if a person wants something bad enough then that person will exchange value to get that something regardless of the number of "Free Riders" be they 30% of the possible buyers or 99.9999999%. So there really is no such thing as a "Free Rider" problem as it is simply the law of demand in action.
The fact is that if a person wants something bad enough then that person will exchange value to get that something regardless of the number of "Free Riders" be they 30% of the possible buyers or 99.9999999%. So there really is no such thing as a "Free Rider" problem as it is simply the law of demand in action.
The problem is the negative effect it has on those who might put money forth if not for the thought that they could get the same effect by not putting money forth. In a sense, democracy creates a gigantic free-rider incentive, where voters vote to fleece the rich to pay for the things the masses want. Contractual solutions would replace democracy-based aggression for activities requiring mass buy-in.
A better example is perhaps a bridge. A community wants a bridge. Not everyone has to buy in at all, because the bridge will not be free. Those who put money in get shares of the corporation and later a share of the profit for bridge operation. There's no free rider problem here at all, obviously, since the plan is profitable and not a net drain, thus people aren't trying to escape it.
The free rider problem only exists where there's a net drain. As for asteroids, it's likely that the solution to asteroids would also give opportunity to mine those same asteroids, so it very well could indeed be profitable, so no free riders.
Similarly, the farmer-dam example: make it a power generating dam and no free-rider problem. Can every project be turned into a profitable one? In the free market, maybe, maybe not. Certainly not when war is the problem and the net drain is to pay for regional protection. That would have to be handled by voluntary mass-contractual systems such as I propose or else via taxation. I prefer the voluntary approach. And in a seastead it would be just as easy, I think, to move away from those who won't help pay for the city's defense and thus leave free riders behind entirely :P
Bogart:Simply stated, the buyers prefer the feeling of having others around them participate in the purchase over the purchase itself at the price it is offered.
But often no one person can pay for it. You want asteroid defense it's going to be in the billions. The masses have far more money in aggregate than the wealthy.
Bogart: Similarly the "Free Riders" do not value the product or service enough to use their own resources but would accept the product or service at the greatly reduced price of nothing or some user fee. I will accept the "solution" as being just a good idea in that using the contract the folks who want the product or service the most will not have to commit resources only to have ALL of the others who could pay not pay.
Isn't that what I said? If not that's what I intended to convey. The all-or-nothing contract triggers payment obligation only when some significant fraction of all possible participants agree, reducing or eliminating the free-rider tendency.
Private charity and commercial endorsements generate funds for anything. If the problem is serious enough, such as in the case of extinction, then generating funding would be extremely easy. There is no impending meteor about to cave into us, and I still think a company could procure some funding from paranoid individuals.