1) Government knows how to spend our money wisely on things that improve the quality of our lives
2) Getting rich equates to improving the quality of lives of society, as a whole. I know several industries where this isn't the case.. (gambling, cigarettes, fast food)
I don't gamble, smoke or eat fast food - but I'd hate to live anywhere that didn't give people the freedom to do these things if they wanted (and in the case of smoking, outside or in their own properties).
He says no such thing. He says we live in an imperfect world where the government has a role to play in getting us out of this recession. As to your second point, that's based on your opinion of what constitutes making society better.
I didnt say he said those things explicitly. But by saying it's patriotic, he's assuming those things.
Yes, it's based on my opinion. Yes, I'm generalizing, and I bet the majority of human beings on this earth would agree there are industries that make people rich and are harmful to the general public. In fact, I'd argue there's a TON of them. Humans love to self destruct (ie. get fat, kill themselves, get addicted, overspend, etc)
Probably why we need government eh? Have you ever set your clock ahead 10 minutes to help keep you from being late? Why, you could just be responsible instead?
This is the premise of a democratic government, when you realize that you will not always do the best thing for yourself or your neighbors, but you still know what the best thing is and have a government that enforces it, knowing it could come for you if you break the contract.
Obviously it is not a perfect system and we must be vigilant to improve it constantly, but anarchy is not a viable option.
In many cases government does spend more wisely than any single individual, but that may not be the cheapest approach, there is a difference. Look up the "Price of anarchy".
Rather than me hiring security for my house at a rate of maybe one hour a day -- the only amount of private security I could afford -- the government pools the money of my entire community, hires many security guards, equips them, and lets them drive around my neighborhood.
Then, instead of my spending an hour or two educating all the kids in the neighborhood, in the hope that the next generation of people aren't morons, they take some money from all property owners and use it to build schools. Those schools to ensure that a very wide swath of the population, even the poor and stupid, meet minimum education standards. That way, at the very least they can go and do the service jobs that I don't want to do, and so many of them meet that minimum education level that they can be hired for a low wage, thus keeping the price I pay low.
Rather than me hiring security for my house at a rate of maybe one hour a day -- the only amount of private security I could afford -- the government pools the money of my entire community, hires many security guards, equips them, and lets them drive around my neighborhood.
But the reason there aren't private security companies working like that is because the police exists.
I know places (not in the 'States) where the police is grossly underfunded, and the local shop owners do exactly that: they all contribute some amount to a fund that pays a private security company to drive around in the area. It also protects the homes, which is good PR for the local shops.
Thanks, this would have been my response for the most part. National Defense, Police, Fire, Education, Roads, Water Systems, Sewer Systems, and Healthcare(just a form of nation defense IMO). These are all very expensive endeavors that simply don't work that well if the individuals "shops around".
The government spends wastefully in defense, education and every other service it seeks to provide.
I agree in principle that it's generally beneficial for individuals to pool resources in order to address common needs. But this happens on its own in a marketplace. It's called the division of labor.
Wastefully compared to what? Do you know of any other organization that provides essential social services to hundreds of millions of people?
Do you have actual facts to supply here? Can you provide an a legitimate comparison for us, or are we supposed to simply accept your free market mantra?
The existence of waste and inefficient behaviors does not mean that the system is wasteful.
> Do you know of any other organization that provides essential social services to hundreds of millions of people?
I would categorize food, clothing, furniture, and housing as essential needs. They're all provided for by competitive markets.
There's nothing unique about health care, education, fire, power, water and roads that these couldn't be provided by competitive markets, too.
> Do you have actual facts to supply here?
I think the price tag on the Middle East war(s) is over 1 trillion dollars. This expenditure is done under the umbrella of "defense."
If your local security company told you they think it will make you safer if they expand their operations to the Middle East to seek out shady characters, and oh by the way, we need to charge you 10 times as much to pay for these new operations, you'd take your business elsewhere.
The inherent danger in government programs is that there is no effective check on expenditures save the restraint of the government itself.
There is certainly waste in a free market, but in a free market the waste is isolated to individual firms. If they lose money, they go out of business.
There is a good case that the cost of the war(s) is so high because the administration which prosecuted them relied so heavily on private companies for services. Donald Rumsfeld came into the DoD with an ideological belief that private companies could do the job more efficiently, and, based on that belief, he turned the DoD into an ATM for the largest defense and security contractors.
And waste in free markets definitely is not isolated to one firm. Ask a bank.
Why must there be a single organization that provides services to hundreds of millions? Why can't there be thousands of orgs that provide service only to a few hundred people?
The food industry is a good example. Unless you don't consider food essential.
Is that really a good example? The public subsidizes agriculture in the US and other industrialized nations precisely because it is essential to the public good.
Without subsidy, food would be as expensive at Safeway as it is at your local farmer's market -- which varies drastically by location. In Sacramento, fresh fruit is <$1/lb; in SF it can be triple that, or more.
Maybe that's not a bad idea to have people pay what food really costs, but it's not a free market success story in any way.
It's difficult to find any example of a free market in America. The food industry an a whole is more free than the other social services listed above.
And a government can't just make something cheaper by edict. All a subsidy does is shift the burden of cost from the consumers to the taxpayers, or more likely anyone holding a dollar because most of these government programs are funded through deficits.
To be fair, I used to advocate public works projects and argued for smarter spending of public money. I changed my mind drastically after studying a bit of basic economics.
If you're really interested in exploring these principals and have an open mind, I recommend "Economics in One Lesson."
I've studied economics well, I just haven't come to the same conclusion as you.
Piece of unsolicited advice, take it or leave it:
I would suggest that, if you want to be taken seriously, you present your ideas in a way that demonstrates your understanding of the nuance involved. When you say things like "all a subsidy does is X" and imply simple A-B causal relationships between the public and private sectors, it's hard to believe that you have considered these issues thoroughly, as opposed to merely another axe grinder.
These are real-world systems, which deeply impact the lives of millions of people. To simply dismiss them or force them to fit into Platonic molds is silly.
I appreciate your advice. I kept my post short because I think long posts tend to get tedious and discourage a healthy back and forth. But please don't assume I haven't thoroughly considered the issue.
> I've studied economics well, I just haven't come to the same conclusion as you.
What are your conclusions? It would be more fruitful to hear your thoughts on the issue rather than a critique of my presentation style.
I'm not trying to grind an axe by stating that a subsidy "shift[s] the burden of cost from the consumers to the taxpayers." Wikipedia's statement on the impact of subsidies is nearly identical to mine:
"Farm subsidies have the direct effect of transferring income from the general tax payers to farm owners."
I agree with you that the system is complex. The complexity is precisely what makes it difficult to identify the hidden costs of subsidies.
A subsidy takes taxpayer money and transfers it to producers of a certain good. I think this is inherently unfair, regardless of whether it's done with good intentions. I think the only fair method is to let people choose for themselves how they want to spend their money without coercion.
I'm a vegan, and believe my food choices make a positive impact in terms of the environment and reducing environmental cruelty. But I think it's immoral to force that same belief on others using the apparatus of government. It would be unfair for the government to intervene and make it prohibitively expensive to buy meat or animal products.
In addition to being inherently immoral (IMHO), subsidies have unanticipated costs and unforeseen consequences. Some examples:
- The artificially low price of the subsidized good leads to an artificially high demand for the subsidized good at the expense of demand for competing goods that are not subsidized. This hurts the producers of those unsubsidized goods.
- The corn subsidy has driven the price of corn syrup below that of cane sugar, making corn syrup the sweetener of choice in mass produced foods. Corn syrup is an inferior sweetener and leads to health problems such as obesity.
If you require links to supporting commentary I'm happy to provide them.
I don't doubt that many subsidies are created with good intentions, but because of the unseen costs and consequences, it is prudent, for the long term health of an economy, to avoid them.
I find almost all vegans annoying, particularly because they have no understanding of economics, or human behavior or the importance of either. So it's refreshing to see someone who is vegan and also cares about those things; I also am vegan.
This thread is getting out of hand for HN but I'd like to continue it; if you'd like to also, my email address is in my profile. Thanks,
I know the price of anarchy. We don't have such a thing in this world. So no sense in learning the "price". We COULD learn a thing or 2 by looking at the PROS though.
I think there's an argument to be made that even the industries you mention improve the lives of people in society. Assuming (1) all gambling/cigarette/fast food transactions are voluntary on both sides, and (2) people act rationally, then any money that you spend is done because you perceive the good you receive to be worth more than the money you spend on it.
One counterargument in the case of addictive drugs or "vices" is that transactions aren't completely voluntary, since you are acting under the influence. In gambling you might also not act rationally. Nevertheless these are still a subset of all transactions, and taking your argument to the extreme of outlawing these industries would prevent a decent number of society-bettering transactions from taking place.
I never suggested outlawing any industries. Just pointing out the flaws in his post.
Our modern society is set up so that it takes our primal urges to the extreme, making it BAD for the individual, but probably good for the overall economy. Our choices are hardly rational because we don't understand how our genes and primal urges work subconsciously. That's why men cheat, do drugs, and self sabotage ourselves.
1) Government knows how to spend our money wisely on things that improve the quality of our lives
2) Getting rich equates to improving the quality of lives of society, as a whole. I know several industries where this isn't the case.. (gambling, cigarettes, fast food)