What services would the perfect government provide?
Lots of hackers are libertarians, because there is a lot of logic behind the free market. But I think it's a terrible idea to let the free market handle absolutely everything, as advocated by some libertarians. Free education is a great thing that society offers even if the system isn't perfect. The free market has completely failed with healthcare in the USA. We need police and fire protection. I'm glad that every road isn't a toll road.
Imagine an economically very free society with an average taxrate of 25%. What services should this government provide for free or subsidize?
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[ 14.7 ms ] story [ 560 ms ] threadI think government should provide our National Defense, the Justice System, and Police.
Plus, a doctor can't do X-Rays at your house or use his fancy gear.
There also need to be some regulation of how individuals use 'commons' like air, water, electromagnetic and sonic spectra etc., as well as land use rules, to avoid one person land locking others, parking their mile long yacht alongside Golden Gate Bridge, blocking bay entry, and such.
Some minimum levels of diplomacy, aimed at providing Americans, both individuals and organizations, 'fair and reasonable' treatment abroad would be nice, as well, especially if backed by military muscle.
I'm sure there is more, but those are the ones I can think of right now.
The only counterbalance to this right now is admins killing topics. Doing that after a story has generated a lively discussion like this one might cause users to revolt.
Who cares about a "user revolt"? This site has a focus and that's what makes it great. Those people can discuss this stuff a million other places. There's only one place for hacker news.
A counterbalance to this sort of thing that works is a community action, not an admin action.
A one way to implement the community action is to add downarrows. But when someone downvotes a story, the story karma is unaffected. It's only when the story has more downvotes than upvotes that the editors get the option to kill that topic. So that way, the community has decided something is offtopic, but the editor still uses his good judgment about killing a story. I don't see how users could get upset under that sort of arrangement.
reddit.com
The problem is that the average quality of the politics discussions so far is much lower than that about startups. It's not "hacker-worthy".
Social news has been around for two years. Giving one example doesn't mean a whole lot, especially when the community of reddit is fundamentally different from the community of news.ycombinator. The editors of reddit believe in non-intervention. The editors of news.yc believe in active and regular intervention, which means that news.yc won't turn into reddit.
The discussion in this thread isn't anywhere close to what you see on reddit. We have a problem when discussions start actually polluting the site. But they haven't yet, so I don't understand what the problem is.
We need to consider exactly what we don't want to allow on this site. See my new thread.
(And where did you get the entire that free education means government education? There have been free schools in America since before there was a country called "America.")
Second of all, an economically free society would likely have taxes nowhere near 25%. That's higher than Hong Kong's income tax today, and much higher than America's income tax when income tax was legalized.
I've decided that the bare minimum of government that must be had are the courts (and the power to enforce their rulings). A libertarian society will be highly dependent on contracts; society could not function if you knew a powerful client could refuse to pay and ignore court rulings. I have trouble visualizing a fair, for-profit court system. If competing court systems exist, then how is the court system for a case chosen? Presumably, it would be spelled out in the contract, which gives a perpetual advantage to the vendor. Of course, the buyer could ignore the summons, but said court could force him to arrive and would then rule that it was justified doing so (as it was).
Everything that is not a court can belong to the free market, but that does not mean should. For example, you could purchase the privilege to drive on one company's network of roads, but, barring some major advances in scanning technology and some means of stopping trespassers, the need to enforce that only paid cars use the road would be extraordinarily cumbersome. The best private road system I could see would be to have a monopoly on roads in every region; road companies could then make deals with neighbors for interregional traffic and coerce developments into requiring residents to pay the road company, at the risk of having the road company block access to the development. However, I'm not sure I can trust a private monopoly more than a government monopoly.
Law enforcement is also a good candidate for government control; however, private police forces are not out of the question. There would probably be less overhead to hire police to protect an area rather than individuals, so police might not necessarily turn a blind eye to a homeless man getting mugged (not to mention that said criminal should be caught for the same reason Animal Control kills animals becoming accustomed to attacking humans). However, a system where every five feet is patrolled by a police force with different opinions of what an arrestable offense is is hardly ideal.
Fire protection, another commonly cited candidate for government control, could actually work pretty well privately. A computer can easily check whether a certain building is protected, and the benefits of competition will result. However, one problem is that a fire on an unprotected building endangers adjacent buildings.
The 25% number is completely arbitrary. I picked a number that is lower than what I pay today and gives the government a whole lot to play with. There's a good chance we'd be better off with a sales tax or transaction tax instead of an income tax, but it's not important for deciding what services the government should provide.
Also, isn't is a bit ridiculous to call government schooling a success? It's failing in a wide variety of practical ways quite apart from any philosophical objection to the government deciding which ideas our kids are supposed to learn.
You may currently be spending more than $1400 to the government to pay for government roads. With competitive incentives in road placement and size, you might save more than enough time to offset the transaction costs.
Roads are a high-fixed-cost-low-variable-cost industry. I posted on these at Reddit - http://reddit.com/info/2fquz/comments/c2fttk. Everything that's wrong with airlines will go wrong with roads, and more. I suspect that you'll see massive overinvestment in roads as road companies try to capture market share, then the huge number of intersections (all toll, remember?) will reduce driving efficiency.
Free markets solve a lot of things, but they don't solve everything. There's no magic wand that makes them more efficient than a public solution. There are, however, a series of incentives and information-transmission mechanisms that usually give a free-market operator an information advantage over a public operator, hence letting them produce more efficiently. If the incentives point in the wrong direction, though, you get less efficient production.
Similarly for another high fixed cost industry which you cite - telecommunications.
Free markets might not solve everything, but they're almost always better than the alternatives. As examples of the alternatives, consider the postal service, government-run schools, Medicare and welfare.
Another option is a monthly subscription fee for unlimited access to all roads a company owns. If there are a small number of large companies this might be convenient. And don't complain about fear of monopoly -- the alternative is a total government monopoly.
There are various possible ways the road use for subscribers only might be enforced. Offhand, none sound especially convenient. But they all sound better than the status quo: all people in the area are counted as "subscribers", even if they don't own a car, and are all billed, and this is backed up with guns. That's worse than any of the non-ideal enforcement mechanisms I can imagine. And while it may save a bit on transaction costs, it does that by not even trying to differentiate a subscriber from a non-subscriber.
You don't seem to be considering a couple of things:
The "backed up by guns" (if you want to have a serious discussion, these sorts of libertarian cliches could perhaps be checked at the door) tax funded roads have benefits that extend beyond the road users. "Externalities" as it were, in terms of lower prices for goods that are easily and quickly shipped to the area, competition for other modes of transportation, and perhaps jobs in sectors like tourism.
If, ignoring the externalities, you wish to more directly attach the costs to the people utilizing the roads, you could raise gas taxes. Of course, that has its own positive and negative aspects, and winners and losers.
The real world is tremendously complicated, and I don't think it's really possible to predict everything. However, I don't think that means that you can simply ignore some of the more interesting facets of economics and say "errr, just let the market take care of it" - it's just too simplistic.
"When schoolchildren start paying union dues, that's when I'll start representing the interests of schoolchildren."
-- The late Albert Shanker, former president of the American Federation of Teachers, 1985
I'd prefer to let parents decide how best to educate their children. The entire system shouldn't be designed to accommodate the outlying parents you fear who don't care about their kids.
I think this is a step backwards. In the USA we have moved away from Who Should Rule? and Which Ideas Should Rule? and the focus is more on how should disputes be decided. Force is not a rational answer to that, and we have embodied this in our tolerance for queer and strange people/ideas, even disagreeable ones. The main feature of our system of Government is also about how disputes should be decided: it is responsive to changes in opinion of our citizens (via voting): when many people change their minds about an issue the government is changed correspondingly -- even about basic education. So disputes can be decided by persuasion instead of force.
It's worth noting that basic math or reading education are not presently required in some States, so requiring them would reduce freedom of choice relative to real life today. For example, in Kansas, there are essentially no requirements for home schoolers, including no record keeping, testing, or required subjects. http://www.hslda.org/laws/default.asp?State=KS
Math is a fundamental truth of the universe. I don't think any argument exists against the required teaching of these two subjects, other than stating libertarianism is always better.
If I was the dictator of the USA (or Equatorial Guinea), I wouldn't actually write the curriculum myself and force it on everyone. I'd get a board of experts and outsiders with qualified opinions to write it. Then the people would pass it by referendum, to give them that nice illusion of choice.
Two competing schools of thought about how to treat the best ideas we have today -- the ones we feel most certain of, and have the hardest time imagining a reasonable person could dispute -- we might call the School of Certainty and the School of Fallibility. The first believes our best ideas are the ultimate truth and wishes to set up societal institutions which best embody those truths. The second believes that it is important to remember we might be wrong and our vision is limited, so we should set up institutions with a focus on error correction, which means openness to new ideas and approaches, tolerance of differences, and not using force in the name of sanctioned ideas. The first school is more concerned with creating a good society by present day standards. The second is more concerned with creating a free society where people live by their own standards.
The School of Fallibility is often ridiculed. Certainly we aren't all wrong about common sense opinion X, it's so obvious. Why do we have to be so careful and cautious about even the most basic things? That's a lot of wasted effort, and it allows people to make huge, unnecessary mistakes and ruin their lives.
We live in a period of rapid change. Many mainstream, traditional, long held, obvious, common sense opinions have been thrown out in the last century. This story is well known for science, and civil rights and many other issues. But still people are complacent. We changed. We got better. What remains obvious today must be even more certain.
So, rms, perhaps I can surprise you away from complacent certainty by presenting an argument which you did not think existed.
I know a lot of people who don't like math, and who actively avoid using it in their lives. One can have a successful life today even in the extreme case of irrationally avoiding all math. Consider the adults today who dislike and avoid math: forcing childhood math lessons on them did not turn out to have helped. Now they have a grudge against the subject fueled by deeply unpleasant memories. It's harder for them to actually learn math now, should they find a use for it. Therefore it would be better not to require math lessons, and instead to let people learn it themselves on their own initiative if/when they find a reason to want to. We might call this approach Just In Time Learning.
I would be curious to hear your examples of someone leading a successful life while irrationally avoiding all math.
Perhaps you will reply they at least need to be able to count to 4 to hand back the right number of each coin. And need to be able to read numbers to answer questions like, "What does the Super Mushroom Burger cost?"
But the blatant usefulness of a skill is no argument in favor of required education of it -- won't people want to learn it voluntarily? And those who disagree, why can't you leave them alone?
The people that own them don't really care that much, because they get their money just the same, and since they have a monopoly, they don't have any real competition unless you take the train or a plane, which simply isn't possible in many cases.
Intellectual property rights preventing reuse of famous three-letter logins by people without those initials?
1) Emergency services. These are things you don't really have time to negotiate price on or do research for. Police, national defense, fire and rescue, emergency medical. These should be handled by the government because otherwise you could maximize your economic gain by taking advantage of those in duress. "Your house is burning down and your daughter is still inside. Sign here and agree to pay us $250,000 and we'll go get her."
2) Infrastructure, The government should own and operate various infrastructures and provide rules and regulations for common use. Roads are a great example of this as are the majority of airports. Another I would love to see is 'bandwidth'. Have to government own the fiber that connects my house to a central point. Then allow me to select any ISP and/or service that can be delivered over that line. Ask yourself how much cheaper and better your internet connection would be if more players than just Comcast could use your cable line, and Verison had competition on its dsl service.
The reason I believe governments should look after these types of services is that they can afford to make the capital heavy investments needed to provide it, as well as provide a neutral platform for capitalist enterprises to compete over and provide greater value. I also tend to put education here.
3) Public trusts. This has no real economic value, but I don't really trust Haliburton with proper management of parkland or the like. Things with both a very high monetary value and societal value should not be trusted to an enterprise with a profit motive.
What's the incentive for them to provide more, particularly since fiber lines usually cut across constituent boundaries, yet don't cut far enough to make a majority in Congress?
Since I'm not a USian, I don't know what to make of your arguments about congress and the like, but it worked out fine here in the past.
I live in Alberta and up until a few years ago the telecom was owned and operated by the provincial government. It dropped copper to every house. I don't see why fiber would be any different. Some provinces still run their own telecoms.
One of the reasons we've got YouTube was that private fiberoptic companies (stupidly) overinvested in laying new fiber cables during the dot-com boom. When the crash came, the price of bandwidth fell through the floor. Then it became economical to build video-sharing services and AJAX webapps and other high-bandwidth apps.
In the U.S, our electrical grid is a regulated monopoly - not quite government owned, but it functions effectively like it is. A couple years ago we had a huge problem with blackouts and brownouts and a general lack of electrical power. All the spare capacity in the grid had been used up, and nobody had an incentive to build more. I worry that government-owned bandwidth will result in the same problem.
But shouldn't the government only be concerned with providing a usable signal? If you want a fast signal, then leave that to private enterprise. You can pay them for a faster connection, and they can pay the government to upgrade the infrastructure in a particular area.
Free markets work when they transmit information with each transaction. When a factory owner raises his prices to cover rising costs, he's encapsulating information about everything that's happened further up the value chain. When a shopkeeper lowers the price he's willing to pay, he's encapsulating information about consumer demand and everything downstream in the value chain. If a new means of production becomes available that's more efficient than the old one, there's a profit opportunity available for the aspiring entrepreneur. And everybody has an incentive to pass on correct information, because otherwise it's their own bank account that will suffer. This appears to be the only way to organize an economy efficiently.
Free markets fail when transactions conceal information. For example, many subprime loans were made to people who had no conceivable way of paying them off, but mortgage brokers had every incentive to hide that information from the hedge funds who bought them, and didn't have to shoulder the risk of default themselves. Health-care patients have no way of knowing whether a particular procedure is medically necessary and no incentive to find out, because the insurance company pays for it. Microsoft customers had no way of knowing whether Windows is the best OS, because there were no alternatives (well, except Apple and Linux...pretend this is 1997 or so).
There's also the issue of transaction costs - it costs nearly as much money to collect tolls as it does to just build the damn highway, so the "information" that the customer sees is heavily distorted by the process of having to collect that information.
So, based on this, I can derive some general principles for the role of government:
1.) It should provide the institutional framework necessary for the market to function at all, eg. contract laws and defense.
2.) It should rectify the "lemon problem", where sellers conceal vital information from buyers or vice-versa, eg. consumer protection laws, implied warranties, truth-in-advertising laws, full disclosure on mortgages, SEC regulation, etc.
3.) It should prevent companies from leveraging a monopoly to enter a market.
4.) It should rectify externalities, where a firm takes something of value to others but doesn't pay for it, usually because it's too difficult to arrange a transaction. The classic example is pollution.
5.) It should provide goods and services where the transaction cost of attempting to measure and restrict usage is greater than the actual value of the service. Markets will never develop in these areas otherwise. A good example would be roads.
Some concrete examples, which'll probably seem kinda out-there:
To start, I wouldn't have any taxes at all. Instead, the government owns all land, and raises revenue by auctioning off leases on land, natural resources, and pollution credits. These leases would be tradable, subdividable securities, and would be subject to normal SEC prohibitions on disclosure and insider trading. If you wanted to construct a skyscraper that you expect to last 50 years, you'd buy a 50-year lease on the land. If you ended up selling it after 20, you could sell the lease on the open market, but the land itself would revert back to the government after another 30 years. The government can also buy the lease back by paying market rates.
This helps the externality problem, because every time the voters want to prevent something like a polluting factory, they have the legal ability to, but they also have a precise dollar figure for how much it'll cost, in economic terms. If people don't want oil companies to drill in the Arctic National Wildlife Refuge, they can simply block the lease on drilling rights, but it will cost them a few billion dollars. Then they can decide whether ...
An unwed mother has a six year old boy that is only a burden to her. She doesn't care about her son's future so she's not going to spend her hard earned money on sending him to school. He goes to the free schools for the two years it takes to learn how to read.
What happens next? The mother isn't going to take out a loan to pay for her son's education. Does this eight year old have to decide if he wants to take out loans to keep going to school? I don't think many economically oppressed eight year olds would make the right decision.
But primary school should teach things necessary to evaluate the claims of others, not to prepare you for the working world, however. Reading, writing, and rithmetic are obvious ones. But instead of branching off into algebra/biology/geology/etc, I think they should teach probability & statistics, economics and finance, the scientific method in general (with the emphasis on the process, not on the findings), and a lot of history.
I agree with point 1). I think most people do, other than Somali Warlords and their like.
I think what you are trying to solve with 2) is better left to individuals. There will never be any surefire way of deciding what information is 'vital', is included in 'full disclosure' etc. Laws as vague as these always, in practice, degenerate to my-lawyer-is better-than-yours, jury shopping and other pathologies. Absent such laws, there is no reason why, for example, some form of 'standardized' contract for the most common transactions won't be written. These contracts have the advantage of being standard, widely used, and hence come with predictable legal precedent. And they are optional, so not everyone have to use them all the time.
Another problem is that such regulations tend to render a seller's efforts to build a reputation less valuable. A seller who has carefully cultivated a great reputation amongst an audience, can no longer benefit competitively by giving his 'word'. Instead he is subject to the same consumer protection laws as any random huckster, with the same cost of compliance. This leads to less incentive for him not to just act like a huckster in the first place.
3) The only 'monopolies' that can develop in a free world are those that are enforced by government, and possibly those related to physical resources. I think your land lease scheme would take care of the latter, and a reasonably limited government wouldn't contribute unnecessarily to the former. Most current day 'monopolies' are just companies someone finds hard to compete with (MS), or government sanctioned ones in (light) disguise (Telco's, utilities).
4) Hard to argue with that. Just make sure everyone has an equal 'claim' on these externalities. The right to emit CO2 should be given equally to each citizen, not as quotas to Exxon etc. Then Joe bicyclist could sell his share to Exxon, or if he so pleases, donate it to the Sierra Club.
5) For local roads, absence of government involvement does not mean a developer could not buy (or lease for a sizable term according to your scheme) a plot of land, put roads in place, and profit by selling off individual (now presumably more valuable) lots. The selling price could also include a contract to maintain roads for some lease term. Bigger arterials are a lot easier to price by usage.
I totally agree with you about obtaining government revenue from real estate rather than income. My 'scheme' would be a bit different than straight leases, but that's just details. Currently, most libertarians I know, especially American ones, seem very opposed to this. Most want government intrusion to, at the very least, stop at their property line. Since libertarian candidates are consistently getting less than 2% of the vote, and their share is not increasing, I think reworking some of their policy prescriptions are wise, though, and taking the hammer to some old dogmas about real property might be just the ticket.
You need a single namespace for human beings, which is cryptographically protected so that the only entity which can link a person's reputation to their biometric profile is a court of law. When there can only be one of something - and there are good reasons for not federating biometrics databases - then it makes sense for the government to offer that service, rather than private enterprise.
On top of this, build a contract infrastructure - a set of technical standards for digitally signed contracts - this could be free market, but the standards body should again be unitary, so that contract standards are singular. Hence, the standards body is quasi-governmental.
This is infrastructure which is essential to commerce, but - because of the namespace issues - it cannot be entirely provided by the free market, which would naturally tend to fragment the namespace. You can see an entire parallel chain of development with DNS.
Power grid: do not offer, do not want. http://smallisprofitable.org
Similar approaches for water supply and sewage treatment: set standards for those offering the services, sue those who fall below those standards, leave it to the market. This stuff used to be unitary-provider 200 years ago, which is why govt. still does it now, but technology has moved on.
I have a couple of not-read-for-prime-time papers on the concept I've been working on for disaster relief called "State In A Box" that I can pass along if you are interested: hexayurt@gmail.com http://hexayurt.com/
Real markets are filled with things like marketing, fraud (two points, I would argue, along the same continuum) and consumers who are not going to do what's best for themselves.
My own view is that the government should provide a decent life - including paying for meals and shelter if need be - for every single person. I'm at a school where I'd rather not be, taking classes I'd prefer not to, because I will need a degree to get a job. If I knew that the government (or rich relatives, for that matter, although unfortunately I have none) would support me if I were to fail at entrepreneurship, I'd drop out tomorrow.
Basically, the government should guarantee that it'll keep all people at a basic level of human decency. This would allow all citizens to take risks, which is essential in innovation.
Oh, and the government should handle most things that private insurance companies do nowadays. The way I see it, people shouldn't have the choice to not pay for some things. If we were to give people the option of not buying health insurance, it would make us a very cruel and cold society to stand by as the unfortunate souls who chose not to get insurance die of an expensive, treatable diseases. The cultural cost to society is far too high.
Edit: Word choice, among -> along