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: Jon Irenicus: Austrians do not handle competition that way. For them what is germane is not some fixed or even variable number of suppliers (ultimately each market will have its own structural demands) but the threat of competition, Imagine in an anarchist state, a single water/sewerage company services a large town. The company was very efficient and cheap (compared to other suppliers in other cities) but then the company comes under new evil greedy management. They run everything in the same way but charge 50% extra just because they can. Please describe what happens next and how market forces lead to the townfolk getting cheaper water again.
Jon Irenicus: Austrians do not handle competition that way. For them what is germane is not some fixed or even variable number of suppliers (ultimately each market will have its own structural demands) but the threat of competition,
Austrians do not handle competition that way. For them what is germane is not some fixed or even variable number of suppliers (ultimately each market will have its own structural demands) but the threat of competition,
Imagine in an anarchist state, a single water/sewerage company services a large town. The company was very efficient and cheap (compared to other suppliers in other cities) but then the company comes under new evil greedy management. They run everything in the same way but charge 50% extra just because they can. Please describe what happens next and how market forces lead to the townfolk getting cheaper water again.
Why are you obsessed with wanting to know exactly how the market would provide a good or service in a free market? If we knew that, it would assume that we would have perfect knowledge. Which we don't and neither does the government.
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."
Daniel: Why are you obsessed with wanting to know exactly how the market would provide a good or service in a free market? If we knew that, it would assume that we would have perfect knowledge. Which we don't and neither does the government.
Scenario 3 has a bunch of obvious downsides. So why would anyone risk allowing option 3 unless they has some idea of the upsides?
mickanomics: Daniel: Why are you obsessed with wanting to know exactly how the market would provide a good or service in a free market? If we knew that, it would assume that we would have perfect knowledge. Which we don't and neither does the government. Scenario 3 has a bunch of obvious downsides. So why would anyone risk allowing option 3 unless they had some idea of the upsides?
Scenario 3 has a bunch of obvious downsides. So why would anyone risk allowing option 3 unless they had some idea of the upsides?
I guess you missed the corporate takeover bit in my post? Seems so.
BTW even if one were to grant the above being "difficult" (and I don't) the non-state solution is merely to set up a consumer cooperative with regard to certain utilities, again a market solution involving solely private individuals contracting. Why involve the state at all?
Freedom of markets is positively correlated with the degree of evolution in any society...
mickanomics:But for most people, and especially in cities, this is either not an option at all or would come under the heading of "extremely clumsy and expensive mechanism" as per my earlier post.
Suppose the sewer system itself is a clumsy and expensive mechanism in comparison to something we haven't tried yet. With a government monopoly on sewage it forces people to keep using that. And as for septic systems there are many different types, with some of the newer ones taking up very little space and not needing much maintenance.
You are only looking at the present (and what you can see) when you evaluate the options. What is good today might not be good tomorrow, and governments don't adapt well to new circumstances. The market does this very well and quickly.
mickanomics:Scenario 3 has a bunch of obvious downsides. So why would anyone risk allowing option 3 unless they had some idea of the upsides?
Because option 3 is the only one that doesn't violate a person's rights. Even if it were slightly worse than the other two options (which it isn't) this would still be enough of a reason to do it.
mickanomics: Daniel: Why are you obsessed with wanting to know exactly how the market would provide a good or service in a free market? If we knew that, it would assume that we would have perfect knowledge. Which we don't and neither does the government. Scenario 3 has a bunch of obvious downsides. So why would anyone risk allowing option 3 unless they has some idea of the upsides?
Sure. But your assumption is that the government has perfect knowledge. The government is scientifically capable of providing a wide range goods and services, but how will it know if it should?
Jon Irenicus: I guess you missed the corporate takeover bit in my post? Seems so.
Tell me about how that would work. If the bosses are running an efficient company and making loads of money for their shareholders, tell me how the company would get taken over.
Jon Irenicus: BTW even if one were to grant the above being "difficult" (and I don't) the non-state solution is merely to set up a consumer cooperative with regard to certain utilities, again a market solution involving solely private individuals contracting.
BTW even if one were to grant the above being "difficult" (and I don't) the non-state solution is merely to set up a consumer cooperative with regard to certain utilities, again a market solution involving solely private individuals contracting.
"consumer cooperative" sounds like an area we've already been over and discussed how it has almost the exact same problems as a state run system.
mickanomics you must be carful to comment on things you are ignorant about.
It is true however that in some cases realestate density will not allow those types of units to be installed. This is especially true in cities. Your argument however is flawed because it assumes the following:
So the argument is that the government has no insentive to continously offer better service, where as a private utility company does.
Cooperative's also have many of the same problems as the state as they have no insentive to improve or expand service.
filc: mickanomics you must be carful to comment on things you are ignorant about. Septic Tanks, Leeche Fields, and other small systems of that type (Especially leach field septic systems) are vastly cheaper, less clusmy, and certainly less mechanical than a public sewer system. It is true however that in some cases realestate density will not allow those types of units to be installed. This is especially true in cities. Your argument however is flawed because it assumes the following: You assume the most effecient way to dispose of waste is via the current public sewer system. You assume this because it has only ever been this way. You may argue that the free market has been incapable of providing something supior. We cannot prove you wrong because government has a legal monopoly over the industry barring out competition. Your argument is Argumentum ad ignorantiam(argument to ignorance) It's also Argumentum ad antiquitatem(Arguing to tradition) You assume it's possible for a body of people to detirmin the most effecient way possible to dispose of waste. The market is one of discovery. In government they force extremely large ineffecient investments onto the populous, like a sewer system. Then lock people into that system. Once in place there exists no insentive to improve the effeciency of the existing system. Instead the sytem operates at a loss just trying to maintain it. In the market however a discovery process occurs and the most effecient system ends up being the one most widely used. It's folly to beleive that a board of people could fabricate the most effecient system possible. We cannot see into the future to see what technology will bring us. Things improve every day on the private sector due to that discovery process. Therefore it is futile for us to pretend to assume that we can do no better, when in fact we could as people complain about their public utilties on a daily basis. So the argument is that the government has no insentive to continously offer better service, where as a private utility company does. Cooperative's also have many of the same problems as the state as they have no insentive to improve or expand service.
I already explained this to him regarding roads. But then responds with an argumentum ad retardum. I'll be surprised if even responds to you since he tends to ignore posts that completely destroy his arguments.
Daniel:I already explained this to him regarding roads. But then responds with an argumentum ad retardum. I'll be surprised if even responds to you since he tends to ignore posts that completely destroy his arguments.
I saw your posts. I was kind of hoping it would be harder to dodge many bullets rather then one. :)
Err, perhaps it would be more productive if I just quoted your existing posts in response to his. He couldn't ignore them forever.
In response to several previous posts... I am still waiting to hear about some examples of places in any country on earth at any period in history where people could freely switch between water providers (not including self provision). I do not feel inclined to continue on this thread without an example or two.
what about towns whose water sources are multiple wells? so if you dont like going to one well you go to another.
i dont really see the point of listing towns that during their history had more than a single well....
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
mickanomics: In response to several previous posts... I am still waiting to hear about some examples of places in any country on earth at any period in history where people could freely switch between water providers (not including self provision). I do not feel inclined to continue on this thread without an example or two.
If the government is so great at providing water, why does no one in Los Angeles Country, California, drink the tap water? Why would they rather buy water from a private company?
Daniel: If the government is so great at providing water, why does no one in Los Angeles Country, California, drink the tap water? Why would they rather buy water from a private company?
If there is great demand in LA for better water then presumably some businessmen have been badgering the authorities asking to be allowed to set up a rival water system. In order to help their case and get political pressure I presume they would also be going to the press. So presumably you can give me a link to some articles about these businessmen.