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
Dear filc,
I commend the level of detail you have gone in to in your reply. Normally its the more detailed replies that make me think hard about my ideas and I often learn something new in the process of constructing individual answers to all the points. Sadly I have to report that the level of stupidity in so many of your points was so high that I feel unmotivated to reply. Statements like the one where you say that long term (don't forget the context of my post was multi-decade) rainfall patterns could be determined by watching the whether channel, are so profoundly stupid that it is not worth my time to answer.
mickanomics:Statements like the one where you say that long term (don't forget the context of my post was multi-decade) rainfall patterns could be determined by watching the whether channel, are so profoundly stupid that it is not worth my time to answer.
They were stupid answers, for a stupid question. :)
You act like business's can't do this, but they already do. Farmers try to get a heads up on the forcast a season. Same apply's many outdoor jobs. Businss's do long distance forcasting to benefit their business
mickanomics:I feel unmotivated to reply
Thats fine.
And yet for nearly 2 centuries, farmers have used almanacs precisely for the purpose of predicting future weather trends.
Mick, I think you could benefit from some time away from the city.
filc's comments were "so stupid" that you couldn't waste time answering them, instead you wasted time telling all of the rest of us how stupid they were. Thanks, you're a total dick.
============================
David Z
"The issue is always the same, the government or the market. There is no third solution."
David Z: filc's comments were "so stupid" that you couldn't waste time answering them, instead you wasted time telling all of the rest of us how stupid they were. Thanks, you're a total dick.
More than once now I have deliberately not answered questions/points because I thought they were too stupid, only to find that the poster would follow me round badgering me for an answer, even on other threads! I was just trying to prevent that happening again. Doubly so in this case because the post was so long and detailed I suspected that filc would be extra keen for me to answer his points.
You don't have to answer. I won't care either way my friend.
Anyone interested in this thread would do well to read this paper by Steve Keen:
http://www.debtdeflation.com/blogs/wp-content/uploads/papers/KeenUtilitiesPolicy2004.pdf
Actually tha peper seems very complex and I'm not claiming to have understood every last detail, but I noted that it included the followeing sentence in section 2.1:
"In the other extreme of a monopoly, the monopolistsets price where marginal cost equals not price,but marginal revenue. A monopoly therefore sells asmaller output at a higher price than a competitivemarket."
Maybe Steve Keen should give MES a read sometime.
Freedom of markets is positively correlated with the degree of evolution in any society...
mickanomics:Anyone interested in this thread would do well to read this paper by Steve Keen
Steve Keen. 'Nuff said.
Jon Irenicus: Maybe Steve Keen should give MES a read sometime.
MES?
Man, Economy and State.
liberty student: Steve Keen. 'Nuff said.
Thanks for the link - I shall read it with interest.
mickanomics: Anyone interested in this thread would do well to read this paper by Steve Keen: http://www.debtdeflation.com/blogs/wp-content/uploads/papers/KeenUtilitiesPolicy2004.pdf
His argument is not against private utilities but against capitalism as a whole. If he were correct then governmental regulation of ipod distribution would render cheaper and more abundant ipods with higher quality. Unfortunately the simple economic calculation debate shatters his paper which is largely based on bad mathametics and opinion.
He also fails to recognize that in general natural monopolies tend not to exist. The only instance where a natural monopoly could arguely exist in a free market is the case where the company consistently produces a higher quality good at a cheaper cost. This is undisputably better for consumers. History has shown us however that such monopolies usually never exist or never last without help from the state.
The only true monopolies that have ever existed and ever truely barred out competition is legal monoplies with powers granted from the state.
I know that mickanomics does not consider my real life example of a private road network as adequate to "prove" that roads can be supplied through a free market, but I nevertheless decided to expouse how such a private road network came into being: In Search of that Mythical Free-Market Road Network. I think that this is just as easily applicable to a residential road network, especially since (as the article infers) those paved roads which were paved by the government originated as private roads when the houses were originally built.
Jonathan M. F. Catalán: I know that mickanomics does not consider my real life example of a private road network as adequate to "prove" that roads can be supplied through a free market...
I know that mickanomics does not consider my real life example of a private road network as adequate to "prove" that roads can be supplied through a free market...
He didn't even say anything when I cited Disney World. So, I assume that this was all a trawl.