I have a question to ask. Is privatization of everything reallygood? For example, if say we privatized scientific research. Then isn't it true that many scientific discoveries would not have been made since there are many scientific research that are not really profitable but are being carried out for the sake of human knowledge. There are many other things that may not be profitable but are a necessity for betterment of human life.
Wouldn't it be better to have such things be done in fifty years, then do them now when they are not marketable? You yourself are arguing against expensive unprofitable research, since you admit they don't have any immediate benefit. Capital generation is more important, so that discoveries are timed when they can be mass produced at low cost and sold at low prices to consumers who can afford them.
As it is, drug companies spend billions on research that takes a decade or two, and there are already mechanisms for evaluating returns far ahead in the future.
Do note that an oil well can take twenty years to break even on original exploration costs and all else, and oil companies still do it.
Not everything that is beneficial to us can be accounted in material terms. For example, Let's talk about parks. I am sure we do not want to pay a fee to visit a park but having a park nearby us is definitely going to be beneficial to us since we do need a break from our work sometimes. Why would someone actually construct a park using his/her own money near our office since it is not going to be profitable as no one would pay to visit that park. Yes it would be beneficial to have a park but privately no one is going to construct that park because it is not going to generate profit for them.
A bit about parks. "Profitable" in monetary terms does not nessecarily mean "profitable" in absolute terms of means and ends. People can and will build parks because they want them. Someone building a residential area knows that people enjoy parks, so they are likely to include them in thier plans. Likewise, neighbors in an area may decide to buy an unused parcel, or aquire an abandoned one, and turn it into a park. I've actually seen this happen personally. In my job, I'm occasionally going into severely depressed areas like North Philadelphia where there are loads of abandoned properties. The houses collapsed years ago, they're just vacant parcels with a bit of topsoil and grass on top of the brick and debris that filled in the old rowhome basements. In many areas, people have gotten together and made little community gardens and parks in an attempt to spruce up some of the nieghborhoods. Many are actually very nice. You can do a lot with some volunteered time and a bit of material.
The saddest part is that they city doesn't know about these. So they go ahead and plan to build Section-8 housing units on all the "abandoned" lots. They come and demolish these things and build more el-cheapo housing that will be trashed in a few years. The city sees them as "abandoned" on thier maps and just plows ahead. They use eminent domain to claim the old titles from the abandonded, absent, or deceased owners, and claim right over said land, despite the fact that a group of people have clearly homesteaded the property.
To me this is a clear example of how state beuracracy confounds the voluntary efforts of some of the poorest people in the nation to better thier lives.
As MaikU points out, the appeal to public parks as some 'good' that 'we' value is nowhere evident, or even necessarily coherent. Some people, myself and Ayn Rand included, prefer the sight of towering monuments of glass and steel to any random path of greenery. To me commerce and industry are attractive, active, exciting; whereas the wilderness is precisely what I seek to avoid by having gainful employment. Go camping, if you must, but don't expect me to pay for it. If I had to choose between never seeing another tree and never seeing another bankinghouse, I would easily give up trees.
Nice point of view. But you still have not answered me on why would any capitalist voluntary build a park for someone else. I mean the capitalist like you and me know that it would be impossible to benefit monetary from building a park but I am sure that a park would benefit most people living around that area. If I am a capitalist I would not venture in anything that will not give me any gain in the first place and I would definitely not build a garden unless I am a housing developer and building a garden will definitely increase the worth of the surrounding area. But say in a commercial area, I will not definitely build a park in a commercial area while if I am the mayor, I may build a park there as I need to do that in order to win the vote of the people. Thanks for sharing though. I did learn some extra economics concepts.What I am trying to say is that what the government can do which entrepeuners cannot do is that they can run projects that can benefit the population even though the projects may suffer a net loss. But then those projects may benefit the population overall whereelse in a free market situation everything happens based on profitability and projects that may benefit the population but not be beneficial to the businessman will not be undertaken. Is it true therefore that we perhaps need the government but maybe not to manage the most important things?
I also doubt whether it is true that everything 'we' value can not be accounted for in material terms. Philosophically, I am not sure that even makes sense from a realist standpoint. In any case I do believe everything I or any other individual values CAN be accounted for in material, economic terms. Not all of these things are monetary, but all action is economic in nature; exchanging one set of affairs for another.
Hahaha James. But i am sure you are of the minority. I am in the programming field and my eyes are really swollen looking at the computer screen for more then half of my time. It would be nice to see something other then just radiation and i am sure a little bit of greenery would do me well. What I am just trying to argue is that the free market may not supply what the public generally wants as it may not be profitable to do so.
Nice point of view. But you still have not answered me on why would any capitalist voluntary build a park for someone else.
The same reason grocery stores build parking lots that even non-customers use. Because it attracts people to their business and is more convenient than charging tolls for everyone.
Beyond that, even if it were true that no capitalist would ever build a park: so what? Why do you think other people ought to be forced to subsidize your pet hobbies. I personally like skyscrapers and oil refinery. I'll expect a check in the mail next month so you can support my petty whims.
'The public' does not exist. And who cares if I am 'in the minority'? Why should some herd of tasteless boobs overrule my preferences? It's bad enough that they do it in the market, I'm not about to tolerate them doing it at gunpoint.
hahaha MaikU. I have read that book and also I have listened to many of the podcasts at the mises institute. It is the Mises instittude that invigorate my interest in economics as well as history and I really benefited intellectually from mises the actual man as well as everyone who made the Mises Institude a reality. But my father actually challanged me with this question. He said that projects that may not be profitable in the short term but may be beneficial to man kind in the long run will definitely not be undertaken by the entrepeuners but the government may actually handle those projects since they need the votes of the people. A park will definitely benefit many people but at the same time those people are not willing to put their money into constructing the park. I am just using this as an example.What I am saying is that there are many things that would have not materialized if not for the government rite?
James, how do you explain then that there are people who are willing to sacrifice their life for their country, or sacrifice their life for their love ones. How do you explain why some people love their wife more then their parents whereelse some people love their parents more then their wifes. Why do some talented people spend all of their life pursuing something that may not benefit him materialistically. There is certainly more to life then just materialism.
If the people aren't willing to put money into the park, then they really don't value the park that much.
However, I think there's a problem with your statement (or your father's statement, if you're just transferring his concerns) in that you say it "definitely will not be undertaken by entrepenuers". I think real world examples prove this simply to be false. If people like parks, they will attempt to build and maintain one should the opportunity arise.
When talking about general human action, you need to chuck out the general definition of "entreprenuer" and "profit". An "entreprenuer" doesn't have to be a small buisness owner or "capitalist-in-a-top-hat" stereotype. It can be a guy buying a taxi to make a living providing transportation service for people. It can also be a group of people getting together and building a park for public use. To park can "turn a profit" by turning an unused, vacant, or derilect peice of property into a useful one that provides recreation or pleasing aesthetics for it's users. If the users value "A park" higher than the labor, time, materials, and land used to make the park, then you've made a "profit".
You can also continue to derive revenue from such a place without setting up a stereotypical "ticket booth" or "toll-gate" charging system. Think about advertising on park benches or fences, or rights to sell concessions or food in stands or carts on the property. There are multiple ways of getting revenue from a "public good" such as a park or road without directly charging the users. However, if the park generates no revenue going forward, and requires constant maintainence, then it will operate at a loss and become like a consumer good instead of a capital good. This isn't a bad thing, it just means that the operators and users have to be able to afford that loss in order to continue to enjoy the park.
sylar:I have a question to ask. Is privatization of everything reallygood?
Yes. If a good or service wouldn't have been purchased in the free market, it is an inefficient allocation of societies resources. You may want parks, but poor people rather want food. When we have enough food, then people will want to pay for parks. Everybody thinks the market should distorted to fit our preferences. Thinking we know better than the market is especially dangerous when complacent rich kids impose what they think less fortunate people need.
sylar:For example, if say we privatized scientific research. Then isn't it true that many scientific discoveries would not have been made since there are many scientific research that are not really profitable but are being carried out for the sake of human knowledge.
State-funded scientific research actually crowds out private research. It actually reduces human knowledge.
And what is worse than to get the state to impose that humanity should spend it's resources on "knowledge" rather than to feed and clothe people? At least Hitler didn't pretend to do good.
sylar: What I am saying is that there are many things that would have not materialized if not for the government rite?
What I am saying is that there are many things that would have not materialized if not for the government rite?
Yes, there may be some. On the other hand... who knows for sure? Nobody tried free market economy (I mean truly stateless society where people understand the difference between agression and defense aka NAP). Maybe it would produce much more benefit to people that they couldn't ever imagine. We are stuck at individual level. It it's bad for someone, then society will only get worse in a long run, we see it now. Well, that's my belief. So majority's opinion is poor justification for such projects you mentioned. It's like utopian utalitarianism.
Another problem is that you think that government does it better than private institutions. Imagine if government decided what size of the shoes people should wear and regulated everything in the production. People would vote what size of shoes should be the average and these shoes would be given to all people to wear (I need not to mention that there is no choice about it. You either do what gov says or you go to jail). So what happens to people with super small foot or extra large ones? They would feel very uncomfortable to say the least.
I think, man kind is term that has no meaning in economics. Man kind doesn't think. Man kind doesn't make decision. Man kind doesn't suffer and is not responsible for bad decisions. It's very overused concept (like society) and is only "useful" in political propaganda.
My final point: And since WHEN government cares about the long term effects? It never DOES. That's the principle of modern democracy. We see it everyday with massive crisis, depression etc. etc. You elect people for a few years into the office to make some money and to be on television. That's about it. They do not care about long term effects at all, because they are not using their own money. They do not hold such responsibility that a private person would. They are using STOLEN goods. That's the biggest flaw in your father's argument. But first you have to show him how extremely inefficient government is otherwise he won't believe you.
(english is not my native language, sorry for grammar.)
"how do you explain then that there are people who are willing to sacrifice their life for their country, or sacrifice their life for their love ones. How do you explain why some people love their wife more then their parents whereelse some people love their parents more then their wifes. Why do some talented people spend all of their life pursuing something that may not benefit him materialistically. There is certainly more to life then just materialism."
Somebody hasn't read much AE - this is dealt with in Menger!! When Austrians talk of 'value', they mean a utility that is purely subjective; when they talk of 'profit' they are talking of 'psychic profit' that leaves one in a state of lesser uneasiness than before - its relation to material goods does not necessarily exist.
As for parks, are you really trying to argue fiant horti, et pereat mundus ('let there be parks, though the world perish')?
Sylar:Then isn't it true that many scientific discoveries would not have been made since there are many scientific research that are not really profitable but are being carried out for the sake of human knowledge.
What does society gain by investing scarce resources into that which they will never use or find useful? Your not going to solve world hunger by throwing natural resources down the drain. :)
James, how do you explain then that there are people who are willing to sacrifice their life for their country,
You mean people are willing to die for nonsensical magical thinking that the State uses to cloak its militaristic ambitions? Well, there's a sucker born every minute.
or sacrifice their life for their love ones. How do you explain why some people love their wife more then their parents whereelse some people love their parents more then their wifes. Why do some talented people spend all of their life pursuing something that may not benefit him materialistically. There is certainly more to life then just materialism.
You have no meaningful definition of 'materialism'. All human action has to do with scarce resources. Preferring playing piano for fun to making millions as a stock broker is an allocation of scarce material resources, including time, to more highly valued ends. All human action is economic. Everything.