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
Caley McKibbin: 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... He didn't even say anything when I cited Disney World. So, I assume that this was all a trawl.
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.
I have already acknowledged that the free market can provide roads, but only under certain restricted conditions and often under circumstances which lead to a very similar set of problems to the ones you associate with government roads (please read thread from start). Disneyworld roads fall in to my "restricted conditions". Please don't make me repeat myself.
mickanomics:Disneyworld roads fall in to my "restricted conditions". Please don't make me repeat myself.
I hate to sound rude but I actually did read the whole post and missed this point. Would you be so kind as to elaborate what you mean by "restricted conditions"? It's hard for us to defend our stance if we don't know where your coming from. Thanks Mick.
filc: mickanomics:Disneyworld roads fall in to my "restricted conditions". Please don't make me repeat myself. I hate to sound rude but I actually did read the whole post and missed this point. Would you be so kind as to elaborate what you mean by "restricted conditions"? It's hard for us to defend our stance if we don't know where your coming from. Thanks Mick.
One of his fundamental assumptions is that we live in a free market, thus, since there are no private roads of the type he specifies, therefore, the free market fails.
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."
Go through the posts again paying special attention to posts where I use the words "common landlord" or "contract".
My arguments were built up and tweaked over a series of posts.
mickanomics: Go through the posts again paying special attention to posts where I use the words "common landlord" or "contract". My arguments were built up and tweaked over a series of posts.
Would you be so kind as to summarize this point in a single post for me?
Basically, he defined private roads that pass his inspection in such a way that excludes every way it would and has been done. His next thread will be "Can upside-down furniture evolve in a free market?"
There was a lot of discussion around page 13 of this thread about private companies controlling utilities. This was tried already in the water industry in Britain in the 19th century.
"Up until the mid-nineteenth century, Parliament discouraged municipal involvement in water supply; in 1851, private companies had 60% of the market. Competition amongst the companies in larger industrial towns lowered profit margins, as companies were less able to charge a sufficient price for installation of networks in new areas. In areas with direct competition (with two sets of mains), usually at the edge of companies' territories, profit margins were lowest of all. Such situations resulted in higher costs and lower efficiency, as two networks, neither used to capacity, were used. With a limited number of households that could afford their services, expansion of networks slowed, and many companies were barely profitable. With a lack of water and sanitation claiming thousands of lives in periodic epidemics, municipalisation proceeded rapidly after 1860, and it was municipalities which were able to raise the finance for investment which private companies in many cases could not. A few well-run private companies which worked together with their local towns and cities (gaining legal monopolies and thereby the financial security to invest as required) did survive, providing around 20% of the population with water even today. The rest of the water industry in England and Wales was reprivatised in the form of 10 regional monopolies in 1989."
http://books.google.com/books?id=wDLwD5LpXcIC&pg=PA205&lpg=PA205&dq=%22Parliament+discouraged+municipal+involvement+in+water+supply%22&source=bl&ots=aKWIzMz3GO&sig=htUE0euNRupQLhx6sRgmvY7zhUE&hl=en&ei=jmnLSo2yGY-wtgeZwLDkAQ&sa=X&oi=book_result&ct=result&resnum=3#v=onepage&q=%22Parliament%20discouraged%20municipal%20involvement%20in%20water%20supply%22&f=false
Yeah tried and tested, never again mirite? So much better to have coercive monopolies handle things, as they can finance them! Who needs innovation or alternative ways of doing things, the market simply failed so now forevermore the government shall provide!
Drone.
Freedom of markets is positively correlated with the degree of evolution in any society...
mickanomics: With a bad government, you can get rid of them at the ballot box. This is not a perfect solution by any means, but at least its a possibility.
With a bad government, you can get rid of them at the ballot box. This is not a perfect solution by any means, but at least its a possibility.
I am sorry, I wasn't going to respond until I saw you say this.
Are you American? If so, then you'd know Obama is no different than Bush was. Clinton was no different from Bush Sr. There are no politicians in office who aren't crooked or hypocrites. Reagan was an utterly failing; when he left office, government power increased by two times or more!
Just how free am I for having voted for Obama over McCain? Or Paul over McCain? No more free than the day I was born into this unjust, unnatural, socially rigid system.
Democracy = You loss this round, better luck next time!
As long as there is a system called the "state", men will seek to control the lives of their constituents, or be corrupted by the very power they seek.
What we have now is not a Free Market. A Free Market is = separation of state and economy, or no state at all. What we have now is a "mixed economy". The government has zero incentive to maintain the roads. Hell, maintaining them = they go broke! Hell, Virginia has been trying to cut back spending, (they make no profit!), they just allowed a company to build a 15 mile long private highway, built, planned, and paid for by this private company. I think it's the "Green Dulles Highway" or something.
I recommend two books for you. Walter Blocks "The Privatization of Roads and Highways" and "The Voluntary City" by the Independent Institute.
Just because you, or I, or anyone else on this thread has the imagination to figure out how a private road would work, doesn't mean it won't work. You're ignoring way too many good arguments or you're just blinded.
<grumbles>
You observe, but you do not see.
AprilEast:There was a lot of discussion around page 13 of this thread about private companies controlling utilities. This was tried already in the water industry in Britain in the 19th century.
Your post is wrong on all kinds of levels.
A) You can't say that because a single private business failed or a few failed that capialism has failed. Indeed when a business fails capitalism is suceeding. It is pushing that bad business man out of the market.
B) New entrapaneurs did not ever get a chance to introduce themselves into the market becuase of whatever existing regime at the time and because eventual governental takeover. Economics is one of discovery where the most innovative/creative/person wins in the long run.
AprilEast:In areas with direct competition (with two sets of mains), usually at the edge of companies' territories, profit margins were lowest of all. Such situations resulted in higher costs and lower efficiency, as two networks, neither used to capacity, were used.
All this states is that something or someone (government) prevented these firms from upgrading their existing infrastructure. Something barred their way from allowing their product to become cheaper therebye maintaining their competitiveness. A true private monopoly cannot exist, only ones granted by the government can last through the ages.
C) Perhaps the greatest example of the successes of private water providers can be found in the poorest countries in the world. Most 3rd world countries have their water provided by a private company because their local governances fail so horribly on such a simple task. Even in country's where fresh water is in insanely abundant government fails at the job and the people naturally subscribe to a water provider.
Even in your own country water has been outsourced to the private. In all rural areas water is privately owned and in city areas drinking water is generally privately owned and delivered. Water through tap is quickly becoming a thing of the past. Shoot, people are now switching to stored rain water to water their lawn over tap.
Your argument that private water has failed only reveals that government is nothing but a creed to you, or religion. See my signature. You are like the Christian arguing to the atheist, or vice versa. All you did was google up some book which was probably written in extreme bias on a singular case and posted it here on the forums. Thats like Microsoft saying personal computers are stupid when the firs one they build fails. It's an entirely counter productive attitude. You default to the government in haste and find every excuse you can permeate government in all things. Have you actually read up on the history of this specific case? I'll admit I have not but I have read up enough on modern private water systems to know that they are completely fine and in all counts run more efficiently then government ones. Cheaper to. :)
My advise to you, leave the US and live else where, specifically a third world country. You have much to learn.
279 posts on this?! For Heaven's Sake!
Merlin:279 posts on this?! For Heaven's Sake!
Daniel:One of his fundamental assumptions is that we live in a free market, thus, since there are no private roads of the type he specifies, therefore, the free market fails.
In terms of $$ volume, the largest land trade artery (arguably the single most important thoroughfare) for the United States is privately owned & operated. Has been ever since it was built 80 years ago.
It's called the Ambassador Bridge.
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David Z
"The issue is always the same, the government or the market. There is no third solution."
mickanomics: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.
You are joking, right?
Caley McKibbin:You are joking, right?
No, I'm not joking.