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
mickanomics, why are roads any more complex of a utility then any other utilities. Also, as far as transit is concerned:
How is it that the internet has built itself without governmental oversignt?
filc:How is it that the internet has built itself without governmental oversignt?
Very bad example. The internet grew out of a DARPA initiative (U.S.-government-funded).
Life and reality are neither logical nor illogical; they are simply given. But logic is the only tool available to man for the comprehension of both.—Ludwig von Mises
Life and reality are neither logical nor illogical; they are simply given. But logic is the only tool available to man for the comprehension of both.
The internet was created in this manner, yes, but it languished for decades under the government. Only when a private mechanism was added did the network we know today emerge.
The Morning Star:The internet was created in this manner, yes, but it languished for decades under the government. Only when a private mechanism was added did the network we know today emerge.
When the government managed it, it wasn't "The Internet".
Justin Spahr-Summers: filc: How is it that the internet has built itself without governmental oversignt? Very bad example. The internet grew out of a DARPA initiative (U.S.-government-funded).
filc: How is it that the internet has built itself without governmental oversignt?
It's a great example. It shows how the free market lets technology explode when the governmetn lets go. Also you don't know your full history. Darpa was built on earlier models of ethernet. SOmething that was originally created by free-market enterprises but scrapped because the use was not yetrealized. Xerox is one of these firms.
filc: The Morning Star:The internet was created in this manner, yes, but it languished for decades under the government. Only when a private mechanism was added did the network we know today emerge. When the government managed it, it wasn't "The Internet".
That was the essentially thrust of my comment, yes.
We have no way of knowing that the internet would have developed along its current path without the massive government funding that started it.
Sorry if I seem anti-market (I'm most certainly not), but these arguments are very apparent to me from my devil's advocate stance.
filc:It's a great example. It shows how the free market lets technology explode when the governmetn lets go. Also you don't know your full history. Darpa was built on earlier models of ethernet. SOmething that was originally created by free-market enterprises but scrapped because the use was not yetrealized. Xerox is one of these firms.
Similarly to my immediately preceding reply: if it was originally created by the free market and then discarded as not profitable, the government ends up being the critical factor, due to its tax-based (i.e., not profit-centric) budgeting.
Justin Spahr-Summers: We have no way of knowing that the internet would have developed along its current path without the massive government funding that started it. Sorry if I seem anti-market (I'm most certainly not), but these arguments are very apparent to me from my devil's advocate stance.
It doesn't really matter though since the internet as we know it today was built on a collaborative effort of free enterprise. The origins of it only give merit to our argument that the private industry can take a previous governmentally controlled object and create it into something far better.
Further more the capitalism can take all sorts of things regardless of how they are conveived and turn them into profitable endeavors.
So the internet is still a good example as a comparisson when speculating what would happen if Roads were pushed off into the private industry.
By the way, Disneyworld is a private property that has (had) 12,000 room residential capacity.
filc:Further more the capitalism can take all sorts of things regardless of how they are conveived and turn them into profitable endeavors. So the internet is still a good example as a comparisson when speculating what would happen if Roads were pushed off into the private industry
So the internet is still a good example as a comparisson when speculating what would happen if Roads were pushed off into the private industry
I agree, but it's not enough to merely explain that private businesses could take over existing infrastructure of any kind. We have to be able to describe how infrastructure of such complexity could originate on a free market. For roads, I think a lot of pertinent argumentation has already been given—the OP is just selectively ignoring points made.
Justin Spahr-Summers:I agree, but it's not enough to merely explain that private businesses could take over existing infrastructure of any kind. We have to be able to describe how infrastructure of such complexity could originate on a free market. For roads, I think a lot of pertinent argumentation has already been given—the OP is just selectively ignoring points made.
I get your point Justin. I don't see why the origins of a product is important and for that matter it seems like to me 99% or more of the luxuries we take were created on the free market. Practically everything the government takes credit for making technologically was actually created by private firms then handed over to the government via some contract. Arpanet is no exception. For example, the US Government does not build jets and airplanes, it contracts to Boeing. The government paid big bucks for other folk to develop Arpanet.
My response your other point would be:
Site an example of where the free market has ever failed.
I am sorry but there are not enough hours in the day for me to respond to every single point in every post - so forgive me I don't do that now.
But I would like to discuss something that has come up again and again. It seems as though many of the work-arounds of the problems I brought up right from the start are to do with *contracts*. Things along the lines of "well if the market was free right from the beginning then the contracts could be in place in a private road such that it was a condition of moving in that potential residents sign up to the road payment policy". Presumably these policies that people will *voluntarily* sign up to, will include wording like "we agree to abide by the rules, and pay whatever bills arise from, the policy set up by the landlord/committee/mall owner/whatever". Now people here often complain about how terrible it is that the government use threats of physical force against anyone that doesn't abide by the rules. But what about if I moved in to a new house and signed up to the voluntary private road maintenance scheme... but then years later the landlord/committee went sour - perhaps the landlord was going a little senile or the committee was taken over by some new guy who was rather stupid. Say I decided I was unhappy about the quality of maintenance that went on and I decided to protest by not paying my portion of the maintenance bill. What happens then?... it seems to me that we are back to square one. The landlord/private road committee is now acting like a small scale government. They can employ the fact that they have a contract, to (indirectly via the courts) use physical violence to get their bills paid.
Writing this has just reminded me of a situation my mother once found herself in. She purchased a new flat in a block and (voluntarily) signed a maintenance contract for the upkeep of the exterior of the building. It turned out that the freeholders were crooked as hell and would use any tiny excuse to "repair" or repaint the outside while paying overblown fees to their "friends" the builders. The (private) freeholders seemed to be displaying all the characteristics of the governments you all so hate. Sure, she could (and eventually did) move out. But it was a miserable period in her life.
mickanomics: I am sorry but there are not enough hours in the day for me to respond to every single point in every post - so forgive me I don't do that now. But I would like to discuss something that has come up again and again. It seems as though many of the work-arounds of the problems I brought up right from the start are to do with *contracts*. Things along the lines of "well if the market was free right from the beginning then the contracts could be in place in a private road such that it was a condition of moving in that potential residents sign up to the road payment policy". Presumably these policies that people will *voluntarily* sign up to, will include wording like "we agree to abide by the rules, and pay whatever bills arise from, the policy set up by the landlord/committee/mall owner/whatever". Now people here often complain about how terrible it is that the government use threats of physical force against anyone that doesn't abide by the rules. But what about if I moved in to a new house and signed up to the voluntary private road maintenance scheme... but then years later the landlord/committee went sour - perhaps the landlord was going a little senile or the committee was taken over by some new guy who was rather stupid. Say I decided I was unhappy about the quality of maintenance that went on and I decided to protest by not paying my portion of the maintenance bill. What happens then?... it seems to me that we are back to square one. The landlord/private road committee is now acting like a small scale government. They can employ the fact that they have a contract, to (indirectly via the courts) use physical violence to get their bills paid. Writing this has just reminded me of a situation my mother once found herself in. She purchased a new flat in a block and (voluntarily) signed a maintenance contract for the upkeep of the exterior of the building. It turned out that the landlords were crooked as hell and would use any tiny excuse to "repair" or repaint the outside while paying overblown fees to their "friends" the builders. The (private) freeholders seemed to be displaying all the characteristics of the governments you all so hate. Sure, she could (and eventually did) move out. But it was a miserable period in her life.
Writing this has just reminded me of a situation my mother once found herself in. She purchased a new flat in a block and (voluntarily) signed a maintenance contract for the upkeep of the exterior of the building. It turned out that the landlords were crooked as hell and would use any tiny excuse to "repair" or repaint the outside while paying overblown fees to their "friends" the builders. The (private) freeholders seemed to be displaying all the characteristics of the governments you all so hate. Sure, she could (and eventually did) move out. But it was a miserable period in her life.
Are you seriously this incapable of applying a principle to a situation? If the landlord doesn't abide by the contract, you have the right to force him to do so or to seek retribution. And what if the landlord has bigger guns? Well, how hell does it default that we need the state, that, by definition, is a violator of rights?
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."
mickanomics:Writing this has just reminded me of a situation my mother once found herself in. She purchased a new flat in a block and (voluntarily) signed a maintenance contract for the upkeep of the exterior of the building. It turned out that the freeholders were crooked as hell and would use any tiny excuse to "repair" or repaint the outside while paying overblown fees to their "friends" the builders. The (private) freeholders seemed to be displaying all the characteristics of the governments you all so hate. Sure, she could (and eventually did) move out. But it was a miserable period in her life.
A) She can ultimately back out of that contract. It's not lifetime binding. Unlike Government.
B) She had the free option to look over the contract before she commited. Unlike Government
We arn't saying there aren't bad people out there.