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
B-man: I believe an example (hardly perfect but still..) you are looking for can be found here: http://www.waterforlife.nsw.gov.au/about/plan/competition
I believe an example (hardly perfect but still..) you are looking for can be found here: http://www.waterforlife.nsw.gov.au/about/plan/competition
I couldn't help noticing the sentence "the establishment of a third-party access regime for water and sewerage infrastructure." now forgive me if I haven't read everything in detail but this sounds like *government enforcement* of rules allowing one company to use the pipes of another company. Is that right? If so then its not a good example. In a free market one water company is not going to allow another water company to use its pipes. And even then, individuals are still not going to be able to have a different water supplier to his neighbor.
Or, the shopkeepers that banded together could simply sweep all the rubbish in front of the hold-out's store, at which point he'd likely reconsider his a**hole decision not to pitch in.
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David Z
"The issue is always the same, the government or the market. There is no third solution."
mickanomics:Thank you, but that book is quite expensive... and I'm a slow reader!
Not good comments from a self proclaimed phd. :)
Thanks for completly evading my comments.
We have no need to prove ourselves. Water will show up at people's homes for the same reason milk shows up at the store everymorning. I am going to start quoting myself untill you get off this fixation to find 100 private water companies. It's a waste of time and doesn't prove anything. Saying the free market cannot handle the delivery of water is adolescent and naive.
filc: You are exploiting the fact that the government has eliminated several private firms simply by being the monopoly in the industry. Then asked us to provide examples in a market controlled by the government. Despite the advantage you've given yourself we have still sited several cases for you. You have conveniently shrugged them off.
FIlc:We have no need to site real-world examples that such business's could exist
Filc:Our argument however holds far more merit than yours as more goods and services are delivered via the free market than by government.
Tell me Mickanomics, in all your wisdom and intelligence. If it's true that government is the only one competent enough to provide these services(Water, Roads), how come they don't run them on the free market and fairly eliminate their competition due to higher quality and cheaper prices? Because the free market would steam roll them, thats why.
David Z: Or, the shopkeepers that banded together could simply sweep all the rubbish in front of the hold-out's store, at which point he'd likely reconsider his a**hole decision not to pitch in.
VANDARCHIST!
filc: We have no need to prove ourselves. Water will show up at people's homes for the same reason milk shows up at the store everymorning. I am going to start quoting myself untill you get off this fixation to find 100 private water companies. It's a waste of time and doesn't prove anything. Saying the free market cannot handle the delivery of water is adolescent and naive.
I never said 100, just a few.
Did you read my earlier posts about how contracts led to outcomes with almost identical characteristics (including violence against non-cooporators) to government run systems?
I didn't "shrug them off", that implies that I ignored them, or didn't provide reasons they were bad. In every case I explicitly explained how and why they were poor examples of true free market multi-supplier water provision.
I beg to differ. I explained why you should in a recent post.
My argument is not based on the *quantity* of goods. Its all about the *delivery method*. If pipes had never been invented and bottles were the only way that anyone knew of to deliver water then I would never have classed water as a utility and we wouldn't be having this conversation.
Filc:Tell me Mickanomics, in all your wisdom and intelligence. If it's true that government is the only one competent enough to provide these services(Water, Roads), how come they don't run them on the free market and fairly eliminate their competition due to higher quality and cheaper prices? Because the free market would steam roll them, thats why.
1. governments around the world regularly do tender out road maintenance and water provision to private companies. So there is at least some element of competition within state controlled systems.
2. If rival water suppliers can see profit in providing a secondary water supply system then I think that you are wrong to assume that **100%** of governments everywhere around the world would be so quick to refuse them. Why would that happen? After all, they had allowed hundreds of thousands of private roads.
mickanomics: B-man: I believe an example (hardly perfect but still..) you are looking for can be found here: http://www.waterforlife.nsw.gov.au/about/plan/competition I couldn't help noticing the sentence "the establishment of a third-party access regime for water and sewerage infrastructure." now forgive me if I haven't read everything in detail but this sounds like *government enforcement* of rules allowing one company to use the pipes of another company. Is that right?
I couldn't help noticing the sentence "the establishment of a third-party access regime for water and sewerage infrastructure." now forgive me if I haven't read everything in detail but this sounds like *government enforcement* of rules allowing one company to use the pipes of another company. Is that right?
Aye, as I mentioned it is hardly perfect. Yet it still fullfils your initial requirement of "where people could freely switch between water providers" Read this for discussion of individuals switching between water providers: http://www.piac.asn.au/publications/pubs/sub2007080_20070809.html
In a free market one water company is not going to allow another water company to use its pipes.
They are in fact allowing competitors to use its pipes. Additionally newly constructed infrastructure, particularly on the water recycling side will be privately owned as will the water the private companies recycle.
mickanomics: Daniel: http://www.alhambrawater.com/ Is there anything you're not inept at? Presumably you've canceled your supply of mains water and are now flushing your toilets with bottled water. And obviously your private water is cheaper than the evil socialist, uncompetitive water supply so you're saving money too!
Daniel: http://www.alhambrawater.com/ Is there anything you're not inept at?
http://www.alhambrawater.com/ Is there anything you're not inept at?
Presumably you've canceled your supply of mains water and are now flushing your toilets with bottled water. And obviously your private water is cheaper than the evil socialist, uncompetitive water supply so you're saving money too!
It is illegal to flush a toilet with bottled water. Helloooo!!! Lol. But yeah, I drink private-company-provided water. Btw, it is more expensive to do so, but the waters are not homogeneous. That is to say, the private-company-provided water is of better quality than the government-provided sewage, I mean, tap water, so I am willing to pay a higher price.
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."
B-man: Read this for discussion of individuals switching between water providers: http://www.piac.asn.au/publications/pubs/sub2007080_20070809.html
Read this for discussion of individuals switching between water providers: http://www.piac.asn.au/publications/pubs/sub2007080_20070809.html
Forgive me if I didn't read every line, but at a glance It looks to me to be a choice between "wrapper" companies. (see my earlier post on "wrapper" companies). If I'm wrong on this point please tell me what section to read more carefully.
Daniel: It is illegal to flush a toilet with bottled water. Helloooo!!!
It is illegal to flush a toilet with bottled water. Helloooo!!!
Really? I had no idea. How did you know this nugget of information? What is the governments stated justification for this? I'm curious.
mickanomics:Did you read my earlier posts about how contracts led to outcomes with almost identical characteristics (including violence against non-cooporators) to government run systems?
I read this. It's a logical fallacy. The person stealign from the provider is the one initiating force, not the provider trhying to get his stolen goods or payment back. You will have to explain yourself on this one as it seems your argument is fundamentally broken. Explain how violence would occur in such a situation?
mickanomics:In every case I explicitly explained how and why they were poor examples of true free market multi-supplier water provision.
The only thing you explained was how you and your mother are irresponsible consumers. This isn't the fault of the market. You cannot place blame of your shortcomigns into others. You have yet to point out any real flaw of the free market. If government could provider water better then the free market then it's logical to assume they could also provide ipods better then the free market. If you think that statement is false your being hipocritical and have no integrity.
mickanomics:I beg to differ. I explained why you should in a recent post.
I have posted this link for you 3 times. It irradicates any argument you made. On that note though I scrolled up and didn't see any valid comment defending the reason why we need to come up with examples.
mickanomics:My argument is not based on the *quantity* of goods. Its all about the *delivery method*. If pipes had never been invented and bottles were the only way that anyone knew of to deliver water then I would never have classed water as a utility and we wouldn't be having this conversation.
This is an extremely silly argument and reveals your short sitedness. How are cable lines any different the pipes? Internet somehow manages to get deliverd without government intervention but pipes can not? You could never explain to us why or how pipes would be incapable of being delivered on the free market. Furthermore you just admited to us that pipes don't necessarily NEED to be used to deliver water. In fact it may be the case that this is not the most effecient way at providing water. So think about what you just said. Your argument basically states that "I arbitrarily beleive government should deliver water simply because we use pipes". It's a brutilly non thought out argument.
mickanomics: governments around the world regularly do tender out road maintenance and water provision to private companies. So there is at least some element of competition within state controlled systems.
What? Is Canada allowed to come here and compete for govermental installed roads. There is no competition. YOu could never make such a silly argument.
mickanomics:2. If rival water suppliers can see profit in providing a secondary water supply system then I think that you are wrong to assume that **100%** of governments everywhere around the world would be so quick to refuse them. Why would that happen? After all, they had allowed hundreds of thousands of private roads.
This is a good question you need to ask yourself. Why is government interested in regulating every industry and being involved in the every aspect of the free market? Why is government interested in being involved in healthcare? Roads? water? Electricity? Internet? Why does government want to take control of anything of these things? When you understand the roll of government and it's desires then the answer becoems obvious. Do you think the government is one large altruistic entity? If they are so noble why is it they must steal resources first before they can generously give them back out again?
MICK:
THIS IS GOD AGAIN. YOU MAY REMEMBER ME FROM A FEW WEEKS BACK. THE FREE MARKET CAN PROVIDE HIGH QUALITY WATER SERVICE AT AN AFFORDABLE RATE. I PROMISE. I WOULDN'T LIE TO YOU BUDDY.
filc: mickanomics:Did you read my earlier posts about how contracts led to outcomes with almost identical characteristics (including violence against non-cooporators) to government run systems? I read this. It's a logical fallacy. The person stealign from the provider is the one initiating force, not the provider trhying to get his stolen goods or payment back. You will have to explain yourself on this one as it seems your argument is fundamentally broken. Explain how violence would occur in such a situation?
Consider this scenario. You've been living in your lovely home since childhood. All your friends live close by. You love your neighborhood and have no intention of moving. Then the management of your utility companies/roads get bought out. The new guys are not nearly so good, the prices begin to rise, the service begins to fall. You say to yourself "enough is enough, I'm not standing for this any more!", say your write to your providers saying "the service had declined markedly and your prices have risen unreasonably, I am only willing to pay the old rate of £X per year for your crappy service". Now see what happens.
filc: mickanomics:In every case I explicitly explained how and why they were poor examples of true free market multi-supplier water provision. The only thing you explained was how you and your mother are irresponsible consumers. This isn't the fault of the market. You cannot place blame of your shortcomigns into others.
The only thing you explained was how you and your mother are irresponsible consumers. This isn't the fault of the market. You cannot place blame of your shortcomigns into others.
Contracts in perpetuity *can not* precisely specify prices and service levels way in to the future. How could a water company know about long term rainfall patterns? How could a road maintenance company know about long term traffic levels. How do you define exactly when a worn out system needs repairing? How can a service provider know the long term costs of his raw materials. What if the amount of the utility that people desire dramatically changes due to some new technology - for example if someone invented "hover cars" and roads were no longer needed. Can the contract signer really know what is going to happen in 20, 30, 40 years? The cost/quality of a utility provision is *always* going to be liable to change, perhaps radically so, in the long term regardless of what any contract says.
filc: mickanomics:I beg to differ. I explained why you should in a recent post. I have posted this link for you 3 times. It irradicates any argument you made. On that note though I scrolled up and didn't see any valid comment defending the reason why we need to come up with examples.
I can't remember which page it was on, but the gist was that finding examples seemed a very useful exercise in the case of private roads. So why not do it again for water.
filc: mickanomics:My argument is not based on the *quantity* of goods. Its all about the *delivery method*. If pipes had never been invented and bottles were the only way that anyone knew of to deliver water then I would never have classed water as a utility and we wouldn't be having this conversation. This is an extremely silly argument and reveals your short sitedness. How are cable lines any different the pipes? Internet somehow manages to get deliverd without government intervention but pipes can not? You could never explain to us why or how pipes would be incapable of being delivered on the free market. Furthermore you just admited to us that pipes don't necessarily NEED to be used to deliver water. In fact it may be the case that this is not the most effecient way at providing water. So think about what you just said. Your argument basically states that "I arbitrarily beleive government should deliver water simply because we use pipes". It's a brutilly non thought out argument.
I think that its you that has not thought it through. Pipes are way bigger than low voltage wires and harder to work with. Just go out and find some workers digging up a road to lay/maintain/replace water/sewage pipes - then go and find some workers laying/maintaining/replacing some low voltage wires. You'll see an *enormous* difference in the amount of general disruption.
filc: mickanomics: governments around the world regularly do tender out road maintenance and water provision to private companies. So there is at least some element of competition within state controlled systems. What? Is Canada allowed to come here and compete for govermental installed roads. There is no competition. YOu could never make such a silly argument.
I never said the competition had to be international. You can (and usually do) have more than one utility company per country.
filc: mickanomics:2. If rival water suppliers can see profit in providing a secondary water supply system then I think that you are wrong to assume that **100%** of governments everywhere around the world would be so quick to refuse them. Why would that happen? After all, they had allowed hundreds of thousands of private roads. This is a good question you need to ask yourself.
This is a good question you need to ask yourself.
I think your position that 100% of all governments everywhere on earth refuse to allow multi-provider water provision in every single town is untenable.
I forgot to mention one more thing... people in London (where I live) are forever complaining that the roads are being dug up for utility maintenance too often, causing traffic jams.
If a London politician stood up and said lets have a doubled-up water/sewage system, he be lynched!
You are joking. Put an unruly blonde mop on that politician's head and he could say practically anything he wanted, whilst being elected!
mickanomics:Consider this scenario. You've been living in your lovely home since childhood. All your friends live close by. You love your neighborhood and have no intention of moving. Then the management of your utility companies/roads get bought out. The new guys are not nearly so good, the prices begin to rise, the service begins to fall. You say to yourself "enough is enough, I'm not standing for this any more!", say your write to your providers saying "the service had declined markedly and your prices have risen unreasonably, I am only willing to pay the old rate of £X per year for your crappy service". Now see what happens.
I tend to dislike fairy tails as they are typically as likely to happen as pigs flying. You can't just make up random scenario's to best suit your argument, you just sound desperate. Here let me give you a more realistic scenario of something that people actually have to deal with.
What happens when your electricity bill goes up by a huge percentage but service drops and you start to experience brownouts or long periods of no power. The electricity utility is provided by the city, you have no negotiation power what so ever. What happens then?
Also, no where in your case is FORCE initiated on by any one. In the case I just argued, the city could use force to get your payment. Not simply turn off your power, but jail you untill you pay your dues to society. That is force. I specifically asked you to show me where force and violence would be used in a private contract? You have failed to do so.
Now let me site you a more likely case of force being used to kick people off their land. Eminent domain is a real factor thats happens all over the country. The state can come along and arbitrarily decide it wants to seize your property. You have no alternative coarse of action. At least in a private world you could sell your home and move on. Eminent Domain.
Unlike your fake fairy tail of a story, I can actually site cases of where this is occuring.
Case 1
Case 2
Shoot, here is a whole blog full of them
Case 3
All I had to do was google and get cases. You actually had to make a fake and highly unlikely story up.
mickanomics:Contracts in perpetuity *can not* precisely specify prices and service levels way in to the future. How could a water company know about long term rainfall patterns? How could a road maintenance company know about long term traffic levels. How do you define exactly when a worn out system needs repairing? How can a service provider know the long term costs of his raw materials. What if the amount of the utility that people desire dramatically changes due to some new technology - for example if someone invented "hover cars" and roads were no longer needed.
The first statement in this paragraph is irrelevent and wrong. Contracts in perpetuity don't need to predict future prices. As the future isn't whats at issue right now. Only right now is important as far as payment goes. The cost of services will fluctuate just as any other good/service does on the face of the planet. This apply's to your government option as well as the private one.
All the following questions can be and have already been answered on the free market. But since you are extremely stubborn I will answer each one and give a real life case. Something you should be able to do on your own but apparently your PHD is barring your ability to think critically or out of the box.
mickanomics:How could a water company know about long term rainfall patterns?
Not sure why it's important but I imagine the same way farmers do. Watch the weather channel. I kind of feel like I should laugh on this question.
Example
mickanomics:How do you define exactly when a worn out system needs repairing?
Thats not up to me, but to the service provider. How do you know when your car needs a check up? Do you not see how silly your questions are?
Likewise there are tons of different way on telling when your pipes are going bad. A service provider is obviously going to employ preventative maintenance. Does this really require commenting?
mickanomics:How can a service provider know the long term costs of his raw materials.
All good business's have methods of projecting future costs. It's not for me to decide how they should do it, they will and have come up with their own mechanisms. This case is different for each business and industry. You obviously have never been in the business world.
Long term business cost projection needs no example needed to provide.
mickanomics:What if the amount of the utility that people desire dramatically changes due to some new technology - for example if someone invented "hover cars" and roads were no longer needed.
That company can adopt the new technology and sell it, or go out of business. What, do you think we should still be riding horse and buggy's? This is currently happening with the DSL technology over cable. Forcing people to purchase stagnent technology is just counter productive and plain dumb.
mickanomics:Can the contract signer really know what is going to happen in 20, 30, 40 years?
Irrelevent question. He doesn't need to, and your likely to never see a 20 year contract. Only idiots would sign up for such garbage. Or perhaps maybe you think we should bailout all those forclosing homeowners?
No example needed, comment is ludicrous.
mickanomics:The cost/quality of a utility provision is *always* going to be liable to change, perhaps radically so, in the long term regardless of what any contract says.
Hence the need/point of competition. Thanks for pointing that out for us. :)
mickanomics:I can't remember which page it was on, but the gist was that finding examples seemed a very useful exercise in the case of private roads. So why not do it again for water.
As I just told you, it's not a useful excersize for the reasons I stated here. I have re-iterated several times that you are using a logical fallacy to defend your argument. Do you know what a logical fallacy is? I have linked this like 4 times now. Argument from Ignorance Can you please read this before you continueing repeating the same fallacy over and over?
Here are the points I outlined earlier on why why the excersize is fruitless.
filc: Both Daniel and myself and others have pointed out that this argument is fallacious. Argumentum ad ignorantiam. You are exploiting the fact that the government has eliminated several private firms simply by being the monopoly in the industry. Then asked us to provide examples in a market controlled by the government. Despite the advantage you've given yourself we have still sited several cases for you. You have conveniently shrugged them off. We have no need to site real-world examples that such business's could exist. Our argument is that the Burden of Proof lies on you to prove to us that such business's could not exist. You cannot use the Argument from Ignornace to argue your point. The truth is you would never be able to disprove it. Regarding proof. Besides the fact we have no need to site examples to further legitimize our argument, there is far more merit in our argument than yours, this is why. The only ones services/goods not provided on the market are ones taken over by government from legal monopolies. In such cases they have been pushed out by force. The only reason why utility companies are in existence is becaue it is illegal to create your own. It's not the presence of a government utility which destroy's the market. It's the force applied to that utility and legal elimination of competitors which destroys the market. Our argument however holds far more merit than yours as more goods and services are delivered via the free market than by government.
Both Daniel and myself and others have pointed out that this argument is fallacious. Argumentum ad ignorantiam.
mickanomics:I think that its you that has not thought it through. Pipes are way bigger than low voltage wires and harder to work with. Just go out and find some workers digging up a road to lay/maintain/replace water/sewage pipes - then go and find some workers laying/maintaining/replacing some low voltage wires. You'll see an *enormous* difference in the amount of general disruption.
As someone who's actually built a few homes before I can tell you that electrical piping under your home is often times the same size as plumbing piping. It's also just as easy to install. Perhaps you think we live in a Mario Brothers fantasy world where entire different worlds exist inside your pipes! I got news for you, they arn't that big, but that would be cool.
When you will stop making comments about things you know nothing about?
mickanomics:I never said the competition had to be international. You can (and usually do) have more than one utility company per country.
So how does a competing utility company expand it's market by coming into Seattle Washington? Oh thats right it would be illegal for them to do so, as they would be overtaking city utilities. In other words your argument is worthless.
mickanomics: I think your position that 100% of all governments everywhere on earth refuse to allow multi-provider water provision in every single town is untenable.
If the government allows multi-provider provisions then it's more of a free market now then isn't it? :) Albiet with probably some rediculous barriers to entry and licensing of sorts. This is where crony capitalism replaces dictatorial social planning.
Honestly Mick, at this point you have revealed how ignorant on a great many things you really are. I don't think anyone here actually thinks you have a PHD. don't mean to personally attack you but to be quit honest and frank, It's extremely hard to take you seriously on any of this. This whole debate is more of a waste of time as you are either taking a heavy dose of drugs or are mentally retarded to some extent.
If I've ignored some of your other posts it's because they were probably now really well though out by you and sounded very dumb.
FYI Several third world country's employ private means of keeping their house full of water. Some houses in Honduras actually have large water bins up on top of their roof. A private company can come and fill it on a daily basis, or you can go out with your pickup and a large water bin and get some water for yourself. I know this because I lived in Honduras for a while.
The government there does a poor job of adequately providing water, so private company's have taken over to save the day.
Those black bins on the roof are common sites in Honduras villages.
Water can be deliverd to you. The guy I lived with went to get his own water though on the weekend. We had a large tub that could fit in the back of his pickup.
To close I'll quote myself from earlier since I don't feel like writing a closing statement and you still have yet to read the previous one.
filc: Ultimately we are arguing in circles. Untill you start considering the weight of what we have repeatedly stated you will never accept what we have tried to present to you. It would waste less time to simply agree to dis-agree. Untill then you are just acting the Strawman trying to divert from our asserted points.
Ultimately we are arguing in circles. Untill you start considering the weight of what we have repeatedly stated you will never accept what we have tried to present to you. It would waste less time to simply agree to dis-agree. Untill then you are just acting the Strawman trying to divert from our asserted points.