I've long suspected that there is a problem with the evolution of street cleaning in a free market. Imagine a shopping district which tends to become cluttered with rubbish, making the area less attractive to shoppers. Suppose that if all the shop keepers banded together and contributed to hiring street cleaning services for the area then there would be a net benefit in terms of extra visitors that would lead to extra profits that are greater than the cost of the cleaners by some small margin. Now the problem is that if one of the shop-keepers does not want to join the scheme then what can be done? The other shop keepers can not force him to join in. Now the shop keeper that won't pay causes all sorts of problems: 1. it means that the others will have to pay more and the cost benefit equation may no longer work. 2. Other shop keepers may get angry and say "well if he's not paying then why should I". The system may all too easily fail or not get off the ground in the first place.
I've just read "Economics in one lesson" by Henry Haslitt and noted that on page 69, "street cleaners" is included in a list of "public officeholders whose services are really needed", so maybe Mr Hazlitt agrees.
I also remember that there were examples in "The selfish gene" by Richard Dawkins where he shows how certain groups of animals behave sub-optimally (with respect to avoiding predation) because the "optimal" behavior can not evolve due to problems almost identical to the street cleaner problem.
So my question is this: Do Austrians acknowledge that there are a variety of "services" or "institutions" that are of benefit to society that will not evolve naturally from a free market that should rightly be set-up by a government? Is there a list somewhere that most austrians would agree upon? For example police? teachers? street cleaners? "a legal system"? infrastructure builders (road/rail)?
What Went Wrong with Economics
If there is a net benefit from cleaning the area, and all the shop keepers contribute roughly the same amount of trash, then why can't the holdout be coerced into paying?
He's denying everybody gain. Being forced to pay is only worse than being deprived of gain by a small margin.
Using slightly altered terms, what if his shop did not generate more trash than the others, but it stunk badly, and was suspected of decreasing your business?
mickanomics: filc: Also, in this scenario of yours you forget that the road is owned by someone privately. What economic insentive does a private road owner have to let his road become trashy? To save on the cost of cleaning it.
filc: Also, in this scenario of yours you forget that the road is owned by someone privately. What economic insentive does a private road owner have to let his road become trashy?
Also, in this scenario of yours you forget that the road is owned by someone privately. What economic insentive does a private road owner have to let his road become trashy?
To save on the cost of cleaning it.
Costs alone have no meaning in economics. They must be weighed against benefit in order to choose whether or not to bear them.
Let me turn the question back onto you. What reason does the government have to pay the cost of cleaning streets?
The fallacies of intellectual communism, a compilation - On the nature of power
Daniel: The free market wouldn't make a polka-dot-colored expressway to the moon. I guess that means that the free market fails. Lol.
The free market wouldn't make a polka-dot-colored expressway to the moon. I guess that means that the free market fails. Lol.
A) Desirable things that can easily be made by man tend to exist - chocolate cake, umbrellas and shoes for example.
B) Desirable things that can not be easily made by man tend not to exist - everlasting batteries and teleportation machines for example.
C) Undesirable things tend not to exist regardless of whether they are easily made by man or not - One legged stools, potato jewelry and polka-dot-colored expressways to the moon for example.
This thread has been discussing category A and B. Your attempt to ridicule my position by bringing up category C is entirely irrelevant.
mickanomics: Daniel: The free market wouldn't make a polka-dot-colored expressway to the moon. I guess that means that the free market fails. Lol. A) Desirable things that can easily be made by man tend to exist - chocolate cake, umbrellas and shoes for example. B) Desirable things that can not be easily made by man tend not to exist - everlasting batteries and teleportation machines for example. C) Undesirable things tend not to exist regardless of whether they are easily made by man or not - One legged stools, potato jewelry and polka-dot-colored expressways to the moon for example. This thread has been discussing category A and B. Your attempt to ridicule my position by bringing up category C is entirely irrelevant.
I find a polka-dot-colored expressway desirable. Bam! I just proved you wrong again. Lol. How about you reply to my other post where I destory your original question. Lol.
To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process. Rabbi Lapin: "Let's make bricks!" Stephan Kinsella: "Say you and I both want to make a German chocolate cake."
Keith Ackermann: If there is a net benefit from cleaning the area, and all the shop keepers contribute roughly the same amount of trash, then why can't the holdout be coerced into paying?
Human nature. And don't just take my word for it - the guy from "Private Roads Services"(discussed earlier in this thread) confirmed that "dissidents" or non-cooperators do indeed cause the failure of private road schemes.
Keith Ackermann: Using slightly altered terms, what if his shop did not generate more trash than the others, but it stunk badly, and was suspected of decreasing your business?
Maybe I'm being dim, but I'm not quite sure what you're getting at with the smell issue.
Here:
mickanomics: After being accused of not doing my research, I decided to get in contact with "Private Roads Services" (privateroads.co.uk). I had a few emails back and forth and can now tell you some of the things they said. The guy spoke of something he coined a "dissident ratio" which was the fraction of residents who refused to take part in a private road scheme. He said the success or failure of a plan to opt out of government control of a road was very sensitive to this ratio: "up to about 10% seems tolerable; but this is a very sensitive number in the context of private roads and estates, since the majority will be unwilling to devote resources (their own time and money) to managing the road in order to benefit the minority. Result: individuals opt out and join the minority, the number of dissidents quickly rises, and the organisation collapses. " "The private roads which we have in England and Wales are either cul-de-sacs or through-roads which the public don't really need to use, because there is a nearby adopted road which gets them where they want to go. Large numbers of these are not subject to public rights of way (at any rate for motor vehicles - see NERC). I've never heard of residents opening the road to the public but charging a toll, though many take steps to prevent public encroachment (notices, gates and other barriers)." He also said that the largest number of residents he knew of in a private road in the UK was 420. I had not been considering cul-de-sac's and roads with very limited through-traffic before before in my discussions. So I'm going to slightly modify my challenge to this as follows: I challenge anyone here to find a single private road on planet earth which meets the following criteria: 500 or more residents - A significant amount of traffic which is not simply the residents/friends driving to their homes - the residents must not all share a common landlord.
After being accused of not doing my research, I decided to get in contact with "Private Roads Services" (privateroads.co.uk). I had a few emails back and forth and can now tell you some of the things they said.
The guy spoke of something he coined a "dissident ratio" which was the fraction of residents who refused to take part in a private road scheme. He said the success or failure of a plan to opt out of government control of a road was very sensitive to this ratio:
"up to about 10% seems tolerable; but this is a very sensitive number in the context of private roads and estates, since the majority will be unwilling to devote resources (their own time and money) to managing the road in order to benefit the minority. Result: individuals opt out and join the minority, the number of dissidents quickly rises, and the organisation collapses. "
"The private roads which we have in England and Wales are either cul-de-sacs or through-roads which the public don't really need to use, because there is a nearby adopted road which gets them where they want to go. Large numbers of these are not subject to public rights of way (at any rate for motor vehicles - see NERC). I've never heard of residents opening the road to the public but charging a toll, though many take steps to prevent public encroachment (notices, gates and other barriers)."
He also said that the largest number of residents he knew of in a private road in the UK was 420.
I had not been considering cul-de-sac's and roads with very limited through-traffic before before in my discussions. So I'm going to slightly modify my challenge to this as follows:
I challenge anyone here to find a single private road on planet earth which meets the following criteria: 500 or more residents - A significant amount of traffic which is not simply the residents/friends driving to their homes - the residents must not all share a common landlord.
What this tells us is that people would rather use the "free" roads -- that its, roads paid for by other people -- than pay for their own seperate roads. Who the hell wouldn't? If you could either live in a home that you had to pay for, or a home that was free to you and that other people paid for, which would you chose? The reason why your challange is idiotic is because your asking why the free market doesn't work in a non-free market. You might as well ask why we can't make apple juice with oranges.
Daniel: I find a polka-dot-colored expressway desirable. Bam! I just proved you wrong again. Lol.
I find a polka-dot-colored expressway desirable. Bam! I just proved you wrong again. Lol.
A small adjustment...
A) Desirable* things that can easily be made by man tend to exist - chocolate cake, umbrellas and shoes for example.
B) Desirable* things that can not be easily made by man tend not to exist - everlasting batteries and teleportation machines for example.
C) Undesirable* things tend not to exist regardless of whether they are easily made by man or not - One legged stools, potato jewelry and polka-dot-colored expressways to the moon for example.
* for most normal people.
=====
I will answer your other request shortly.
Daniel: Malls are owned by corporations which are own by dozens and sometimes thousands of people. How could it be possible for people to come together in a corporation to build a mall, if they can't come together to sweep a dusty road? Lol.
Malls are owned by corporations which are own by dozens and sometimes thousands of people. How could it be possible for people to come together in a corporation to build a mall, if they can't come together to sweep a dusty road? Lol.
Corporations are run by small groups of people or even a single person. If a car making company decides to make more red cars than blue ones, the bosses do not have to seek agreement amongst the workers for that to go ahead.
My problem with private roads is all about the *necessity* of getting so much cooperation from so many *independent* parties.
Please stop putting "lol" at the end of all your arguments. Its damn rude and makes you seem about 12 years old.
mickanomics: Daniel: I find a polka-dot-colored expressway desirable. Bam! I just proved you wrong again. Lol. A small adjustment... A) Desirable* things that can easily be made by man tend to exist - chocolate cake, umbrellas and shoes for example. B) Desirable* things that can not be easily made by man tend not to exist - everlasting batteries and teleportation machines for example. C) Undesirable* things tend not to exist regardless of whether they are easily made by man or not - One legged stools, potato jewelry and polka-dot-colored expressways to the moon for example. * for most normal people. ===== I will answer your other request shortly.
I think what your missing here about desireability is how that desireability changes when government moves their hand out of an industry. Some services are barred from existence as the government monopolizes itself into an industry. Services that, otherwise WOULD BE desireable, are not found in quantity due to that government monopoly. As long as government holds a monopoly and people are forced to subsidize that monopoly, roads, for everyone, people are going to naturally choose the most economic route, public roads.
On the other side, had government not existed in roads people would choose a different economic route. Going along with an above posters analogy with homes. If we had socialized housing, very few people would front the expense for their own private home. They could not justify paying taxes for everyone's home including their own, and then purchase another house on top of that. This is why private education is so expensive for people.
The story changes though when consumers are not forced to purchase the government good but are allowed to purchase their own. There is a reason why the government DOES NOT offer tax incitives for going private on many commodities. This is because it would destroy the government market, as government is incapable of keeping up with the free market competitors. Point in case, why can't people who home school or private school their kids get tax credits? Perhaps it's because people would abandond the shitty public school....
Government cannot handle competition, hence the forced monopolization. FYI, every city or state I lived in had a DOT which operated in an economic loss. Do you think a private industry would do that?
mickanomics: Daniel: Malls are owned by corporations which are own by dozens and sometimes thousands of people. How could it be possible for people to come together in a corporation to build a mall, if they can't come together to sweep a dusty road? Lol. Corporations are run by small groups of people or even a single person. If a car making company decides to make more red cars than blue ones, the bosses do not have to seek agreement amongst the workers for that to go ahead. My problem with private roads is all about the *necessity* of getting so much cooperation from so many *independent* parties. Please stop putting "lol" at the end of all your arguments. Its damn rude and makes you seem about 12 years old.
It is simple enough to exclude non-payers from the road. All it takes is an object that blocks their access.
mickanomics:My problem with private roads is all about the *necessity* of getting so much cooperation from so many *independent* parties.
I get your point, but check what your defending. Your basically arguign that without governmental oversight business would stop tomorrow as no one would build new roads, or that the contracts to build them would be too entangling. I have a hard time beleiving with as innovative as the market is roads would stop being maintained, improved apon, or expanded should government stopped participating in their creation.
In short, you state that free-enterprise is ill-equiped to handle such problems but that government is equiped and can handle them with effeciency. It's odd because all innovation that we enjoy came from the free-market originally, and almost every governmental program I know of operates in failure. So it seems backwards to me to defend a broken system against a succesfull system in regarding complex objects.
Stranger:It is simple enough to exclude non-payers from the road. All it takes is an object that blocks their access.
This is a good point. To add to it, what happens when you stop paying your water bill, electric bill, internet bill, phone bill? Like any other utilty you get cut off. If you think thats unfair then you beleive in socialism. Thats really all there is to it.
mickanomics: Daniel:Malls are owned by corporations which are own by dozens and sometimes thousands of people. How could it be possible for people to come together in a corporation to build a mall, if they can't come together to sweep a dusty road? Lol. ... My problem with private roads is all about the *necessity* of getting so much cooperation from so many *independent* parties.
Daniel:Malls are owned by corporations which are own by dozens and sometimes thousands of people. How could it be possible for people to come together in a corporation to build a mall, if they can't come together to sweep a dusty road? Lol.
... My problem with private roads is all about the *necessity* of getting so much cooperation from so many *independent* parties.
Why would there be so many "independent parties"?
Daniel: What this tells us is that people would rather use the "free" roads -- that its, roads paid for by other people -- than pay for their own seperate roads. Who the hell wouldn't? If you could either live in a home that you had to pay for, or a home that was free to you and that other people paid for, which would you chose?
What this tells us is that people would rather use the "free" roads -- that its, roads paid for by other people -- than pay for their own seperate roads. Who the hell wouldn't? If you could either live in a home that you had to pay for, or a home that was free to you and that other people paid for, which would you chose?
I disagree - what I wrote tells us more information than your synopsis.
Daniel: The reason why your challange is idiotic is because your asking why the free market doesn't work in a non-free market.
The reason why your challange is idiotic is because your asking why the free market doesn't work in a non-free market.
free/non-free is a matter of degree. It seems to be free enough so that tens of thousands of private roads (of certain restricted types) have sprung up around the world.
mickanomics: Daniel: What this tells us is that people would rather use the "free" roads -- that its, roads paid for by other people -- than pay for their own seperate roads. Who the hell wouldn't? If you could either live in a home that you had to pay for, or a home that was free to you and that other people paid for, which would you chose? I disagree - what I wrote tells us more information than your synopsis. Daniel: The reason why your challange is idiotic is because your asking why the free market doesn't work in a non-free market. free/non-free is a matter of degree. It seems to be free enough so that tens of thousands of private roads (of certain restricted types) have sprung up around the world.
Well, then I suppose that the difference between rape and non-rape is a matter of degree.