*** The official market and government thread ***

[wufwugy]

Okay let's do everything in here instead of the rando thread. Even if in the future, somebody wants to respond to a post on the government/market topic in the rando thread, just quote it and do it here instead

[wufwugy]

I mean, if the state doesn't have a monopoly of violence it can't enforce rules, if it can't enforce them then it loses the power to create them. If it isn't creating them, then who is? The guy who is wealthy enough to pay for the best enforcement. All we're doing is switching one master for another.

Nobody is that wealthy. No groups of megacorporations are that wealthy. The Chamber of Commerce isn't that wealthy

The philosophical foundation taught in political science textbooks for where government gets its power is legitimacy. More specifically, legitimacy it is granted by its people. Our three branches and your parliament function because their constituents consider themselves true constituents and support the authority of the governing bodies. Of course there are all sorts of dynamics for why this happens, but the bottom line is always legitimacy. A revealing example of this is found in the US judiciary. The Supreme Court mostly rules in favor of public opinion because it must maintain legitimacy. It has no executive authority, so if people or other branches get mad enough at it, it loses all its power. This is why the court usually doesn't rule against the tide

I don't see reason to think there is a critical mass of wealth that market entities can accrue that could effectively create a new government without the legitimacy support of public constituencies. Market entities are functionally not well-suited towards governance by mandate since they operate on an entirely different paradigm: consumption by choice. If there was magically no more government tomorrow, and the Kochs, Walmart, and Jon Stewart wanted to form a new government, and they even got a hefty sum of other companies on board, they wouldn't be able to since their profits would plummet. They would plummet due to consumers not liking what they were doing as well as by the massive costs created by trying to create a new government. Those companies would lose so fast that they'd change course in an instant. Hell, they wouldn't even try to make a new government in the first place. The profit by consumption choice is an entirely different paradigm than the revenue by tax mandate from force one.

Keep in mind that the original proto-US didn't have a federal government. That worked just fine until the other state governments saw the threat of the people having too much power and overthrowing one of the state governments (Shay's rebellion in Massachusetts). The irony is that the proto-US states under the Articles of Confederation became the new British government, trying to stamp out rebellion of their own people caused by their own abuse of its people


If government disappeared overnight, brand new ones would appear by evening. Not because it's how markets work, but because it's what the populace wants. The only way we will get smaller government is by convincing the people that smaller government is better. At a gradual pace, if hundreds of years from now, government no longer exists, it will be because with ever chunk lobbed off the state, market dynamics came in and reinforced the competitive sustainability at its core

[rong]

None of that changes the fact that rules need to be enforced.

You act like policing can be of purchased as and when required. But the threat of it needs to be there at all times.

I just don't get how it practically works.

I guess you'd put districts out to tender. But you'd still have the government managing that process which kid of ruins it because to breed competition you need the ability to switch product / service provider which we know the government would be very slow to do. Or would you have local councils and mayors deciding who the police should be for their own district? You'll still have people playing politics and making promises except when they make deals it would be with someone who temporarily holds a monopoly of violence and is no doubt reluctant to let that go.

So to make it truly independent of government you'd need individual people deciding just how much policing they'd like to buy today, sand they'd be in serious trouble if they fell on hard times and there'd be lots if areas where the population isn't dense enough to justify much policing at all in the cost per person to provide it wouldn't be economical so great chunks of land would he lawless.

[wufwugy]

None of that changes the fact that rules need to be enforced.

Private entities enforce their own rules. We have this for most aspects of our society already.

You act like policing can be of purchased as and when required. But the threat of it needs to be there at all times.

We already do this for other things, like car insurance. Or a different medium in community organization or self-defense. Safety of communities comes very little from the police, and it could be argued police make them less safe. Virtually all safe communities in the modern world are ones where the police do next to nothing, where the people themselves value safety, responsibility, and cooperation. The market approach is to let people who value that purchase it instead of forcing them under the arm of government. If government was benign, this wouldn't be a problem, but as we can see, government is far from benign. The amount of people unduly harmed in modern countries likely comes more from governments than from wrongdoers.

I just don't get how it practically works.

I guess you'd put districts out to tender. But you'd still have the government managing that process which kid of ruins it because to breed competition you need the ability to switch product / service provider which we know the government would be very slow to do. Or would you have local councils and mayors deciding who the police should be for their own district? You'll still have people playing politics and making promises except when they make deals it would be with someone who temporarily holds a monopoly of violence and is no doubt reluctant to let that go.

I would have no body that collects taxes. This means that all arbitrators would exist based on choice of consumption. This is an attempt to make law work as awesomely as software or food (where government does little), as opposed to the disaster that is healthcare or education (where the disaster exists because of how much government involves itself).

Nobody holds a monopoly on violence if they don't collect tax.

So to make it truly independent of government you'd need individual people deciding just how much policing they'd like to buy today, sand they'd be in serious trouble if they fell on hard times and there'd be lots if areas where the population isn't dense enough to justify much policing at all in the cost per person to provide it wouldn't be economical so great chunks of land would he lawless.

Most land is already "lawless". You could say 99%. Even the land smack dab in the middle of the most lawful regions (inner city) still operate in what could be called lawlessness. Is it not a head-scratcher that the places with the most violence are the places owned and regulated by the government (public streets)?

The idea that we need the government to keep us lawful is no different than the idea that we need religion to keep us moral. This may be a new argument to you since it seems you didn't grow up religious, but one of the go-to arguments Christians make against atheists is that without god, everybody would be free to rape and kill and steal. The argument is clearly bullshit, but Christians believe it. They even go so far as to say that the reason why atheists aren't belligerent criminals is because they don't truly believe god doesn't exist. Their faith in the "obviousness" of why god is good is quite similar to the faith many have in the state.

[wufwugy]

It should be noted that I don't know where I stand on the level of hawkishness or dovishness the US government should have on foreign relations. I certainly think hegemony is important, but that it should come at the hands of enterprise. There's no better way to get people on your side then to increase their prosperity and freedoms. I also think that because there is an assumption that the only international security forces are state ones, it suggests that they need to have no absence of strength. I am unsure if the US government should focus on militaristic expansion or just defense while promoting capital expansion.

GHW Bush's foreign policy might be the best example of what international relations should look like. It was coalition building and viewed justly. His son's mistake was mostly about not properly evaluating what an occupation requires. Granted, nobody knew what it would take. The military was wholly unprepared on the administrative side. Marines can blow shit up like nobody's business, but it takes an entirely different set of principles and tools to occupy and reform civic traditions. Obama has screwed the pooch on both the Middle East and Russia. It's important to make sure regional actors take responsibility for themselves, but Obama's approach has been little other than vacuum-creating

[Renton]

I think that in a stateless society that many new forms of insurance would step up in a big way to better accomplish the tasks we depend on government for today. I also think in such a world, humans would have fewer barriers between actions and consequences, and would become much stronger and more productive for it. I'll go into that later in this thread, but for now I'd like to make an easier market vs. state point.

***

To avoid being too general in this thread, I'd like to focus the topic to comparing how a stateless society would handle roads/highways/sidewalks much better than states. The way things currently are, most roads are owned by the state, and are considered a public good. As such, the behavior of drivers must be regulated by the state. Additionally, there's no incentive for users of the roads to be frugal with the use of the public good. As a result, we have rush hour, where everyone clogs up the roads at the same time every day, wasting each other's time, lowering each other's productivity, and ruining the atmosphere.

This is a classic example of the way in which deeming a scarce resource (the road) to be free causes the resource to be squandered by all. Governments do what they can to alleviate traffic, adding lanes and widening roads where they can, but it turns out that resources are scarce while desires are infinite, and more users just clog up the newly added lanes. Then you get into all these regulations where people have to carpool or you increase consumption taxes on vehicles and fuel, etc. but the roads still become a financial boondoggle for the local governments that always outspend what they take in. And the state police force gets bogged down with all of these quotas to alleviate traffic violations or deal with accidents.

Classical liberals believe that private property solves most of these problems. When a private person owns a road, he attempts to make a profit from it. He provides rules for how people behave on his property, and he excludes users who don't follow the rules. He pays for security to enforce the rules of his premises. All of this is accounted for in his own budget, which needs to be sustainable or he will go out of business.

Importantly, a for-profit road owner goes way out of his way to avoid the financial liability that comes with car crashes, especially fatal ones. You will rarely if ever see a private road with a pot hole or an oil slick for this reason. Corporations simply have much more incentive to increase safety of their customers than the states for their citizens. I suspect that if all roads were privatized, traffic fatalities would be decreased by at least 90%.

I haven't even mentioned what positive effects prices would have on the use of roads. What do you think will cause more people to carpool: some weak sauce government initiative, or a toll for the road? There's also the prospect of peak-load-pricing, whereby a freeway would have a higher toll during rush hour. This makes perfect sense to institute, considering the increased demand during those hours. People would have much greater incentive to drive during off-peak hours, and even employers would change the shift hours for their employees to take advantage of this incentive.

So now comes the classic leftist argument of "what about the poor people who can't afford the for-profit roads?" The answer: they're already paying for them anyway. I can't speak for outside the U.S., but in the U.S., road maintenance and construction budget generally comes out of consumption taxes for fuel and fees for auto registration. Consumption taxes are notoriously regressive, hitting the poor even harder than the rich.

***

The main reason I went on this digression in the middle of the market vs. state police debate, is because I believe a big part of why there is state police is because there is so much public land for them to enforce their bullshit laws on. The U.S. government owns something like 1/3 of all the land in the country, much of which is roads.

[wufwugy]

Consumption taxes are notoriously regressive, hitting the poor even harder than the rich.

Great post. I want to address this one line.

Consumption taxes have gotten a bad rap. Well, they deserve it because taxes deserve it as is, but of all the different types of taxes, consumption appears to be the best. Most people in the media have the idea that they hit the poor the most. The optics are there: higher percentages of poor incomes are spent on consumption taxes, etc. But it appears that the economics doesn't support the idea.

What I'm getting at is that investment is the same thing as consumption by GDP metric, and savings is just delayed consumption. The economics profession widely considers taxes on capital to hit the poor heavily. These sorts of taxes, including income, corporate, estate, etc., function as a disincentive for prosperous behavior.

Case in point: the current left-wing tax preferences would hit estates very high and sales very low. This means that if you're worth $100MM and you're old enough to expect to die within ten years, the move where the most comes of your money pre-tax is for you to spend like crazy. You should buy as many lavish toys as possible, all things that will perish in value over time. You should leave very little for your kids. You should leave little in investments. The more you spend and the less you invest, the more utility your money brings before the government takes it

This is clearly disastrous economic policy, but it is pretty much the policy we currently have. Our tax policy gives all the incentive in the world to throwing money down the drain. It gives little incentive to investment, saving, and growth. This doesn't hurt the rich that much, but it hurts the poor tremendously. It's another piece of the poverty trap. It's a serious cog in the engine of growth for everybody. It's a paradigm where the best decision is also the worst decision. The more incomes are taxed instead of consumption, the more people should spend. But that over-spending is a culprit in hurting savings and keeping the poor poor.

What we want instead is for all taxes to be on consumption. Even if every sale is accompanied by 200% price increase from taxes, it's still much better than paying only 10% on sales and having to make up the rest with income and capital taxes. High income/capital taxes punish savings and investment while rewarding wastefulness. But high consumption taxes punish wastefulness and reward savings and investment.

We do not want an economy where people see their incomes provide more utility by purchasing a third television instead of being invested. Sadly, the tax on capital is far worse than it looks. I don't fully understand it, but the entire process money has to go through in investment channels makes it triple taxed. So the tax rate on investment is something like 5x higher than standard taxes on consumer toys (mostly junk)

Sapolsky is right. Humans are chimps with bigger brains. That's why things as simple as a tax system that provides proper incentives is so important. People be throwing shit down the drain because capital/income taxes are so high and consumption taxes are so low



Man that ended up being so much longer than I thought. Sorry

Anyways my main source is Econlog economists, if anybody cares. They support all taxes being moved into the form of consumption and employee-side payroll, set up in progressive format. Frankly I don't think the progressive format has much utility, buy I honestly don't know

[Renton]

Yeah all taxes hit the poor pretty hard, I would agree with that. I'm actually being slightly dishonest when I say something like "consumption taxes hit the poor harder," because I'm kind of pandering to people who aren't capable of looking past the first layer on any economic issue. Clearly, they more directly affect the poor than the rich.

[rong]

Skipped a lot as no time to read all and post. But wuf, what you're saying doesn't stack up. You'll end up with lawless ghettos populated by the one while the wealthy elite live in self exposed exile in their pretty policed prisons.

[rong]

One = poor

[Jack Sawyer]

Case in point: the current left-wing tax preferences would hit estates very high and sales very low. This means that if you're worth $100MM and you're old enough to expect to die within ten years, the move where the most comes of your money pre-tax is for you to spend like crazy. You should buy as many lavish toys as possible, all things that will perish in value over time. You should leave very little for your kids. You should leave little in investments. The more you spend and the less you invest, the more utility your money brings before the government takes it

So what? Buy your lavish toys if you literally do not want to hand over your money over your dead body. It gets the money circulating in the economy rather than accumulating interest in the Bahamas. YOLO

Plus, in reality that scenario will never happen in the history of mankind

This is clearly disastrous economic policy, but it is pretty much the policy we currently have. Our tax policy gives all the incentive in the world to throwing money down the drain. It gives little incentive to investment, saving, and growth. This doesn't hurt the rich that much, but it hurts the poor tremendously. It's another piece of the poverty trap. It's a serious cog in the engine of growth for everybody. It's a paradigm where the best decision is also the worst decision. The more incomes are taxed instead of consumption, the more people should spend. But that over-spending is a culprit in hurting savings and keeping the poor poor.

A poor man has only $10. he has to buy $1 on food. Any tax on that food, whether .15c or $2 (for totals of $1.15 or $3 respectively) will be disastrous for that man. I think we agree on that.

A rich man has 1 bajillion dollars. He has to buy $1 in food. Any tax on that food, whether .15c or $2 (for totals of $1.15 or $3 respectively) is the same for that man, he just does not give a fuck.

A rich man worked his ass off to be rich. His wealth is in dr. evil territories. he is getting old, so death is near. I have not seen, in the history of mankind, a rich man go on a spending rampage to weather this impending death storm which results in him being penniless because he spent it all on hookers and blow. Those who do this were not really rich; they just had some money to play with and couldn't manage, and most likely wouldn't even be hit that hard by estate tax anyway, as it kicks in above 5MM if I'm not mistaken.

Obviously you vacan spend $5MM in a weekend in Vegas, which would make for a very grateful shark. But there is only one Guy Laliberte, and even he wouldn't do that. It's inconceivable, and if you have documented proof of this happening on a significant scale, I'd love to see it.One of the first concepts in tax class I got was "draagkracht", loosely translated being he with the broadest back can carry a bigger load. And I agree with that.

If you put consumption taxes on things, say sales tax, specific taxes on essential products (e.g. 5% on bread) instead of luxury taxes (buy a G5? Pay 50% in taxes. You should have that money. Are you not trying to show off anyway?) and estate taxes, you are obviously out to kill the little man who's live is already hopeless rather than hitting those who have, just like the little man, benefitted from the effects of said taxation but had a little it more luck to accumulate more money (such as being born a son to the King of Saudi or stumbled upon other people's projects and claim them as your own (Billy G)). I

f you can pay it, shut the fuck up and pay estate and income taxes, goddamn. Stop whining. Let's take an extreme example: Someone who earns $100.000 a year gets taxed at for example 20%, leaving $80,000 in spending money. Quite a hit. Someone who earns $10.000.000 and gets taxed at, say, 60%, still has $4.000.000 to play with, which is more money than he or she could spend anyway, and a lot more is generated for whatever tax money is needed (hopefully not more jets for defence spending). The amounts do vary greatly from these, as you do use the "schijventarief" if i'm not mistaken, which means that from say $1 - $20000 you pay 5%, from $20,001 - $40,000 you pay 10%, etc. I don;t know the amounts, but the concept should be clear.

Few things that will not happen:

- no one will stop making money because they have to pay higher taxes. If so, there would not be a single business open in the Nordic Countries et. al. as everyone would be deathly afraid of taxes they must pay. You should be in it for the love of whatever you do, not for the money you might *not* make

- People will save less and start spending like crazy in order to not pay estate tax. This one is complete and total bullshit. If so, you would not even be incentivised to start making money in the first place because you might have to pay estate taxes on it down the road. I really wonder who came up with this argument first.

- Small businesses and farms will suffer the most out of estate tax. Bullshit. If you re a small business but you are pulling in $100MM a year, I got news for you, you're not a small business.

Now, you say "but I earned 10.000.000, why should I give a shit about those who earn less than me"? Well, you should. You make things better for everyone else, not only yourself, and you can literally afford to. And still have whatever lavish lifestyle you so obviously want.



Bonus: some fun facts about the estate tax in the US
http://www.cbpp.org/cms/?fa=view&id=2655

[wufwugy]

So what? Buy your lavish toys if you literally do not want to hand over your money over your dead body. It gets the money circulating in the economy rather than accumulating interest in the Bahamas. YOLO

Plus, in reality that scenario will never happen in the history of mankind



A poor man has only $10. he has to buy $1 on food. Any tax on that food, whether .15c or $2 (for totals of $1.15 or $3 respectively) will be disastrous for that man. I think we agree on that.

A rich man has 1 bajillion dollars. He has to buy $1 in food. Any tax on that food, whether .15c or $2 (for totals of $1.15 or $3 respectively) is the same for that man, he just does not give a fuck.

A rich man worked his ass off to be rich. His wealth is in dr. evil territories. he is getting old, so death is near. I have not seen, in the history of mankind, a rich man go on a spending rampage to weather this impending death storm which results in him being penniless because he spent it all on hookers and blow. Those who do this were not really rich; they just had some money to play with and couldn't manage, and most likely wouldn't even be hit that hard by estate tax anyway, as it kicks in above 5MM if I'm not mistaken.

Obviously you vacan spend $5MM in a weekend in Vegas, which would make for a very grateful shark. But there is only one Guy Laliberte, and even he wouldn't do that. It's inconceivable, and if you have documented proof of this happening on a significant scale, I'd love to see it.One of the first concepts in tax class I got was "draagkracht", loosely translated being he with the broadest back can carry a bigger load. And I agree with that.

If you put consumption taxes on things, say sales tax, specific taxes on essential products (e.g. 5% on bread) instead of luxury taxes (buy a G5? Pay 50% in taxes. You should have that money. Are you not trying to show off anyway?) and estate taxes, you are obviously out to kill the little man who's live is already hopeless rather than hitting those who have, just like the little man, benefitted from the effects of said taxation but had a little it more luck to accumulate more money (such as being born a son to the King of Saudi or stumbled upon other people's projects and claim them as your own (Billy G)). I

f you can pay it, shut the fuck up and pay estate and income taxes, goddamn. Stop whining. Let's take an extreme example: Someone who earns $100.000 a year gets taxed at for example 20%, leaving $80,000 in spending money. Quite a hit. Someone who earns $10.000.000 and gets taxed at, say, 60%, still has $4.000.000 to play with, which is more money than he or she could spend anyway, and a lot more is generated for whatever tax money is needed (hopefully not more jets for defence spending). The amounts do vary greatly from these, as you do use the "schijventarief" if i'm not mistaken, which means that from say $1 - $20000 you pay 5%, from $20,001 - $40,000 you pay 10%, etc. I don;t know the amounts, but the concept should be clear.

Few things that will not happen:

- no one will stop making money because they have to pay higher taxes. If so, there would not be a single business open in the Nordic Countries et. al. as everyone would be deathly afraid of taxes they must pay. You should be in it for the love of whatever you do, not for the money you might *not* make

- People will save less and start spending like crazy in order to not pay estate tax. This one is complete and total bullshit. If so, you would not even be incentivised to start making money in the first place because you might have to pay estate taxes on it down the road. I really wonder who came up with this argument first.

- Small businesses and farms will suffer the most out of estate tax. Bullshit. If you re a small business but you are pulling in $100MM a year, I got news for you, you're not a small business.

Now, you say "but I earned 10.000.000, why should I give a shit about those who earn less than me"? Well, you should. You make things better for everyone else, not only yourself, and you can literally afford to. And still have whatever lavish lifestyle you so obviously want.



Bonus: some fun facts about the estate tax in the US
http://www.cbpp.org/cms/?fa=view&id=2655

Like I said, the optics looks like your position is right. To the lay, macroeconomics is intuitive, but to macroeconomics PhDs, it's not

The people with the creds, who write the textbooks and teach the graduate students, do not have the view of taxation you do.

I'll address one specific example so as to not get clutter

It gets the money circulating in the economy rather than accumulating interest in the Bahamas.

This view is fundamental to the popular opinion of the economy, yet it is not even slightly representative of economics as understood by economists. Money circulation by itself does no good for the economy. Accumulating interest in the Bahamas, while a caricature of what investment and savings really does, is beneficial to the economy. Spending for the purpose of spending is waste. Krugman did the world a disservice by disavowing his education and convincing so many people of the myth that spending for the mere purpose of spending is beneficial.

I'm really just repeating economists. Your position makes a whole lot of sense, it's a position I once believed because of how much sense it made, but the more economists I read, the more they point out that isn't how economics actually functions.

[wufwugy]

Skipped a lot as no time to read all and post. But wuf, what you're saying doesn't stack up. You'll end up with lawless ghettos populated by the one while the wealthy elite live in self exposed exile in their pretty policed prisons.

We can't have a productive discussion then. How would you know if my argument doesn't stack up when you admit to not even reading or understanding my argument?

It's okay if that's how it is. People have lives


Just for kicks, I'll be succinct in response to what you said: Hunger Games is a total myth. We already have lots of regimentation in society and it doesn't look anything like lawless ghettos vs isolated ruling wealthy elite. The only places in which it looks like that to some degree is property owned and operated by the government. The places in the West with the least amount of government are the places that look the least like Hunger Games. The places with the most government are where Marlo and Prop Joe and String arise.

[a500lbgorilla]

Tragedy of the Commons?

Solved: http://en.wikipedia.org/wiki/Elinor_Ostrom

In 2009, Ostrom became the first woman to receive the prestigious Nobel Memorial Prize in Economic Sciences. The Royal Swedish Academy of Sciences cited Ostrom "for her analysis of economic governance", saying her work had demonstrated how common property could be successfully managed by groups using it. Ostrom and Oliver E. Williamson shared the 10-million Swedish kronor (£910,000; $1.44 million) prize for their separate work in economic governance.^[27]

^{Governing the Commons by Elinor Ostrom, sold in bookstores everywhere.}

[rong]

I read your posts wuf, just not the thread at the time of posting. I have since but it wasn't relevant to what we were discussing.

[wufwugy]

Tragedy of the Commons?

Solved: http://en.wikipedia.org/wiki/Elinor_Ostrom




Governing the Commons by Elinor Ostrom, sold in bookstores everywhere.

[/SUP]

Pretty market

[rong]

Most land is already "lawless". You could say 99%. Even the land smack dab in the middle of the most lawful regions (inner city) still operate in what could be called lawlessness.

Most of the land is not lawless. Pretty much everywhere I go I can safely assume that people won't just do whatever the fuck they want whenever they want and the main reason is the law and the enforcement of it. They may do what they can get away with, but surely that just goes to show the effect of the police and not the law. I know lots of people who break the law, sure, me included, but everywhere I go is is pretty safe from violence and theft. The places it isn't are the places people think they can get away with it.

Is it not a head-scratcher that the places with the most violence are the places owned and regulated by the government (public streets)?

This is a really retarded comment. The reason most violence happens on the street is it's the one place where lots of people meet and isn't tightly controlled by law enforcement via cameras or security. The alternative to the streets is private property, which is either tightly controlled with some form of security (say a football stadium) or a small locked away space (say a home). This is an argument for more policing not less.

If we take the example Renton gave of using a system similar to insurance, it fails miserably (imo).

Let's imagine that for a minute. The likes of you and I would have a reasonable amount of policing which we'd be willing to pay for. The likes of, say Ongbonga (a self confessed bum with little income) would have practically none. So what if he lives with you and I as neighbors and there are some people on the street outside smashing shit up like cars or w/e (apparently we don't have private parking). I'd call the police, as would you, as we both pay for it, and they'd come along and..... what exactly? Are they ok to smash shit up between our houses and outside Ong's? Or does Ong get some free policing? Because realistically we need these thugs arrested, even if they've only smashed shit outside Ong's house, our cars could be next and these guys blatantly don't care for other peoples property.

But realistically it won't work like this because a) it isn't a practical way of doing it. b) Ong wouldn't live near us in this example and c) because it would probably be a case that people with similar incomes and similarly affordable houses would live in a community whereby to live on this street you have to pay insurance so we know our street s protected. Have to pay insurance? Heh, just to live on our street. And what if you don't? Would our security come along and turf you out? Almost sounds like the government we've just done away with.

But forgetting the turfing out thing, there would be areas full of people who all agreed to a certain level of insurance/policing/security and other areas where people don't. ie ghettos and fortresses. I also imagine the decent jobs would be within the fortresses and fuck all would be in the ghettos. I would imagine that based on the status quo blacks and Hispanics would populate the ghettos where there is no law and order and white middle class+ folk would populate the fortresses.

So to clarify, if policing and law enforcement is supplied on a person by person basis you'd have a huge free loader problem, which would lead to common agreements between like minded people agreeing for their area to have x amount of policing which would lead to a huge disparity between the level of law enforcement in different areas and in turn wealth as the security will follow the money.

Private provision of law enforcement is basically saying fuck the poor even more than we already do. Kiss goodbye to social mobility and give the rich a large private armed force. And where do you think the law makers will live?

[wufwugy]

Most of the land is not lawless. Pretty much everywhere I go I can safely assume that people won't just do whatever the fuck they want whenever they want and the main reason is the law and the enforcement of it. They may do what they can get away with, but surely that just goes to show the effect of the police and not the law. I know lots of people who break the law, sure, me included, but everywhere I go is is pretty safe from violence and theft. The places it isn't are the places people think they can get away with it.

We're using the term differently. You're calling "lawless" a state of wrong behavior. I'm calling "lawless" a state of ineffective mandates. Most of what goes on in society is not that affected by the reach of the law. Think of the internet or dating or going to friends homes or how you work with coworkers. It's all general market behavior.

This is a really retarded comment. The reason most violence happens on the street is it's the one place where lots of people meet and isn't tightly controlled by law enforcement via cameras or security. The alternative to the streets is private property, which is either tightly controlled with some form of security (say a football stadium) or a small locked away space (say a home). This is an argument for more policing not less.

You're right that the police does a shitty job of policing its own property. That doesn't mean we need more police, though. It means we need police to have less property. Your argument was logically heading in this direction at first.

Let's imagine that for a minute. The likes of you and I would have a reasonable amount of policing which we'd be willing to pay for. The likes of, say Ongbonga (a self confessed bum with little income) would have practically none. So what if he lives with you and I as neighbors and there are some people on the street outside smashing shit up like cars or w/e (apparently we don't have private parking). I'd call the police, as would you, as we both pay for it, and they'd come along and..... what exactly? Are they ok to smash shit up between our houses and outside Ong's? Or does Ong get some free policing? Because realistically we need these thugs arrested, even if they've only smashed shit outside Ong's house, our cars could be next and these guys blatantly don't care for other peoples property.

It would be no different than if you go to a club and this happens. The likely way communities would organize is by purchasing security for the communities. But there are like a million different ways to solve this problem, and we already use them in various capacities in other fields.

But realistically it won't work like this because a) it isn't a practical way of doing it. b) Ong wouldn't live near us in this example and c) because it would probably be a case that people with similar incomes and similarly affordable houses would live in a community whereby to live on this street you have to pay insurance so we know our street s protected. Have to pay insurance? Heh, just to live on our street. And what if you don't? Would our security come along and turf you out? Almost sounds like the government we've just done away with.

The key difference is that choice is involved. Every ounce of difference between the market and the state can be boiled down to the market operating on choice and the state operating on mandate. People can choose which communities to be a part of rather easily, but nobody can choose which government to be a part of.

Even if it "sounds like the government we've done away with", it's not anything like it unless an entity collects taxes. This small optical difference is an enormous functional difference.

But forgetting the turfing out thing, there would be areas full of people who all agreed to a certain level of insurance/policing/security and other areas where people don't. ie ghettos and fortresses. I also imagine the decent jobs would be within the fortresses and fuck all would be in the ghettos. I would imagine that based on the status quo blacks and Hispanics would populate the ghettos where there is no law and order and white middle class+ folk would populate the fortresses.

"Ghetto" is a misnomer in a market. The word exists based on government owned property. We've discussed in the past how privately owned cities and roads would eliminate these sorts of things by no longer subsidizing poverty. Move outside of the government owned or heavily subsidized areas, and you don't have ghettos anymore.

As for regimentation in wealth and class, that is good. It's one of those things that's counter-intuitive to the lay, but in economics, the most powerful weapon the poor have is their ability to live in cheap places and do things for cheap. It's the same model for why minimum wage laws have the opposite effect than intended and they just end up pricing the poor out of the job market. Every country that has moved from third world to first, including the US, operated on this paradigm. Every country that tried to not operate on this paradigm has not entered first world status.

Private provision of law enforcement is basically saying fuck the poor even more than we already do. Kiss goodbye to social mobility and give the rich a large private armed force. And where do you think the law makers will live?

The effects are already mostly like this, and the results are that the "poor" have it best. The dangerous places in the US are near government property with high populations. Go out in the burbs or the country. The police does very little, the people are generally poorer, but everybody is much safer

[rong]

We're using the term differently. You're calling "lawless" a state of wrong behavior. I'm calling "lawless" a state of ineffective mandates. Most of what goes on in society is not that affected by the reach of the law. Think of the internet or dating or going to friends homes or how you work with coworkers. It's all general market behavior.

I'm thinking of lawless as a place where the law doesn't protect me.

You're right that the police does a shitty job of policing its own property. That doesn't mean we need more police, though. It means we need police to have less property. Your argument was logically heading in this direction at first.

I never said it did a shitty job. I said in a place with lots of people and relatively little policing you're more likely to get violence. But this goes back to the point that people, when not compelled not to, are often violent.

It would be no different than if you go to a club and this happens. The likely way communities would organize is by purchasing security for the communities. But there are like a million different ways to solve this problem, and we already use them in various capacities in other fields.

This is not like a club. In a club people still have an incentive not to viciously attack me because they may go to prison for it. In a random place with no paid for protection (that's effectively what it is) I am at risk of being attacked and mugged with the attacker having no consequence.

The key difference is that choice is involved. Every ounce of difference between the market and the state can be boiled down to the market operating on choice and the state operating on mandate. People can choose which communities to be a part of rather easily, but nobody can choose which government to be a part of.

That's right. For wealthy people there is a choice whether to be safe from violent crime. The poorer you get, the less of a choice you have. What kinda shitty world do you want to live in? I guess I wanna live in a society where the right to not be violently raped is shared by all, not just those with a healthy pay packet.

Even if it "sounds like the government we've done away with", it's not anything like it unless an entity collects taxes. This small optical difference is an enormous functional difference.

Yes, it is very different from the government we've done away with in that it only protects those who can pay for it.

I guess it comes down to what's considered acceptable to charge people for. If you saw a guy on fire in the street would you check his pocket before you pissed on him to put out the fire? No? You commie bastard! There was a rent there that went uncollected. You could probably have had his salary for a whole year if you only had a contract for him to sign.

"Ghetto" is a misnomer in a market. The word exists based on government owned property. We've discussed in the past how privately owned cities and roads would eliminate these sorts of things by no longer subsidizing poverty. Move outside of the government owned or heavily subsidized areas, and you don't have ghettos anymore.

OK, forget the word ghetto, although we both know what I mean by that. But there will be areas of the country that have very little or even no law enforcement. What happens here? Do these become no go areas? Or do the security companies handle these areas for free?

As for regimentation in wealth and class, that is good. It's one of those things that's counter-intuitive to the lay, but in economics, the most powerful weapon the poor have is their ability to live in cheap places and do things for cheap. It's the same model for why minimum wage laws have the opposite effect than intended and they just end up pricing the poor out of the job market. Every country that has moved from third world to first, including the US, operated on this paradigm. Every country that tried to not operate on this paradigm has not entered first world status.

Yes, agreed, but the poor areas still need to be safe to live in. You may say they have high levels of crime in the poor areas now, but with no law enforcement it would be far worse. I just don't see how you can possibly think any areas can survive without basic property ownership and anti violence laws, and some level of enforcement of these laws. Without them it would be anarchy.

The effects are already mostly like this, and the results are that the "poor" have it best. The dangerous places in the US are near government property with high populations. Go out in the burbs or the country. The police does very little, the people are generally poorer, but everybody is much safer

That's down to higher wealth, therefore less desperation and lower population density. It is not because of government property ownership of anything. Plus we all know that law is enforced in the wealthy areas (well laws against theft and violence) far more rigorously than in poor areas. If anything this argues my point about how important it is to have laws enforced and the dangerous slippery slope we head down as we move towards laws not being enforced at all.

[wufwugy]

I never said it did a shitty job. I said in a place with lots of people and relatively little policing you're more likely to get violence. But this goes back to the point that people, when not compelled not to, are often violent.

I disagree with the premise. Risk of punishment is not a main deterrent. It certainly is a deterrent to some degree, but we have it in market behavior normally.

This is not like a club. In a club people still have an incentive not to viciously attack me because they may go to prison for it. In a random place with no paid for protection (that's effectively what it is) I am at risk of being attacked and mugged with the attacker having no consequence.

If this was true, crime data would be the opposite of what it is. The data would show places where the law has less reach having more violence, and regions where the law has greater reach having less crime. What we have today is the opposite of this.

Additionally, there are consequences in markets. Keep in mind that on the premise that consequences are deterrents, the majority of consequences causing deterrence don't come from the government but from the people themselves. Home security, locks, dogs, and firearms reduce far more breaking and entering than the police do.

That's right. For wealthy people there is a choice whether to be safe from violent crime. The poorer you get, the less of a choice you have. What kinda shitty world do you want to live in? I guess I wanna live in a society where the right to not be violently raped is shared by all, not just those with a healthy pay packet.

If this was true, it would be true for everything else. It would mean only the rich can afford food, cars, car insurance, toys, shelter, tickets to shows, you name it. Supply and demand is highly elastic. The poor have far more resources in markets than they do in states.

I guess it comes down to what's considered acceptable to charge people for. If you saw a guy on fire in the street would you check his pocket before you pissed on him to put out the fire? No? You commie bastard! There was a rent there that went uncollected. You could probably have had his salary for a whole year if you only had a contract for him to sign.

This is similar to the Christian argument against atheists I mentioned earlier. The government doesn't compel us to act good, and most of the good we do has nothing to do with money. Furthermore, most of living standards increases (like abundance of food) has to do with money. People and businesses pretty much never do what you're suggesting. When they do, it's typically on the backs of government enforcement.

OK, forget the word ghetto, although we both know what I mean by that. But there will be areas of the country that have very little or even no law enforcement. What happens here? Do these become no go areas? Or do the security companies handle these areas for free?

We already have these and they work far better than the regions with heavy law.

Yes, agreed, but the poor areas still need to be safe to live in. You may say they have high levels of crime in the poor areas now, but with no law enforcement it would be far worse. I just don't see how you can possibly think any areas can survive without basic property ownership and anti violence laws, and some level of enforcement of these laws. Without them it would be anarchy.

I'm not suggesting there shouldn't be rules and codes of conduct. Those things work swimmingly. I think they should be fully enforced, even with force. What I don't think is they should be enforced by the unaccountable, unchecked government.

My views are about getting rules to work better, societies to be safer and more functional. I'm not saying Mad Max is better, I'm saying Mad Max is a myth. It's not about rebellion, it's about reform.

That's down to higher wealth, therefore less desperation and lower population density. It is not because of government property ownership of anything. Plus we all know that law is enforced in the wealthy areas (well laws against theft and violence) far more rigorously than in poor areas. If anything this argues my point about how important it is to have laws enforced and the dangerous slippery slope we head down as we move towards laws not being enforced at all.

Socially beneficial codes of conduct are enforced much better in places with less legal intrusion as is. Places like Utah and Montana are far more secure than places like New York. It isn't entirely because of the differences in government, but that's a big one.


Does it not strike you as a head-scratcher that the bastion of crime is on government owned streets? Renton's post was on the ball about this. The incentive for the government to protect its property is far lower than for private owners. Especially considering the government has constructed a giant dependency system that keeps the poor on its streets.



Is a hundred million people voting once every two years really a good arbitrator of morals, law, and good behavior?

Your interaction with your environment is far greater through your market behavior than through this voting scheme. Doesn't this necessarily mean that law works better as a market function?

[CoccoBill]

If this was true, crime data would be the opposite of what it is. The data would show places where the law has less reach having more violence, and regions where the law has greater reach having less crime. What we have today is the opposite of this.

You have the causality backwards. Higher law enforcement presence doesn't cause more crime, more crime causes higher law enforcement presence.

[wufwugy]

You have the causality backwards. Higher law enforcement presence doesn't cause more crime, more crime causes higher law enforcement presence.

I never said higher enforcement creates more crime. Tangentially, it probably does by way of criminalizing more activity, but what I said was different.

If enforcement is the mechanism by which crime is reduced, it would show in the data. We would see higher enforcement reduce crime and lower enforcement increase it. But the data doesn't show this.

Neither side of this argument is telling of what's really going on. I made the point as a counter to the false claim that we need state-backed enforcement to keep us safe.

[CoccoBill]

If enforcement is the mechanism by which crime is reduced, it would show in the data. We would see higher enforcement reduce crime and lower enforcement increase it. But the data doesn't show this.

What data are you referring to? You're not saying that where there's less laws (fewer things that are illegal) there's less crime, right, so what are you saying? What's an example of a macro or micro level community, where there's less crime that in its peers due to less regulation or enforcement?

Neither side of this argument is telling of what's really going on. I made the point as a counter to the false claim that we need state-backed enforcement to keep us safe.

If by we you mean people with resources to protect themselves, you're right, but the point is to provide the same for everyone. The people with the means to protect themselves have zero incentive to provide the service to others for free, for crimes that don't directly affect them. A LOT falls under the category not-directly-affecting-me, and it isn't even what actually affects, it's what's perceived to affect.

[Renton]

If by we you mean people with resources to protect themselves, you're right, but the point is to provide the same for everyone. The people with the means to protect themselves have zero incentive to provide the service to others for free, for crimes that don't directly affect them. A LOT falls under the category not-directly-affecting-me, and it isn't even what actually affects, it's what's perceived to affect.

The state police forces are not effectively protecting citizens, yet at extreme financial cost. This egalitarian view of public service is pure fiction. Governments impoverish all people, especially the poor, to cover the costs of the services they provide. The private sector would do police much more cheaply and effectively, because it would have to in order to remain competitive in the market.

The free-rider problem is a problem to be sure, but the unseen of this is that the poor would be much more financially better off in the absence of a nanny state that heavily taxes their income and consumption. Thus, they would be much more well-positioned to afford security. The market for security would likewise attempt to court consumers who can't afford premium police protection. Providers would market their services to the lower-income bracket consumers just like they do with every other service in the economy.

A big problem with most (if not all) public services is that they attempt to guarantee a high standard of quality to all without accounting responsibly for the costs of such provision. There are no prices to provide an expend-or-conserve feedback mechanism so the service inevitably gets squandered by all, quality suffers, and eventually people have to do without it. This can be seen most clearly with universal healthcare systems, but it applies to police forces as well.

[CoccoBill]

The state police forces are not effectively protecting citizens, yet at extreme financial cost. This egalitarian view of public service is pure fiction. Governments impoverish all people, especially the poor, to cover the costs of the services they provide. The private sector would do police much more cheaply and effectively, because it would have to in order to remain competitive in the market.

I don't see any proof of any of this. Are you absolutely certain you're not mistaking implementation flaws in your reference system for inherent flaws in any system? Either way, I didn't say anything about effectiveness, I see safety as a basic inviolable right and I don't see it guaranteed by the market.

The default state of a community is no government. Some sort of central governance model has tended to pop up in every society throughout history, and there's a reason for it. There's a governance model in the nuclear family, not every member has the same say in things. This extends out to family, to neighborhood, to city, region, nation. In every one of them there's a governance hierarchy. You can find one in every company, soccer team and online poker community. Why? Because things go rapidly to hell if there isn't one.

Government is the governance model for a nation-sized blob of people. Saying that things would be better without one and things would just work out is an extraordinary claim, which require extraordinary proof. I haven't seen any yet. Are free markets effective? Sure. Are they just and equal? From what I've seen hell no.

The free-rider problem is a problem to be sure, but the unseen of this is that the poor would be much more financially better off in the absence of a nanny state that heavily taxes their income and consumption. Thus, they would be much more well-positioned to afford security. The market for security would likewise attempt to court consumers who can't afford premium police protection. Providers would market their services to the lower-income bracket consumers just like they do with every other service in the economy.

You're making many assumptions. I'll give you a free market solution to problem P could be a single digit, maybe in some cases 2-digit % cheaper than the public sector equivalent, but I don't think that automatically follows that everyone can suddenly afford everything. Second, you're assuming every possible P makes a valid business case, everything that people need is profitable to produce. Entrepreneurs would fill every single market segment instantaneously with innovative, cost-effective and eco-friendly products and services, it's just that they can't be arsed now because government. I don't buy it.

A big problem with most (if not all) public services is that they attempt to guarantee a high standard of quality to all without accounting responsibly for the costs of such provision. There are no prices to provide an expend-or-conserve feedback mechanism so the service inevitably gets squandered by all, quality suffers, and eventually people have to do without it. This can be seen most clearly with universal healthcare systems, but it applies to police forces as well.

These are clear implementation errors in your reference system, fixed by a simple policy change, aren't they?

[Renton]

I don't see any proof of any of this. Are you absolutely certain you're not mistaking implementation flaws in your reference system for inherent flaws in any system? Either way, I didn't say anything about effectiveness, I see safety as a basic inviolable right and I don't see it guaranteed by the market.

Look at the tax burdens of socialist nations for proof. Look at their inflating currencies. You can't effectively distribute scarce resources which have alternative uses without allowing people to bid for the resources to serve their own subjective needs and desires. It is well-intentioned to speak of inviolable rights, but it cannot be denied that safety can only be provided though the use of scarce resources which have alternative uses. How many police officers is enough to guarantee safety for 300 million people? One million? Two million? Clearly if we had 100 million police officers, then that'd be better than two million. What amount of safety must be guaranteed? What murder rate is acceptable?

States are incapable of making these value judgments. Not because they are stupid or evil or anything like that. Only participants in trade are capable of ascribing value to the resources at their disposal. But states are in a perpetual battle against basic economics. States aren't interested building wealth, they're only interested in staying elected and established.

The default state of a community is no government. Some sort of central governance model has tended to pop up in every society throughout history, and there's a reason for it. There's a governance model in the nuclear family, not every member has the same say in things. This extends out to family, to neighborhood, to city, region, nation. In every one of them there's a governance hierarchy. You can find one in every company, soccer team and online poker community. Why? Because things go rapidly to hell if there isn't one.

Government is the governance model for a nation-sized blob of people. Saying that things would be better without one and things would just work out is an extraordinary claim, which require extraordinary proof. I haven't seen any yet. Are free markets effective? Sure. Are they just and equal? From what I've seen hell no.

The issue isn't the governing, it's the coercion. Corporations have management, but they don't force people to work for them, they don't expropriate people, and they don't incarcerate or kill people who resist. In a stateless society there would leaders and probably would be government-like entities, but it wouldn't be anything like the protection rackets which exist in the present. I am not particularly interested in continuing this line of discussion because I believe most of the police stuff we've been discussing wouldn't require an extremely radical decentralization of power in order to implement.

You're making many assumptions. I'll give you a free market solution to problem P could be a single digit, maybe in some cases 2-digit % cheaper than the public sector equivalent, but I don't think that automatically follows that everyone can suddenly afford everything. Second, you're assuming every possible P makes a valid business case, everything that people need is profitable to produce. Entrepreneurs would fill every single market segment instantaneously with innovative, cost-effective and eco-friendly products and services, it's just that they can't be arsed now because government. I don't buy it.

1) Your numbers are arbitrary, free market solutions could easily be 10 (edited for hyperbole) times cheaper than their state-based predecessors, in time. Markets have a way of increasing productivity exponentially. It's very difficult to know how much governments waste because of the subjective nature of value, though.

2) Everything people value is profitable to produce, otherwise it is not valued is it? Give me an example of one thing that people value that couldn't be produced by the free market. As for government blocking a million and a half profitable business ideas from existing, yes, it absolutely does. Thankfully governments tend to only retard economic development, usually. I consider capitalism to be kind of like the grass that grows through the crack in the asphalt, against all odds. The thing is, all of the principles of markets are in evidence whether a state intervenes or not, states only distort the incentive structure.

These are clear implementation errors in your reference system, fixed by a simple policy change, aren't they?

It is inherent in any system that attempts to provide something very scarce and costly, i.e. healthcare, to all people for free. Yes, you can ration out the care with policy, but as I explained above, you run into major issues with this because you can't know the value of anything without the feedback that comes with prices and bidders. Yes some policies will be more effective than others, but without prices there is little incentive to conserve, and even less incentive to innovate. Standards of service will be arbitrary without feedback from paying consumers, and without competition with other providers. The policy can only be so effective without the incentive structure for efficiency and innovation in place.

[wufwugy]

What data are you referring to? You're not saying that where there's less laws (fewer things that are illegal) there's less crime, right, so what are you saying? What's an example of a macro or micro level community, where there's less crime that in its peers due to less regulation or enforcement?

That isn't a causal link I would put that much credence to. Maybe I would if I really wanted to focus on one small aspect, but that's not important here.

Baltimore has way more crime and way more police than Montana. I'm not claiming a causal link, I'm claiming this as a counter to the claim that enforcement reduces crime because if that was true what we would expect to see is Baltimore's crime level look more like Montana and Montana's look more like Baltimore. There are a million problems with trying to apply causality here because there are many more significant factors at play.

If by we you mean people with resources to protect themselves, you're right, but the point is to provide the same for everyone. The people with the means to protect themselves have zero incentive to provide the service to others for free, for crimes that don't directly affect them. A LOT falls under the category not-directly-affecting-me, and it isn't even what actually affects, it's what's perceived to affect.

Most of society already works like this, and it works fantastically. The areas in which it doesn't work so fantastically are ones where the government does a lot. Everything you've said about security can be said about food or housing or software or you name it. The fundamental differences between security and food or housing are minimal to non-existent. So why is it that a free market for food is so effective at providing that need for everybody when it is supposed that only government could do so? Why is it that in all the examples we have of government taking over food industries, vast swaths of populations go hungry?

What we don't want is people providing things "for free" (government does nothing for free anyways, everything it does is at cost, virtually always above market costs). We want the self-interest of competing businesses, because that is what allows consumers to choose the better product. Software is possibly the purest example of a bunch of "greedy" people competing with each other, which has rapidly created an incredible, cheap, productive, previously unfathomable software market.

The default state of a community is no government. Some sort of central governance model has tended to pop up in every society throughout history, and there's a reason for it. There's a governance model in the nuclear family, not every member has the same say in things. This extends out to family, to neighborhood, to city, region, nation. In every one of them there's a governance hierarchy. You can find one in every company, soccer team and online poker community. Why? Because things go rapidly to hell if there isn't one.

This is an argument I've made several times. It is sensible to see the obvious similarities between government and governance structures. The difference is that "government" operates by mandate fueled by taxation. "Governance" in areas like business does not have the same revenue streams. Consumers and workers in markets operate by choice. This is the one, single game changer. Everything about why government doesn't work well yet markets work well can be boiled down to the former receives revenues without competition and the latter receives revenues with competition.

Governance is fantastic. We should have as much competition in governance as we can get. Communities and businesses should use whatever sort of authority structure they think worthy. What we don't want is a state that doesn't have to compete for its revenues. In the marketplace, bad governing structures die and better governing structures are regularly created. In the state, governing structure almost never changes. All it really does is re-entrench old, ineffective governing strategies.

[CoccoBill]

Baltimore has way more crime and way more police than Montana. I'm not claiming a causal link, I'm claiming this as a counter to the claim that enforcement reduces crime because if that was true what we would expect to see is Baltimore's crime level look more like Montana and Montana's look more like Baltimore. There are a million problems with trying to apply causality here because there are many more significant factors at play.

You're contradicting yourself. It's exactly because of these many significant factors that we can't expect crime rates to be equal in different cities depending on one factor alone.

Most of society already works like this, and it works fantastically. The areas in which it doesn't work so fantastically are ones where the government does a lot. Everything you've said about security can be said about food or housing or software or you name it. The fundamental differences between security and food or housing are minimal to non-existent. So why is it that a free market for food is so effective at providing that need for everybody when it is supposed that only government could do so? Why is it that in all the examples we have of government taking over food industries, vast swaths of populations go hungry?

I don't consider software an inviolable basic right, I don't see a reason for the government to step in in any way there. Some socioeconomist might be able to tell how food and security are different economy-wise, I can't. I can't think of any examples of hungry populations due to government intervention on food supply either, except maybe for dictatorships. I think in those cases the interventions probably worked as planned.

This is an argument I've made several times. It is sensible to see the obvious similarities between government and governance structures. The difference is that "government" operates by mandate fueled by taxation. "Governance" in areas like business does not have the same revenue streams. Consumers and workers in markets operate by choice. This is the one, single game changer. Everything about why government doesn't work well yet markets work well can be boiled down to the former receives revenues without competition and the latter receives revenues with competition.

A [business|government] is founded when a group of [entrepreneurs|citizens] decide it's a good idea. All of the [investors|citizens] must chip in. In a [business|government] the [shareholders|citizens] provide funding for the operation and [hire|vote for] a management to operate the [company|government]. [Board of directors|senate/congress/president/whoever] gives the mandate the [business|government] must operate under.

A government is not unlike a business, it just operates on a different scale than most others. Think of taxation as a subscription fee. Market efficiency is utterly and completely irrelevant, if it can't provide the basic necessities for all members of society.

Governance is fantastic. We should have as much competition in governance as we can get. Communities and businesses should use whatever sort of authority structure they think worthy. What we don't want is a state that doesn't have to compete for its revenues. In the marketplace, bad governing structures die and better governing structures are regularly created. In the state, governing structure almost never changes. All it really does is re-entrench old, ineffective governing strategies.

There are 193 sovereign nations on the planet to choose from. There could be better ways, but in representative democracies the competition manifests itself by popular vote. Don't like something? Vote for something else, run for office yourself or find a better government. And yes, I know, this hardly works in most current systems, but that's an argument against current implementations of a representative democracy, not against government.

[wufwugy]

You're contradicting yourself. It's exactly because of these many significant factors that we can't expect crime rates to be equal in different cities depending on one factor alone.

Which is the whole reason why I said it's wrong to claim high enforcement has results of lower crime. I was not proposing a causal link; instead I was saying that a different proposed causal link is not supported by the evidence.

I don't consider software an inviolable basic right, I don't see a reason for the government to step in in any way there.

Are you saying that this means that inviolable rights should be given lip service or that they should be effective? The market position is trying to support the medium by which an "inviolable right" becomes as much of a reality as it can.

Some socioeconomist might be able to tell how food and security are different economy-wise, I can't.

They're not. Economists make very little distinction between how they operate fundamentally.

I can't think of any examples of hungry populations due to government intervention on food supply either, except maybe for dictatorships. I think in those cases the interventions probably worked as planned.

Lots of communist command societies as well. Which also worked as planned. It is unfortunate that our education institutions have whitewashed the Soviet era and how it was about as good of an economic test we could get for central command economics we could ever ask for.

A [business|government] is founded when a group of [entrepreneurs|citizens] decide it's a good idea. All of the [investors|citizens] must chip in. In a [business|government] the [shareholders|citizens] provide funding for the operation and [hire|vote for] a management to operate the [company|government]. [Board of directors|senate/congress/president/whoever] gives the mandate the [business|government] must operate under.

A government is not unlike a business, it just operates on a different scale than most others. Think of taxation as a subscription fee.

Taxation and subscription fees are fundamentally two entirely different things. You're still treating choice and mandates as if they're the same thing.

Market efficiency is utterly and completely irrelevant, if it can't provide the basic necessities for all members of society.

Well, government can't, so I guess that means you're now an anti-statist. Welcome to the club.

More specifically, from what we have seen from markets is that there is no reason whatsoever to believe that it doesn't provide basic necessities for all (more like most, nothing could technically do it for all). Food and shelter are home runs on the issue. Software is a grand slam as far as demonstrating the philosophy goes. Furthermore, it is in the areas where we find increasing government intervention that we find increasing problems, even in sectors that previously were not problematic. Schooling is a fantastic example of this.

There are 193 sovereign nations on the planet to choose from. There could be better ways, but in representative democracies the competition manifests itself by popular vote. Don't like something? Vote for something else, run for office yourself or find a better government. And yes, I know, this hardly works in most current systems, but that's an argument against current implementations of a representative democracy, not against government.

Sorry dude, this isn't a serious argument. It is reasonable to choose from different insurance companies or even to choose relative locations. It is not reasonable whatsoever for people to be expected to leave one tax and regulatory regime for another tax and regulatory regime.

Even then, it if was globally legal to choose which government's laws apply to you, we would see tremendous improvement in the world because of the amount of competing for constituencies different states would have. That improvement would be pretty small compared to a more market sound policy, but it would still be huge relative to where we're at today.

The irony of claiming that voting is a good option is that market choices are off the charts more powerful of a guiding mechanism than bi-yearly democratic voting. Markets are democracy on steroids.

[CoccoBill]

Which is the whole reason why I said it's wrong to claim high enforcement has results of lower crime. I was not proposing a causal link; instead I was saying that a different proposed causal link is not supported by the evidence.

I haven't seen any data for or against, 2 cherry picked US cities hardly qualify as such. Anyway, this discussion started from you claiming such conclusions can be drawn despite the lack of other know factors:

"If this was true, crime data would be the opposite of what it is. The data would show places where the law has less reach having more violence, and regions where the law has greater reach having less crime. What we have today is the opposite of this."

I completely agree it cannot be claimed without evidence that law enforcement reduces crime, despite the obvious intuitive notion, but neither can the opposite. That was my point.

Are you saying that this means that inviolable rights should be given lip service or that they should be effective? The market position is trying to support the medium by which an "inviolable right" becomes as much of a reality as it can.

...for those who can afford it. Yes, perhaps. The adequate level of safety and its effectiveness should be determined using risk management, available resources and risk appetite.

They're not. Economists make very little distinction between how they operate fundamentally.

Ok. I'm not aware of the opinions of every economist out there so I can't argue with that.

Lots of communist command societies as well. Which also worked as planned. It is unfortunate that our education institutions have whitewashed the Soviet era and how it was about as good of an economic test we could get for central command economics we could ever ask for.

I disagree. Communism is/was dictatorship/oligarchy disguised as socialism. I don't expect to see a marxist utopia implemented anywhere anytime soon, but the soviet era was hardly a legit attempt at it.

Taxation and subscription fees are fundamentally two entirely different things. You're still treating choice and mandates as if they're the same thing.

No they're not. Subscription fees and contract terms are mandatory if you want to stay with your provider.

Well, government can't [provide the basic necessities for all members of society], so I guess that means you're now an anti-statist. Welcome to the club.

Which government can't? Universal healthcare, policing, education, housing, those are the norm in all of the Nordics and a bunch of other places. Give me one example where the free market has provided these to everyone, ever?

More specifically, from what we have seen from markets is that there is no reason whatsoever to believe that it doesn't provide basic necessities for all (more like most, nothing could technically do it for all). Food and shelter are home runs on the issue. Software is a grand slam as far as demonstrating the philosophy goes. Furthermore, it is in the areas where we find increasing government intervention that we find increasing problems, even in sectors that previously were not problematic. Schooling is a fantastic example of this.

The US doesn't have universal healthcare. Why are millions signing up for romneycare, when the market has provided great affordable healthcare already to everyone? If only the government stopped snooping that the hospitals are clean and doctors licensed, effectiveness and quality would skyrocket and prices plummet?

Sorry dude, this isn't a serious argument. It is reasonable to choose from different insurance companies or even to choose relative locations. It is not reasonable whatsoever for people to be expected to leave one tax and regulatory regime for another tax and regulatory regime.

To leave is only the last option, you neglected the central method, voting, and the fact that you can also actively participate in the processes and change them from within. Government workers are, believe it or not, mostly just regular people, and government jobs are not unlike any other. Sure, in theory it would be completely viable to opt-out of certain taxes and benefits, but due to the bureaucratic burden to manage that and lost economies of scale it makes little practical sense. Just because you don't feel like opting out by changing citizenship, doesn't mean that's not viable or possible. From what I hear it might be easier to do than getting rid of a mobile subscription.

[Renton]

Healthcare in the U.S. is a corrupt hybrid of market and government and is likely worse than either. Please do not think what we do in the U.S. is even remotely free market.

[CoccoBill]

Look at the tax burdens of socialist nations for proof. Look at their inflating currencies. You can't effectively distribute scarce resources which have alternative uses without allowing people to bid for the resources to serve their own subjective needs and desires. It is well-intentioned to speak of inviolable rights, but it cannot be denied that safety can only be provided though the use of scarce resources which have alternative uses. How many police officers is enough to guarantee safety for 300 million people? One million? Two million? Clearly if we had 100 million police officers, then that'd be better than two million. What amount of safety must be guaranteed? What murder rate is acceptable?

States are incapable of making these value judgments. Not because they are stupid or evil or anything like that. Only participants in trade are capable of ascribing value to the resources at their disposal. But states are in a perpetual battle against basic economics. States aren't interested building wealth, they're only interested in staying elected and established.

Sorry it took a while to respond, had to digest a couple things for a bit.

How do tax burdens and inflating currencies of socialist nations (which ones do you mean?) prove that we're talking about an inherent, not an implementation flaw? The adequate/sufficient/correct level of police officers I already mentioned in another reply to wuf, it should be based on risk management, continuous evaluation and adjustments. If I had to choose between an efficient government and an egalitarian one, it'd be an easy choice.

The issue isn't the governing, it's the coercion. Corporations have management, but they don't force people to work for them, they don't expropriate people, and they don't incarcerate or kill people who resist. In a stateless society there would leaders and probably would be government-like entities, but it wouldn't be anything like the protection rackets which exist in the present. I am not particularly interested in continuing this line of discussion because I believe most of the police stuff we've been discussing wouldn't require an extremely radical decentralization of power in order to implement.

As long as humans are involved, there will be coercion and condensation of power, unless checks are in place. The only exception again being a benevolent dictatorship I suppose.

1) Your numbers are arbitrary, free market solutions could easily be 10 (edited for hyperbole) times cheaper than their state-based predecessors, in time. Markets have a way of increasing productivity exponentially. It's very difficult to know how much governments waste because of the subjective nature of value, though.

2) Everything people value is profitable to produce, otherwise it is not valued is it? Give me an example of one thing that people value that couldn't be produced by the free market. As for government blocking a million and a half profitable business ideas from existing, yes, it absolutely does. Thankfully governments tend to only retard economic development, usually. I consider capitalism to be kind of like the grass that grows through the crack in the asphalt, against all odds. The thing is, all of the principles of markets are in evidence whether a state intervenes or not, states only distort the incentive structure.

1) Yes they are, but I see no reason why public solutions could not be cheaper also. A government of 1 person is still a government, it doesn't need to be a monstrous behemoth. I'll concede that overall free market solutions come out cheaper, yes.

2) Value assigned on something by people is not tied to its production costs. Nothing guarantees the free market will solve all problems, just the ones with customers with adequate purchasing power. There's e.g. plenty of endemic diseases in africa that no one's rushing to create drugs for, since there's no market potential compared to the research costs.

It is inherent in any system that attempts to provide something very scarce and costly, i.e. healthcare, to all people for free. Yes, you can ration out the care with policy, but as I explained above, you run into major issues with this because you can't know the value of anything without the feedback that comes with prices and bidders. Yes some policies will be more effective than others, but without prices there is little incentive to conserve, and even less incentive to innovate. Standards of service will be arbitrary without feedback from paying consumers, and without competition with other providers. The policy can only be so effective without the incentive structure for efficiency and innovation in place.

I think the optimum solution for healthcare would be somewhere between the all-free-market and all-government solutions. Here for example we have both a flourishing private healthcare system (mostly used by corporations) and a decent public healthcare. Anyone can use the public side, just walk in, pay a fixed fee (say $30 or so), and most tests and procedures are covered by that. If you need a prescription, you get something like 40-100% rebate depending on a few factors. If e.g. queues at your public dentist are full, you get a voucher to use at a private one. Funny thing is, you hear a lot of stories about shitty service at the private clinics and great service at public ones, but these depend a lot on the area you're in.

[Renton]

Sorry it took a while to respond, had to digest a couple things for a bit.

How do tax burdens and inflating currencies of socialist nations (which ones do you mean?) prove that we're talking about an inherent, not an implementation flaw? The adequate/sufficient/correct level of police officers I already mentioned in another reply to wuf, it should be based on risk management, continuous evaluation and adjustments. If I had to choose between an efficient government and an egalitarian one, it'd be an easy choice.



As long as humans are involved, there will be coercion and condensation of power, unless checks are in place. The only exception again being a benevolent dictatorship I suppose.



1) Yes they are, but I see no reason why public solutions could not be cheaper also. A government of 1 person is still a government, it doesn't need to be a monstrous behemoth. I'll concede that overall free market solutions come out cheaper, yes.

2) Value assigned on something by people is not tied to its production costs. Nothing guarantees the free market will solve all problems, just the ones with customers with adequate purchasing power. There's e.g. plenty of endemic diseases in africa that no one's rushing to create drugs for, since there's no market potential compared to the research costs.



I think the optimum solution for healthcare would be somewhere between the all-free-market and all-government solutions. Here for example we have both a flourishing private healthcare system (mostly used by corporations) and a decent public healthcare. Anyone can use the public side, just walk in, pay a fixed fee (say $30 or so), and most tests and procedures are covered by that. If you need a prescription, you get something like 40-100% rebate depending on a few factors. If e.g. queues at your public dentist are full, you get a voucher to use at a private one. Funny thing is, you hear a lot of stories about shitty service at the private clinics and great service at public ones, but these depend a lot on the area you're in.

No time to point by point, i'll just say a few short bits:

1) Even the socialist success story nations like Norway and Australia have massive amounts of taxation. Proponents of socialism would say that the value the citizens of these countries get for the taxes they pay is worth it, but its really impossible to know that for two main reasons. First, we don't know how that money would have been recapitalized had the people the right to use it according to their desires. This is basic broken window fallacy stuff. Second, we don't know the value of the services provided by the government because it is impossible to know that without prices.

2) Government has to be a monstrous behemoth. There is overwhelming empirical evidence of this fact, and theory can explain it quite well by analyzing the warped incentive structure of politicians and their bureaucracies.

3) The cures to those diseases aren't adequately valued. If sub-saharan Africa weren't a giant financial aid sinkhole, it's people might have developed enough wealth by now that the cures to those diseases would be valued. It is a basic principle of economics that there are more goods to make and services to do than there are resources, labor, and time to make them. Prices and the profit-and-loss system are the best way to determine what gets done and what doesn't. Another broken window fallacy, if everyone in the world weren't being fleeced by their governments, there would probably be a lot more donations to charities meant to cure endemic African diseases. And people would be able to choose which one is doing the most effective work instead of relying on their government's aid program.

4) I doubt your healthcare system is free market if the private doctors are forced to accept government vouchers to provide care.

[wufwugy]

I completely agree it cannot be claimed without evidence that law enforcement reduces crime, despite the obvious intuitive notion, but neither can the opposite. That was my point.

To the claim that law enforcement reduces crime, it can be counter-claimed that certain effects would be seen. We can put this line of discourse to bed by this point IMO.

...for those who can afford it. Yes, perhaps. The adequate level of safety and its effectiveness should be determined using risk management, available resources and risk appetite.

One of the nifty things about economics is that the ability for people to afford things improves as markets improve. The political claim against this seems to be that wealth can be redistributed for better results. But that isn't supported by economic theory. Mandated redistribution has a dampening effect on the utility of those receiving benefits. It has an overall dampening effect of productivity and innovation, and presses costs higher than they otherwise would be.

Take clothing for example. It's easily an inviolable right. Everybody needs clothing. As things are today and have been for a while, the market has solved this problem. There is such an abundance of clothing that the poorest of the poor have wide selection. Contrast this to, say, education. Education (not necessarily schooling), is another inviolable right. But if we were to compare costs and benefits of our education systems (including Scandinavia), my initial ballpark estimate for how the costs compare would be on the order of $300 per t-shirt. Of course, we can't quantify the costs of the education system so easily, but that figure is probably low TBH. The amount of utility people get from the education system is abysmally tiny. The level of opportunity costs are staggeringly high. The social dysfunctions it causes are unconsidered (like how the subsidized system has created an entire subculture for teenagers that teaches them the opposite of what the world is like and promotes things like rebellion).

I disagree. Communism is/was dictatorship/oligarchy disguised as socialism. I don't expect to see a marxist utopia implemented anywhere anytime soon, but the soviet era was hardly a legit attempt at it.

Soviet communism was a pretty pure attempt at Marxism and socialism. The utter disaster of central command is why it went so badly. The USSR was ideologically and functionally very attuned to socialist philosophy. The thing is that today proponents of socialism don't know the history and have simply moved the goalposts. Of course this confusion is understandable since today socialism is defined as contradictory things. "Market socialism", where things like co-operative enterprise is supported is not socialism. It's standard market economics. "State ownership" is the socialism that was created by the fear of the perceived dangers of the market. It lost and was demonstrated wrong.

No they're not. Subscription fees and contract terms are mandatory if you want to stay with your provider.

Just like how payment at McDonald's is mandatory if you want to eat at McDonald's. This is a fundamental difference from taxation. The ability for other businesses to compete in subscriptions and contracts for whatever it is I am buying is a total game changer to how government works, where competition is illegal.

Which government can't? Universal healthcare, policing, education, housing, those are the norm in all of the Nordics and a bunch of other places. Give me one example where the free market has provided these to everyone, ever?

There are no examples. People love the state. We have only just begun the journey of seeing behind the curtains.

The Nordics don't do it well either. Open the borders and the whole thing collapses. Their states function the way they do because the populations are small and ubiquitous. The region is extremely protectionist and highly subsidized by the results of capital behavior from other regions too. Markets in Scandinavia would thrive on open borders, but the state welfare structure would collapse.

As for each thing you mentioned specifically:

Healthcare: the policies the US government had long before Obamacare (and still do after Obamacare) that have made healthcare too expensive for many are countless. I've gone over these several times in the past. If you would like to discuss them at greater detail, let me know. The main ones are licensing cronyism, pharmaceutical cronyism, business tax subsidization, and structural subsidization. These all make the cost of provision extremely high and the cost of purchase high as well. There is no known reason why healthcare would not operate the same as clothing if in a free market.

Policing: most crime is not stopped by the police, and most "criminals" are people who weren't doing anything wrong. Property ownership by the state and subsidization of poverty is the main source of crime in the first place. It's a shame that the only thing we've tried is state security forces, when it is such a disaster and we have reason to believe there is a much better way.

Education: already covered it. The institution is off the charts destructive, and I think we are never, ever going to realize it. I've wanted to make a gigantic post on the subject for a while now, but I keep avoiding it because it's a truly monstrous and misunderstood topic. It would be 100x easier to convince people that the government sucks than that subsidizing education sucks, and the former is hard enough.

Housing: the market has solved housing. Well, except for places owned by the government where poverty is subsidized and every regulation on the planet exists against housing.

Government workers are, believe it or not, mostly just regular people, and government jobs are not unlike any other.

Government workers are indeed just like normal people. I've argued that several times. But the jobs are not. Their incentives are fundamentally different than market incentives. There is irony in your argument here since the claim that government jobs are no different than market jobs contradicts the pro-state argument. If the jobs are indeed no different, then there is no value for the state over the market. But clearly you are arguing that there is, which means that you would need to claim that government jobs have a fundamentally superior incentive structure. That is an argument many have for the state, but it's not a new one. It makes the same mistake that is made in all those examples of bad authoritarian governments, that the moral incentive of bureaucracies is superior to the capital incentive of enterprise.

[wufwugy]

Sumner's post on the economic philosophy for the best tax structure.

http://www.themoneyillusion.com/?p=7091

[CoccoBill]

I'm in a hurry so just a couple quick comments.

1) Even the socialist success story nations like Norway and Australia have massive amounts of taxation. Proponents of socialism would say that the value the citizens of these countries get for the taxes they pay is worth it, but its really impossible to know that for two main reasons.

4) I doubt your healthcare system is free market if the private doctors are forced to accept government vouchers to provide care.

Again you and wuf argue about effectiveness, while my beef is with egalitarianism. Government can be effective enough in providing basic necessities, leave all else to free markets. The CoccoBill Doctrine.

4) The vouchers have a face value which is deducted from the fee the individual private clinic charges. Only clinics that have signed a contract to provide the service accept them.

To the claim that law enforcement reduces crime, it can be counter-claimed that certain effects would be seen. We can put this line of discourse to bed by this point IMO.

One of the nifty things about economics is that the ability for people to afford things improves as markets improve.

Take clothing for example. It's easily an inviolable right. Everybody needs clothing. As things are today and have been for a while, the market has solved this problem.

No it can't, due to the other affecting factors you mentioned.

That may be, but the point is not just to have more people afford it, or generate more overall wealth in the hands of few, but to provide it to everyone.

Re: clothing, I think you have the timeline wrong. Food, clothing, shelter etc were all free market solutions, until civilizations decided they need to be provide certain things for everyone, not just the healthy and able-bodied.

Thanks for the links, I'll check them later.

[CoccoBill]

Government workers are indeed just like normal people. I've argued that several times. But the jobs are not. Their incentives are fundamentally different than market incentives. There is irony in your argument here since the claim that government jobs are no different than market jobs contradicts the pro-state argument. If the jobs are indeed no different, then there is no value for the state over the market. But clearly you are arguing that there is, which means that you would need to claim that government jobs have a fundamentally superior incentive structure. That is an argument many have for the state, but it's not a new one. It makes the same mistake that is made in all those examples of bad authoritarian governments, that the moral incentive of bureaucracies is superior to the capital incentive of enterprise.

If a company's business strategy is to provide (e.g.) healthcare affordable to everyone, even those with no income, there would be no difference. The point is the market cannot guarantee the existence of such companies everywhere all of the time.

[wufwugy]

Just pointing out that I appreciate this dialogue.

Again you and wuf argue about effectiveness, while my beef is with egalitarianism. Government can be effective enough in providing basic necessities, leave all else to free markets. The CoccoBill Doctrine.

Effectiveness is the backbone of egalitarian outcomes. The choice isn't between effective policy and egalitarian policy, it's between effective policy and ineffective policy or effectively egalitarian policy and ineffectively egalitarian policy. This sounds like it's just semantics, but it's not. We can't have egalitarian outcomes unless we have effective policy. This dynamic is why we hear economists talk about efficiency so much. To the lay, that sounds like an abstraction unrelated to real-world results, but it's actually what creates the results. Economic rules don't change when governments engage. Renton and I keep talking about effectiveness because the only way to get effective outcomes under government is by adhering to the same principles that do it with markets.

I feel like I'm not explaining this well. Maybe Renton should do it since he's always good at that.

That may be, but the point is not just to have more people afford it, or generate more overall wealth in the hands of few, but to provide it to everyone.

Two things: (1) the line that wealth growth in markets results in too much wealth for a few and too little for the many is a myth. That's something the public talks about and the public believes, but economists don't. Their models and measurements don't behave like that. They'd have to throw intro to economics textbooks in the trash if they started making claims that growth in production or productivity unfairly benefit a few at the expense of many. One small example of this dynamic can be found in savings. Economists measure savings as delayed consumption. The public measures it as, um, I'm not quite sure, but something like hoarding and extraction of wealth from the economy. By the view you expressed, increased savings rates benefit the few at the expense of the many, but economists say otherwise.

(2) Markets are the infrastructure necessary for capital (capital means all productive capacity. Your ability to work is your human capital) to produce. Nobody has discovered economic rules that negate supply and demand. The USSR tried very hard. It stuck to non-market, pro-state egalitarian principles to an incredible degree. It didn't work. Everybody was poor as shit and few got what they needed. Markets have always been the mechanism that most benefits the poor, while government has done the opposite. I guess it could be said the main reason why this is is because the poor have marginal capital and markets are the only places the rules of supply and demand allow them to use that marginal capital to produce greater capital. Government intervention is double trouble on the issue because its regulations raise the costs to those wielding marginal capital (trapping them in poverty), and government is very effective at favoring special interests. There's no better way to entrench megacorporations than with government, and no better way to empower the little guy than with markets.

Re: clothing, I think you have the timeline wrong. Food, clothing, shelter etc were all free market solutions, until civilizations decided they need to be provide certain things for everyone, not just the healthy and able-bodied.

I'm not sure what you're saying here.

To be clear, it's revisionist history to claim that the state has had much of any role in creating abundance in food, clothing, and shelter.

[wufwugy]

If a company's business strategy is to provide (e.g.) healthcare affordable to everyone, even those with no income, there would be no difference. The point is the market cannot guarantee the existence of such companies everywhere all of the time.

Neither can government. Markets have proven to be far more effective at achieving egalitarian outcomes.

BTW, we are blessed that no/few companies give healthcare away for free. That would send incentives batty, and the rules of supply and demand would punish us all. Hell, we're already heavily punished by the distorted incentives from the government redistributive policies. It is bad, bad news for a society when entities receive more than their capital dictates they "should". Economics does not function the way we would like it to, but we can't change it.

Clothing donations to Africa have had a profoundly bad effect on Africa by destroying its textiles industry. We moralize that charity is a good, but all it does is change incentives in a way that reduces capital production. Economics does not care about our morals. The only way we can get the moral outcomes we want is by realizing this and adhering to economic rules best we can. Economics tells us that if we apply prices to all things, we can continue this rapid ascent of living standards.

One day when scarcity doesn't exist we can finally tell economics to fuck off. Until then, we can't.

[wufwugy]

Something I would like to add is that better and worse government policy exists. Sometimes it sounds like market proponents don't think that. I think the reason why is because we think that even the best government policy is nothing compared to a standard free market.

One example of better government policy than a current worse is if the US used education vouchers. Due to the large but poor intervention the government already has on education, it would be better to have "even more" intervention if it was smarter. This isn't something I want to argue for, but the reality of the matter is that the public at large adores the idea of government intervention into education, so we're never going to get that ultra-strong free market system and instead have to settle for one where the government does stuff like control costs while implementing some competitive incentives. Vouchers is better than the status quo but still worse than the market. The funny thing is that vouchers is better merely because it implements market-like tactics.

[wufwugy]

reading the slides to a recent caplan speech, found a quote i love:

"In politics, unlike markets, individuals with irrational beliefs suffer almost no negative blowback."

http://econfaculty.gmu.edu/bcaplan/greatsociety.pdf

[wufwugy]

We already hit this. This is circular, tautological, unfalsiable. You believe because you believe it. I don't believe it because of the wealth of evidence that comes from the behavioral economics side of things that puts people in situations where rational is very well defined and they don't behave that way.

Jackvance brought it up some time back and I'm glad someone else is aware that people just aren't rational in the least.

The foundations of every science is tautology and assumption.

Just like every science on the face of the planet, economics starts with a handful of unfalsifiable assumptions, and then works in the falsifiable in all the details. You are using "rational" in a non-economic sense, using this straw man to argue against rational choice theory.

Your line about JV says it all. Economists do not call the irrationality of behavior rational. Economists establish the assumption of rationality and what it means, and then work everything else imaginable in. Every science does this, without exception.

[a500lbgorilla]

The foundations of every science is tautology and assumption.

Just like every science on the face of the planet, economics starts with a handful of unfalsifiable assumptions, and then works in the falsifiable in all the details. You are using "rational" in a non-economic sense, using this straw man to argue against rational choice theory.

Your line about JV says it all. Economists do not call the irrationality of behavior rational. Economists establish the assumption of rationality and what it means, and then work everything else imaginable in. Every science does this, without exception.

Holy fuck no.

The foundation of every science is the scientific method. A method of guessing at a robust description of reality and testing that description against reality. For a long time, science has been built upon the idea of falsifiablility. If nothing can ever prove your theory wrong, you don't have a theory.

What are the tautological and un-falsifiable thoughts in Evolution? That the survivors survive? Not even that counts because the theory can describe why a brother might sacrifice for a sister. And evolution could be falsified if ever there was found an irreducibly complex organ.

Your beliefs of what consistutes science are way off.

[a500lbgorilla]

Your last paragraph is modelling, not science. Modelling is a tool used by science, but a science must use the scientific method. The only tool that can accurately craft assumptions to reality. We've talked about this before. Economics doesn't meet the mark on this. So while all the other kids at science school are running around building models with assumptions, Economics can't keep up because it doesn't have legs because a true science must stand on the scientific method.

[a500lbgorilla]

Fuck, science is so untautological it doesn't even hold "reality is reality" as a tautology. http://www.gizmag.com/3d-hologram-un...eriment/33546/

[wufwugy]

Holy fuck no.

The foundation of every science is the scientific method. A method of guessing at a robust description of reality and testing that description against reality. For a long time, science has been built upon the idea of falsifiablility. If nothing can ever prove your theory wrong, you don't have a theory.

What are the tautological and un-falsifiable thoughts in Evolution? That the survivors survive? Not even that counts because the theory can describe why a brother might sacrifice for a sister. And evolution could be falsified if ever there was found an irreducibly complex organ.

Your beliefs of what consistutes science are way off.

I'm happy you said this, because I think it cuts into the disconnect.

The scientific method is an assumption. When we strip away as many layers as we can get, we are left with something we cannot examine any deeper.

I am not educated enough on this to say exactly what and why, but one of the times I got the most schooled in an argument was against somebody who was. So I'll just pull some examples somebody gave from google search.

Mathematics is based on a number of assumptions. These are so simple that everybody agrees they have to be true. Some of the assumptions are things like 'if two things are each equal to a third thing, then they are equal to each other' and 'it is possible to draw a line between two points'.

Rational choice theory is an assumption at its core just like what every other branch of science has at their core assumptions. Just like how in math we assume it is possible to draw a line between two points, in economics, we assume the statement of rational choice theory: "wanting more rather than less of a good".

The overwhelming majority of economics deals with irrationality and behavior. "Rationality" is an assumption that best provides the starting point from which to apply the scientific method to everything else. It's just like how every science has at its core the assumption that numbers are things.

[a500lbgorilla]

Yes, but mathematics is not a science. Mathematics is logic which is tautological and assumption heavy and ideal and pure.

You can bring math in as the descriptor of a natural phenomenon and then test that descriptor through the experimental method. After the experiment is done, you'll either throw your mathematical descriptor away, tweak it, or say "well, it hasn't been shown wrong yet" and use it. But it's the scientific method that vets those things. It's reality returning back to you an answer. If you pose to it a statement which, no matter how reality acts, you will always walk away believing you're right, what are you really doing?

[a500lbgorilla]

And rationality is used in economics, in my opinion, because you can't possibly go forward without it. That's not a huge boon to its efficacy in creating results.

[a500lbgorilla]

And it's why I like Behavioral Economics. Because they look like their trying to model people first. How do they act, how do they choose and how can we model it?

Once you've got working models for people, then you'll be cooking with bacon.

[a500lbgorilla]

You know what, there is a great set of books which you might find interesting on the math and science relationship by Henri Poincare. Guy was considered the last man the understand the whole of human knowledge on math and science.

https://www.google.com/search?q=book...sm=93&ie=UTF-8

I read them years ago and I remember them being dated and very interesting. I took a lot away from them because I was already trained in a lot of the stuff he was covering (thermo, optics, mechanics, geometry, calculus, space. He hits it all).

Check out a pdf online and see if it floats for you. I enjoyed them because I was deep into the philosophy of science at the time.

I say it because now that I'm thinking on it, I'm pretty sure I draw a lot of my thinking from these books.

[wufwugy]

The scientific method is still an assumption.

This goes back to how we simply can't prove things.

Even if rational choice theory is wrong (it most assuredly is, just like how the best theories in other sciences are also wrong), any other counter assumption would be as well. Every use of the scientific method so far has backed the assumption embedded in rational choice theory. That's just not the end of the story.

The silly thing about all this is that it doesn't matter. When economists use the word "rationality", they do not mean it the way people do colloquially and they do not use it while precluding irrationality.

And it's why I like Behavioral Economics. Because they look like their trying to model people first. How do they act, how do they choose and how can we model it?

Economics is all about this. A lot of behavioral economics is specious at this point (Ariely is a psychologist, not economist). There is probably some value somewhere from bringing new perspectives. But it is not true that behavioralism in economics is new and unique. Nor is it true of experimentation.

[a500lbgorilla]

The scientific method is still an assumption.

This goes back to how we simply can't prove things.

Even if rational choice theory is wrong (it most assuredly is, just like how the best theories in other sciences are also wrong), any other counter assumption would be as well. Every use of the scientific method so far has backed the assumption embedded in rational choice theory. That's just not the end of the story.

The silly thing about all this is that it doesn't matter. When economists use the word "rationality", they do not mean it the way people do colloquially and they do not use it while precluding irrationality.



Economics is all about this. A lot of behavioral economics is specious at this point (Ariely is a psychologist, not economist). There is probably some value somewhere from bringing new perspectives. But it is not true that behavioralism in economics is new and unique. Nor is it true of experimentation.

Because its tautological. No human action can ever escape the description, "well, he was maximizing SOMETHING!"

[a500lbgorilla]

And what do you mean by the scientific method is an assumption?

It's just a tool to better describe Nature.

[a500lbgorilla]

The assumptions I can think of are:

When Nature disagrees with your description, it's wrong. When Nature agrees with your description, it's not yet wrong. Forcing your description to make a novel prediction of Nature and then testing that prediction though Nature forces Nature to either agree or disagree with your description.

[wufwugy]

Because its tautological. No human action can ever escape the description, "well, he was maximizing SOMETHING!"

I meant it similarly to how every use of the scientific method has backed the existence of gravity, but we still have to assume all sorts of things to take calculations using gravity as veracious

And what do you mean by the scientific method is an assumption?

That it's a sound tool is an assumption. We can't prove the veracity of the scientific method even though every ounce of evidence we have supports that stance. We can't even prove the veracity of evidence, or the veracity of the idea of veracity. No matter how many layers are cut away, there is still that one layer that we have to assume.

It should also be noted that it's not unreasonable to assume it could be true that the scientific method is not sound for all things in existence. It could be the case that something can be true but not measurable or repeatable, for example.

[a500lbgorilla]

Gravity is a special story. When Newton proposed the theory of gravity, the scientists were looking for a way to prove it. Someone had the thought to use the four visible moons of Jupiter. They set about predicting the positions of the moons at a specific hour only for them to discover they weren't precisely there! Nature had disagreed with Newton's gravity! Except that someone postulated that the reason for the error was because the speed of light is finite and the Jupiter they saw was 8 minutes earlier than the Jupiter they calculated!

SO MANY ASSUMPTIONS!

edit I hope I didn't make that up. I swear I read that somewhere.

[a500lbgorilla]

"As science developed and measurements were made more accurate, the tests of Newton’s Law became more stringent, and the first careful tests involved the moons of Jupiter. By accurate observations of the way they went around over long periods of time one could check that everything was according to Newton, and it turned out to be not the case. The moons of Jupiter appeared to get sometimes eight minutes ahead of time and sometimes eight minutes behind time, where the time is the calculated value according to Newton’s Laws. It was noticed that they were ahead of schedule when Jupiter was close to the earth and behind schedule when it was far away, a rather odd circumstance. Mr Roemer, having confidence in the Law of Gravitation, came to the interesting conclusion that it takes light some time to travel from the moons of Jupiter to the earth, and what we are looking at when we see the moons is not how they are now but how they were the time ago it took the light to get here. When Jupiter is near us it takes less time for the light to come, and when Jupiter is farther from us it takes longer time, so Roemer had to correct the observations for the differences in time and by the fact that they were this much early or that much late. In this way he was able to determine the velocity of light.This was the first demonstration that light was not an instantaneously propagating material."

Richard Feynman

[a500lbgorilla]

Listen to the story. Listen to how discoveries precede theories and experiments prove them. This is a story I see when I'm looking at good science. Neuroanatomy, Evolution, Elastics... Never Economics.

There is no set of discoveries that leads to the rational actor. No, everyone just agreed it was perfectly acceptable and that was that.

[a500lbgorilla]

Inertia is a good foil for rationality. Both look, at first glance, like tautological assumptions. One was preceded by experiment and observation, the other was used to move forward in analysis.

[wufwugy]

No, everyone just agreed it was perfectly acceptable and that was that.

You're right. Thousands upon thousands of PhD's who have dedicated their lives to this discipline are wrong.

Feynman is wrong because of something I learned in gen chem. Never mind that I was taught what I learned was technically wrong and never mind that if I had undergone further instruction I would have learned why.

[a500lbgorilla]

Scientists argued against evolution.

[a500lbgorilla]

http://et.worldeconomicsassociation....odgson_1_1.pdf

I delighted at the second section "Fitting everything and explaining nothing"

[wufwugy]

Scientists argued against evolution.

This means people with no credibility in economics can argue against economists how?

[a500lbgorilla]

This means people with no credibility in economics can argue against economists how?

It means that experts can be wrong. It takes Nature to step in and settle the debate.

"A scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die and a new generation grows up that is familiar with it." Max Planck

An economic truth, however, comes down to everyone nodding their heads.

[wufwugy]

It means that experts can be wrong.

Which you are not. The paper you even cited doesn't contest rational choice theory, but its limit in explanation of the world. I have always agreed with that and so do economists. It just happens that every time we talk about economics, somebody who is not an economist says "but people aren't rational", fulfilling the prophecy that laymen misunderstand the concept.

[a500lbgorilla]

"The value of rational choice theory for the social sciences has long been contested. It is argued here that, in thedebate over its role, it is necessary to distinguish between claims that people maximise manifest payoffs, and claimsthat people maximise their utility. The former version has been falsified. The latter is unfalsifiable, because utilitycannot be observed. In principle, utility maximisation can be adapted to fit any form of behaviour, including thebehaviour of non-human organisms. Allegedly ‘inconsistent’ behaviour is also impossible to establish withoutqualification. This utility-maximising version of rational choice theory has the character of a universal ‘explanation’that can be made to ‘fit’ any set of events. This is a sign of weakness rather than strength. In its excessive quest forgenerality, utility-maximising rational choice theory fails to focus on the historically and geographically specificfeatures of socio-economic systems. As long as such theory is confined to ahistorical generalities, then it will remainhighly limited in dealing with the real world. Instead we have to consider the real social and psychologicaldeterminants of human behaviour."

This was always my point. It's either wrong or unfalsifiable. Both are bad. You then wanted to talk about how all science was the same shade of bad, and I am here to help separate you from that notion.

If you want to return to rational choice theory that's both wrong and bad, why do they choose to use it? My answer, because they have to. The problems they tackle are entirely too complex even WITH this simplifying assumption.

The next question is how can you trust the results of a model that uses a bad and wrong assumption at its core? You wanted to talk about how science does the same, and I'm here to happily separate you from this idea.

Between these few things, I am quite comfortable saying that I'm skeptical of Economics.

[wufwugy]

Keep crushing those straw men. Keep playing creationist.

You're not expressing anything economists don't already know yet you're pretending they don't know them and you're using this false position to denounce them.

[JKDS]

I dont have any strong feelings towards believing economists or not.

But I've never been convinced to do so by anything on here, and dont have the time to learn elsewhere. So I end up settling on Rilla's side of the fence.

I feel like thats understandable, since one thing Experts struggle to do is accurately dumb things down for laypeeps.

Also, Thinking Fast and Slow was a really good book. A pain to read, but a good book. I need to dissect it and start using it to get favorable verdicts.

[wufwugy]

Quote from Steve Forbes:

"Free markets are quite the opposite. They bring about cooperation, they break down barriers, they succeed by meeting the needs and wants of others. You may not love your neighbor but you want to sell to your neighbor."

Therein lies the reason markets are a more effective and compassionate organizing principle than government. With government, even democratic government, if you don't like your neighbor, you make or support laws regarding your neighbor. But when people do not have a legal violence monopoly, when the primary power people have is their capital and their choices, if you don't like your neighbor you still have a self-interest in cooperating with and benefiting your neighbor.

This is why the drug war exists exclusively because legal violence monopolies exist. Enough people do not like drugs and they use their monopoly power to create laws around them, laws that cannot be subverted without consequences of cruel punishment. But without this monopoly power, people who do not like drugs can only stop themselves from using drugs or influence people to not use drugs, and they STILL have an obligation to their own self-interest in not mistreating those who disagree with them. The contrast to government couldn't be more severe. The primary self-interest when mandates have primary power is to harm your neighbor if you do not like him and are affected by him. Name the million different laws that exist for this purpose. Government creates defiance, markets create negotiation.

The inherent nature of monopolies is to cause harm in pursuit of self-interest. The inherent nature of markets is to create benefit in pursuit of self-interest.

[wufwugy]

A world without government would not be a world without law. Instead of the coercive and irresponsible legal system we have today, law would instead be a negotiation between affected parties. It would be about a million times cheaper since it would be consumed like insurance.

Today, if you get in trouble with the law, it mostly doesn't matter if the law was wrong or if you are mistreated. There is just one arbiter and that arbiter cannot be second-guessed. It can only be massaged, which is basically the job description of the law profession. There is technically no negotiation of law, but lawyers and jurists influence interpretation of the governmental mandate.

Contrast this to a law market where there are no mandated arbiters and all revenues supporting law come through choice (mostly through insurance premiums, but not always). We'd pay a few hundred bucks a month for a company that represents our values, what we most think the legal society we want to live in is, AND that company is also our representative whenever we come to a dispute with somebody else. It doesn't matter if the dispute is because we killed somebody or because we dumped some shit on somebody's property. Our law/insurance company is beholden to its customers to uphold its own policies to the best of its abilities. Likewise, if the plaintiff who brought charges against us is insured by a different company, that company has the same obligation.

So, if we're charged with murder by the plaintiff's company, our company has an imperative to defend us. If it does not, it will lose customers. However, if our company determines that we did in fact murder and were not justified, it has an obligation to not let us off the hook since it would also lose consumers who are wholly uninterested in supporting a legal company that says murder is okay. Likewise, the other company would have the greatest incentive to make sure we're not off the hook since its customers pay for policies that make unjustified homicide wrong and punishable.

This entire process is a negotiation between the affected parties. Both law insurance companies would negotiate with each other to come to terms that best upholds the policies that their customers pay for. This would simply result in an incredibly fair legal system. Justice and corrections policies would reflect as much of what people want as is realistically possible.

[JKDS]

There are so many assumptions to that, but I feel like we'd just be rehashing the same old points again and again.

I understand where this theory comes from. I've seen some of the papers promoting it. But it defies actual perception.

Example:

"...company has an imperative to defend us. If it does not, it will lose customers."

This is probably false, and the REVERSE is probably true. I know that seems illogical, but thats how people are. Few people see themselves as a "criminal", and they rarely try and put themselves in the defendant's shoes. What actually happens is far from supporting public defenders for protecting a defendants rights; instead its the issuing of death threats and the harrassment of not only witnesses, but the defender's family as well. Oddly enough, most people HATE criminals. And assume you are a criminal if you are brought into court.

So when you argue that a company will lose customers for not defending someone, or for defending someone poorly, I'm not convinced. In fact, a successful defense could cost them millions of customers, as they earn a reputation for "helping badguys".

Different example; no one cares that products are made in china through child labor. No one cares about blood diamonds. More on point, no one cares about the rights of people in prison (you should see some of the comments on articles of prison hunger strikes)

But it doesnt stop there. We're in the commercial world, so even assuming dropping defendants or poorly defending them was bad for business, that doesnt really mean much. Through advertising, they could create a larger demand; or cloud the issue of the 'bad business practice'.

Theres a million more problems, but im bar studying atm.
------

Last point: We currently live in a pretty good system. Even children understand our system of checks and balances, no matter how flawed they might be. When something breaks, we know what to do to fix it (go to court, petition congressman, etc). Theres a simplicity there that makes things easy, even if they arent so great right now.

Any system of governing (or whatever) that seeks to replace this system has its work cut out for it. Its not enough to say "other systems can work". Of course they could. The question is whether they'd work better, but to do that you have to build more than the airy concept that the economists currently have.

[wufwugy]

"...company has an imperative to defend us. If it does not, it will lose customers."

This is probably false, and the REVERSE is probably true. I know that seems illogical, but thats how people are. Few people see themselves as a "criminal", and they rarely try and put themselves in the defendant's shoes. What actually happens is far from supporting public defenders for protecting a defendants rights; instead its the issuing of death threats and the harrassment of not only witnesses, but the defender's family as well. Oddly enough, most people HATE criminals. And assume you are a criminal if you are brought into court.

So when you argue that a company will lose customers for not defending someone, or for defending someone poorly, I'm not convinced. In fact, a successful defense could cost them millions of customers, as they earn a reputation for "helping badguys".

This is a really strong point. However, I disagree with it.

The frame we use currently does not fit. For example, you say "successful defense" of a guy who did wrong would cost millions, but there wouldn't be "successful defenses" since the proceedings would be business negotiations. There would be no defenses, instead there would be deals. Each company would pursue the deal that best benefits their business, which by extension is the one that best benefits their customers. The particular customer in the hot seat would have to be perceived as getting as fair a deal as he deserves, otherwise the customers get angry and leave. The values of the customers would closely align with how they would perceive the one in the hot seat. Most of what we do on a regular basis already works like this. If there was a perception that customers at McDonald's have much of a risk not "getting what they deserve", there would be mass exodus to other fast food chains. It's partly because of this that when we buy things, we actually have a pretty strong assumption that we're getting a product which we value.

Let's use the most controversial example we can: George Zimmerman. He would have bought a law policy that greatly favors the belief in self-defense because that was the type of policy that is most relevant to him. Others who buy the policies from the same company would have the same values. Keep in mind that Zimmerman was only "convicted in public opinion" from those who do not value the concept of self-defense like the average gun carrier. So, Zimmerman's hypothetical company would have a high incentive to demonstrate Zimmerman's innocence by way of self-defense. However, if he was not indeed innocent, then the company also has a high incentive to not still push for his innocence since the other purchasers of their policies support self-defense, not murder.

If Martin was insured by a company that didn't believe in self-defense or guns, it would be doing all it could to please its customers by getting a deal that favors that position the most. In this scenario, the prosecution is Martin's company, the defendant is Zimmerman's company, and the arbitration is the deal they can come to. That decision would be most fair to Zimmerman and Martin because the companies would each have the highest incentive to get the best deal, and a big reason they would do that is for the truth to be found. Additionally, Martin's company would have an incredible incentive to get major consequences for Zimmerman if it was found that Zimmerman murdered. So much so that both companies would weigh their options and come to a deal. The deal would involve Zimmerman's company giving in a ton while Martin's would not. This system isn't remotely perfect, but I think it is far more functional.

I hope I addressed your concern. If I didn't let me know, because it is an academically powerful one that would blow a hole in my theory if true. I *think* this addresses your claim that companies would lose their incentives to do the right thing due to public opinion not supporting that. I think opinions would support it due to the networking of why people buy their policies. Also people would have a much greater incentive to not have frivolous opinions since their safety is their own responsibility. I think we already see a dissolution of your point in our trial-by-jury. Public opinion is shit partly because they're allowed to be since the public has no responsibility on the matter. Jurists are no different than members of the public, but they have responsibility and clearly they do a much better job of it. Granted, the dynamic wouldn't work the same in a market, but it shows that public perception isn't so cut and dried.

Different example; no one cares that products are made in china through child labor. No one cares about blood diamonds. More on point, no one cares about the rights of people in prison (you should see some of the comments on articles of prison hunger strikes)

I wouldn't say that. Many people do care, but are instead relatively powerless to change them. The cost of fairness is way too high. Which is why a law market would make it more cost-effective for the poorest. I think the costs would drop by several magnitudes. Today, to get the type of representation people "deserve" costs hundreds of thousands. This includes all the taxes used for the system and what we all have to pay for good lawyers. But a market system would bring costs down so low that our full protection and counsel would come at a low and competitive rate.

Also, what you're describing about what people "don't care about" is an argument against the current system and the government. The state is supposed to care about this stuff, but it doesn't. In a legal market, the least powerful would have capacity to be treated fairly, but in our monopoly system, the law reflects the demand of the more powerful.

But it doesnt stop there. We're in the commercial world, so even assuming dropping defendants or poorly defending them was bad for business, that doesnt really mean much. Through advertising, they could create a larger demand; or cloud the issue of the 'bad business practice'.

I don't agree. Companies don't really get away with this stuff and they don't try it much. Take the food industry for example, no segment of it has somehow convinced people to consume food they do not like. For every company that would try it, there's another company saying "Aha look at this dickhead feeding you shit you don't want. Come over here and get what you want!" When that is the guy feeding you shit, there is another competitor trying to show you. Plus you don't really get fed shit in the first place since you have taste buds.

Last point: We currently live in a pretty good system.

Honestly I disagree. We live in a system that is better than most other attempts, but that doesn't make it good. To call this one good, we have to justify the vast amounts of mistreatment it dispenses. How many millions have been cruelly abused for smoking weed? That is just one example of the many, but it's enough for me to put up my hands and say "Hold on here. How can we royally fuck MILLIONS and say we're doing good?"

Taking your point, I think the system is not dreadful and better than many others. And I think it's worth being a part of since, well, it is the only and best that we have. What I would like is a system that more effectively operates on choice so we can get a better system.

Any system of governing (or whatever) that seeks to replace this system has its work cut out for it. Its not enough to say "other systems can work". Of course they could. The question is whether they'd work better, but to do that you have to build more than the airy concept that the economists currently have.

If all I thought was that markets just could work, I wouldn't care about them that much. I believe that markets have proven their effectiveness and resilience to a far greater degree than is reasonably necessary to start implementing them in every way we possibly can. I think a legal market would work substantially better than our current system or for that matter any monopoly system.

Being completely honest, I think that a law market would function as well as the food market. I think the current legal monopoly functions about 100x worse than the current food market.*


* Scratch that. The legal monopoly functions infinity factorial times worse than the food market. No time for hyperbole here.

[wufwugy]

All it took for the new CrashCourse economics series to dunk its head into entirely not-economics ideology was three episodes. Honestly I'm a little impressed it took that long, given the CrashCourse audience and the credentials of the hosts.

I know MMM expressed interest in the CrashCourse series. Just watch LearnLiberty instead. Loads of economics PhDs on there. Shorter videos too.