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The role of government
Postal services often monopolized by state. Cellphone is private. Healthcare is often state provided. Gyms are private. States usually grant retirement benefits. Banking is private. We rarely ask why.
I'd like to challenge these views, and ask everyone to argue. Argue why the free market can not provide a service, or argue why the government can do it better. Or perhaps do you think the government does something it should not or does not have to. Make your case.
Possible subtopics:
Education.
Should the state provide to all for free? Is the curriculum overregulated? Can the government force children into state schools? How free education would look like?
Healthcare.
Is compulsory participation good or bad? What is the desired level of coverage? What is the real cost of healthcare? Who have to pay it? Consequences of private healthcare?
Benefits.
Who takes care of the handicapped, the veteran, the widow, the aged? How much to save for retirement and when? Who decides?
Legal system.
Are our lives overregulated? Should the state punish victimless crime? Who judges the judges?
Environmental issues.
Carbon tax? Oil spill: regulation failure or market failure? Coltan from a warzone: how did that happen?
In the related talks, I tried to focus on personal achievment vs central planning. The list is far from complete. Please add more if you have.
Closing Statement from Krisztián Pintér
this debate is ongoing, though largely unnoticed by the masses, for at least two centuries. now i have the opportunity to write a closing statement on it. obviously, it would not make much sense.
instead i would urge anyone not to rehearse the creed, but really, deeply think about the question: can we do it differently? our concerns and fears are real? our logic is correct? our information is reliable?
you can't lose. even if you come to an uncomfortable conclusion, in the worst case, you keep your it to yourself. but better to hide than to not have.
Krisztián Pintér 200+
Chetan Mahendra
2. Agree with you in practice, though in theory a man with no income has no power in a markets model but has equal weight in a voting scenario.
3. That is an excellent question. Even though the 1938 German army is much weaker than modern armies, it is enough to damage U.S. if they don't take any action. Realizing this, I imagine U.S. citizens would have to come together to form a plan to defend themselves and execute it within 2 years. They would soon realize this will need expenditure to pay for the brains who will dedicate themselves to strategising the defense plan, and more of it for the execution. But who pays for this? Since it benefits them all, they would all have to contribute - barring the very poor who need it for basic needs, the slack being picked up by the rich (like our taxes today). But who would administer this collection and distribution? They would have to form (or elect) a governance body for this... In effect, they would have the rudiments of a defense department.
In reality, the question should be the same but assuming two modern nations. If U.S. abolishes it's state sponsored army today, what chance does it stand against an attack from North Korea? I agree that state armies have not always been successful in protecting its citizens, but they have been successful at other times and provide the best hope once a war is underway.
Krisztián Pintér 200+
2. we should agree to disagree, because i believe that people with no income (and no family support either) have no say in political issues. even people with very little income often are "left behind". i live in a country in which hundreds of thousands of people lives with close to zero education, and practically with zero political weight. they have the knowledge to make decisions about their own lives, but they certainly lack knowledge to choose from political parties.
3. since it is all speculation, i just add my ideas: i would argue that poor have the least to lose. so they would not give up much of their wealth, and instead they would opt for not giving a damn. the "rockefellers", on the other hand, have much to lose, and so they would mobilize a great deal of resources to keep their empires. second observation: i suspect that the result would not be a country-wise organized movement, but rather a localized defense mechanism. cities on the coast would build minefields on the ocean, and artillery do destroy ships. landlocked cities would build walls and trap systems to stop the invasion army. civilians would stack up anti-tank and anti-infantry weaponry, and so on. i personally can imagine such a bottom-up approach being more successful than the top-down method of today. i recommend to check archimedes of syracuse, and his ingenious siege-breaker inventions. one man can make the difference.
Chetan Mahendra
2. Okay, agree to disagree
3. This could go on forever. I could contend that most modern rich people don't have their wealth concentrated in one geography i.e. they will only lose a fraction if they just abandon U.S. and seek asylum (or just move) elsewhere. Middle class and below will lose everything if U.S. gets destroyed, so will have more (or at least equal) reason to act. Again, there may be a smart Archimedes who will choose to get creative within the 2 year period, and there may not. Your 'rockefellers' may decide to contribute at the last minute or they may not. As with point 1, a standing military reduces the volatility in possible outcomes by extending the time frame and investment - any Archimedes working at any time could contribute his inventions to the army without the need for an announced attack. Taxes to fund the army also even out the burden (as much as possible) of a benefit that will clearly be accrued by everyone.
Krisztián Pintér 200+
3. for one, it is not true. not all and even not majority of wealthy people have their wealth spread over the world. two, it does not matter how much percentage they are about to lose, the question is how big is that part. whether it is reasonable to contribute to the defense or not. it is clearly reasonable.
how do we know what is the correct size of the standing military? sure, a bigger military means more safety, but also means higher cost, which equals to less education, less healthcare, less food, less infrastructure, less economic progress, less scientific progress, and so on. how do we know that the free markets' last minute approach is not the better?
Chetan Mahendra
1. Private companies are mandated to maximize shareholder value. It's hard to find incentives for them to bring about any social good if it conflicts with a profit motive and I feel in such cases government (or judiciary) may legitimately intervene e.g. paid maternity leaves as an extension to gender equality at work
2. As you mention in a previous post "company's goal is to make profit, government's goal is to get votes" - not everyone has equal wealth but everyone does have equal voting rights. I believe a private enterprise may be more efficient at execution of ideas or services, but governments need to play the crucial role of setting a framework in which profit mongering of free-markets does not imply ignoring the needs of poor.
3. Military: I see you begging the question why U.S. needs to spend so much money on it, but assuming that it needs to at least spend some money on a basic military we can ask whether it should be run privately or by government. If it was a private enterprise, who would pay for it? I know that if the military is to prevent an invasion into the country, it would save everyone in the country not just the ones who pay for the private protection; so what would be the incentive for everyone to fund the military? There are clearly parts which can be outsourced to private companies but the military as an institution still needs to be operated on tax payer's dime and hence the role of government.
Krisztián Pintér 200+
2. on the other hand. voting for public issues mean that we might ignore the wish of 49% of the people. but if we let people to decide for themselves, even 1% can find their way to do things as they please, provided that their demand finds a supply. even if i have billions in the bank, in a free society, i can not command anyone else, but only decide how i use my own billion. i have zero control over anyone else. in a democracy, i have 1/N (N being the population) control on other people's life and property. on what grounds?
3. let me begin with the fact that only states wage wars on each other, nations never. never ever a peasant took a scythe to seize the land of another peasant. wars between tribes indeed happened, but long ago. but what if we have a free society, but the neighboring country does not? what to do against that threat? and the answer is: were states so successful in preventing such threats? the nazi germany easily occupied many strong and healthy countries. it seems that states can not defend you against aggression. level of the economy can. wealth can. technology can. and these things are best provided by free markets.
Chetan Mahendra
1. The fact that human race has survived with certain norms does not mean there is no room for improvement - I imagine women's participation rates in workforce as well as the quality of their jobs have both improved as a consequence of such laws. My point is that markets will not efficiently (or at all) allocate the "social" good to the extent that it contradicts the "economic" good. I chose maternity leave as an example of that as companies would discriminate against women in hiring to avoid those costs if there was no law. It may take a long time (if at all) before these disgruntled women are able to put up a strong enough economic demand for companies to change their policy. A law reduces this lag time.
2. Your point is quite interesting, never thought of it that way. I doubt that the poorest 1% of the population can create any economic demand - they may have compelling needs (e.g. homeless shelters) but if they can't pay for them who would want to cater to them? On the contrary, a man with billions of dollars can create sufficient economic demand for almost anything (e.g. trip to the moon) and markets will oblige with a supply. As for the merits of democracy, I believe it's still the most equitable form as all other forms of government end up with someone having more than 1/N influence over others. If your question was why do we need government at all then I believe a separate thread is needed.
3. I grant you that high levels of economy, wealth, technology are likely to be more effective deterrents to war than a strong military. But for whatever reason if a war is underway your best bet is still the presence of an effective military. Taking your example, World war 2 ended when a more powerful military entered the fray against Germany. But military is just an example, you could take immigration control / border patrol or police and the same questions apply.
Krisztián Pintér 200+
2. poor certainly has a say what products and services they want to buy. everyone has this choice if has any income. a man with no income is a problem, but usually those men has no power to influence governments either.
3. my point was not that advanced societies don't start wars. my point was that states often failed to protect their citizens from aggression, so it is not enough good argument for having a state. here is an interesting thought experiment. imagine that the nazi germany of 1938 decides to attack the US of today, but with no state at all, no military, only local polices, etc. suppose it is not happening in a sudden, but US citizens have, say, two years to prepare themselves for the attack. do you think the 1938 germany with all its military power would be able to conquer the 2011 US citizens if they are determined to defend themselves? i think it is an interesting question.
Lindsay Newland Bowker 50+
Krisztián Pintér 200+
and the final question: if this is a monopoly, what does that mean? what consequences we can draw from having a monopoly?
Lindsay Newland Bowker 50+
It's not a typical situation to be sure just a bit of a red herring to suggest that private companies some times set onerous conditions or omit the "social well being" and "social justice" part s of things.. I think that has happened with the privatization of presion systems, for example..that to make a profit they focu son things other than restortaive justice, rehabilitation, jobs training etc.
Jáfia Câmara 50+
To make this clearer. You say the inventor "lends" the tools for three fish a day. But this would be unacceptable in a small community (because in small communities you really witness how essential every role is, this gets overlooked today). The small community would say that the invention either be sold to the entire group, in exchange for the fisherman getting the same thing everyone in the small community gets for their role, food, water, house. Then the fisherman has an option. Struggle on his own as an individual where his invention might help him eat, but he has to work like crazy to build and provide for a house, dig a well, water, etc. Or the fisherman, realizing how much he benefits off of the community and their ability to concentrate on individual roles, could continue to provide his invention in exchange for a life of comfort. Just like the mechanics or farmers or builders.
Now I understand your point. Society benefits off of his invention. We would all be better off with it. But I hope you see my point. The only realistic reason these inventions come into being (just look at the last 10,000 years of history) is within societies that allow for provision of enough of the essentials to let someone concentrate on this invention. And the motivation is a plenty. People enjoy inventing, most inventors get very little out of their inventions. In fact, the private sector is much the exact same way, with one exception. Most inventors invent in exchange for a steady, stable and set income, ie. taken care of. If they make a huge invention they don't get rich off of it, the corporation gets rich off of it.
Realistically, small communities, you can see how it really works. You can see how what is really taking place isn't a big corporation providing but people providing. That inventor is going to work just as hard in a community that values each others roles, providing a steady life, than for a corporation that does the same, right?
Krisztián Pintér 200+
and again, no, the inventor as a job came much later, and not even typical today. how many people you know who invented something, and did nothing else in his life? it is very atypical. even companies that do research, most likely do some other activities too. it is not a prearranged contractual relation. inventions mostly sold after they get invented.
the most typical scenario is that the inventor is the fisherman, and he does not even share the invention, but keeps it secret. he outsells his competitor fishermen, drive them out of business, establish himself as the only fisherman, extend business, hire workers (probably the former fishermen). this looks like a grim scenario at first. but in the long run, the total output of the community is up. we have to accept that with progress, some people will have to leave their old job, and look for a new one.
(note: most of the time if an invention increases the output of a sector, this sector will soon have higher job count, not lower. it happened with the textile industry when the weaving machines were invented. the simple economic reason behind it is that with machines, the worker's marginal revenue product goes up, so it is profitable to hire more workers, and expand business.)
Jáfia Câmara 50+
The private sector is inherently pitting one against another. Profit is sought by exploitation, supply and demand at its essence embodies this principle. Would you agree? The public is, like my example before, society saying "we all do roles, so you will fill your role and not get special treatment." Government is a way to reign in unfair and exploitative processes. In the U.S. this took place the beginning of the 20th century. Monopolies were burst open, wealth was redistributed, this was the same as the village telling the private individual that he can't participate in society (and benefit more than others) without being regulated.
I do not question that the system of privatization has led to great leaps in progress. But I don't think you would question how much government has progressed us (lots of technology, computers, internet, were subsidized by the U.S. public, not private) I think we both agree we want the best equilibrium to improve human life. I think small societies really can show how a just society runs, and those are cooperative, not exploitative, that are successful.
Krisztián Pintér 200+
no i would not agree that the private sector is about exploitation and one-against-another. the private sector is a grand scene of cooperation. it is so vast level of cooperation that we can't even comprehend. (TED talk of Matt Ridley explores this in detail).
all you can say is government is *supposed* to be the shepherd to watch out for any unwanted tendencies in society. but it is yet to be demonstrated that it do or can succeed.
for example subsidies. if i take your money, and help you buy a computer with that money, you feel pleased? look at the mountains of money the government takes, and imagine what kind of progress would be possible with that money. but that money went into the military machine. into friends' companies. into propaganda. into rampant vote buying. government created the internet. and the internet was small, and never grew. then public sector took over, and ... boom. check out the talk of Burt Rutan, cited above.
Tim Colgan 50+
Krisztián Pintér 200+
Jáfia Câmara 50+
change the example a little. let one robinson be a superbrain, and inventing a new tool that allows a man to catch 5 fish a day, instead of one. he lends out these tools for 3 fish per day. "
Take the individual Robinson. No matter how intelligent and hard working he is, the amount of "wealth" he is going to be able to accumulate is going to be next to nil compared to the 999 working together. Physics and time are constraints that must be acknowledged. The one single Robinson is going to be too busy catching and growing food, building and repairing his home, finding and transporting water, devising and constructing a means of transportation, to ever be able to take the time to create items of luxury like the 999 working together. When these essential jobs are taken care of, some will grow food, some will build, some will dig wells, some will take care of the health, then that allows for others to then build the luxuries of life. Less struggle for essentials.
So then take the ONE superbrain. If the superbrain is the one that is not part of the 999 he isn't going to have time to make his invention. And if he does, it only aids him. If he is part of the 999 realistically he would only be able to create such great inventions because the OTHERS were performing their roles, growing his food, etc. In a small group of 999 every role would be more readily valued. It wouldn't be tolerated to then allow one who is able, because of all working together, to use this situation to then exploit the others.
Krisztián Pintér 200+
but we never see examples of societies appointing a person to dedicatedly be the inventor. invention does not come on demand. it is the other way around: if someone is good at inventing new things, he can make a living by selling new technologies. that is, his comparative advantage is in invention.
of course, in a community, everyone is reliant on everyone else. you can say inventor as a profession would not be possible without the fisherman and the tailor. but the tailor also could not do his job without the tools made by other persons, and without the inventions of the inventor. that is the social cooperation. everyone is "exploiting" all other members.
Jáfia Câmara 50+
That type of model may be beneficial in a few sectors, but I don't trust it and it is a necessary evil. The public is where we have a say. The second richest person in the world is a person that lives in Mexico and has a monopoly over the phones there. Tell me, how can exploiting the people of a third world country produce the second richest individual? You just know something is wrong. You really think Mexico is better off giving their money to this individual, instead of banding together (government) and doing it themselves?
And I lose myself, so it is quite normal for your to feel like you aren't following me.
Krisztián Pintér 200+
about that phone monopoly: why that person has monopoly? it is granted by government? it is maintained with weapons? it exists because law creates entry barriers? or simply noone is willing to start another telcom company? this is crucial, essential information.
Jáfia Câmara 50+
When government telephone companies in my home country were privatized, I had mixed feelings about it because I knew that phone services would be a lot more expensive but on the other hand, I knew that when they were state owned the services were not great and the money made was eaten by corruption.
Krisztián Pintér 200+
and see? you yourself expected a quality *increase* after privatization. (even knowing how such processes used to go. being a family member usually is a factor.)
and about the prices: i have a feeling that telcom services were run with huge deficits earlier. am i right? so we need to count that in the real price. here, in hungary, every single government run "business" is practically bankrupt. public transport, post office, healthcare ... all in ruins, eating into their capital stock, having huge debts.
Tim Colgan 50+
How about a thread on education? What do you think should be the government's role in education?
Krisztián Pintér 200+
Nicholas Lukowiak 50+
My professor brought up an excellent point about Norway. http://en.wikipedia.org/wiki/Economy_of_Norway
Taxes are high, but everything is taken care of as far as public benefits. Granted there are many countries who can't afford high taxes or even pay taxes. Those countries who have the relative means as Norway should take example.
As far as specifics I only know in detail Education systems.
Should the state provide to all for free?
Yes, in fact the most money in a nation should be on it.
Is the curriculum over regulated?
Don't get me started.
Can the government force children into state schools?
As far as America they do. However, once they are 16 they can be signed out of the system (as far as my state). It is ridiculous because in this country you can go online and take a test to get a GED and print it out and apply to a community college do good and get into a better college. K - 12 schooling is actually a waste of time here. The home schooling programs are proving to be far better than public schools. Now more pressure is on students to go to higher educations because jobs are limited but college education cost as much as a house does.
How free education would look like?
The systems of educations would be far better if parents were able to go to class with their children on occasion, they would learn how the teacher is teaching and be able to help educate their children with similar or the same teaching strategies. Perhaps once a month teachers and parents would get together and not just discuss school business but talk education business. The teacher's will give tips on how to encourage critical thinking at home so the schools would not have to take extensive additional cost in such programs.
Student-teachers who would intern for a year (maybe two) before getting paid and becoming a teacher.
Internet would be used more than textbooks (as it should)
Democratic education curriculum is cheap
Krisztián Pintér 200+
should education be free? or more precisely, publicly financed as opposed to privately financed? your answer is yes. why? it is cheaper? it is better in quality? it is more fair? it is a human right? or some other reason? how do we know? can you prove your point? can you convince someone who does not believe you?
you say parents should closely supervise education. we need the government for this? should the government enforce it with a law? what role the government can play in order implement such a system?
Nicholas Lukowiak 50+
Yes, because now with technology information can be spread out, sourced, filed, understood, and even categorized to it's most maximal potential. There are a hundred websites in which sell textbooks for pennies, lesson plans, curriculum ideas, group project emphasis, the list goes on. We are not maximizing our technology, it is RIGHT HERE, yet people cannot see it past social networks and cat pictures. Quality is in those who are the coordinator positions, so in Democratic education, students and teachers work on the education to educate them all (teachers and students must be open to learning and teaching). It is fair because students do not have to just waste lives being told what to do. The system already is in existence. http://www.summerhillschool.co.uk/
Indeed it should be just as mandatory for adults who children are in the system of education to be apart of the system. The meetings in which I mentioned would prove to not require critical thinking to be as much of the emphasis in school but the result of the parents doing. Kids will be getting the most out of their required time in education systems instead of learning how to take the easy ways out. The government role here would be to ensure parents and children are learning, when you stop learning you stop thinking and you become a puppet. Indeed these ideas will not work in most systems because they are too free lanced.
Ideas to install into modern curriculums would be class on "civil rights/duties' "basic politics" "business idealism" or a mixture of the three or any combination. Considering economics is what systems revolve around it would only make sense to make sure the future understand it as a whole and not just a few select. When only a few know what ideas revolving around economics and politics inquire there is only going to be control of the masses through manipulation. If all knew how to be a politician a country would strive to the stars.
Krisztián Pintér 200+
what is the logical link between websites, ideas, projects and education being publicly funded? aren't all those things came to life voluntarily, without government help? isn't it a sign that we need the very opposite? that we need more private, distributed, unregulated education? remember, public education is not free. it is actually expensive. private education is cheaper, though it might be less fair, and harder to control. so why we need centralized, publicly funded education in an era when creativity and flexibility is so much needed?
Nicholas Lukowiak 50+
I am not that good giving arguments without opinion, it just is not in my nature. However to answer your further questions.
you are absolutely right and I did not consider that. I was assuming that government would take an example from charter or private schools in how to educate eventually therefore they are proving to be superior. Unregulated schools are a double edge sword; one side the school can have massive trial and error lesson plans that will ultimately be perfected and maximized, however within these trials who are performing them? and will they consider all the possibilities that exist into the trial?
We still need intellectuals who will know what works and doesn't as far as education. Even if it is critical thinking, there must be structure, cannot just ask children questions and expect Einsteins. Just not happening. WE NEED everyone to understand that free thinking in all subjects just make you able to learn better, Obama actually recognized this, he knows we are a dumb nation, look at the Bible belt...
People already pay taxes in thinking they are getting their tax dollars worth, if this is not the case perhaps their money should be refunded in those areas to be used privately OR instead of spending on military and refunds for big business, we bail out the education systems.
I can't answer fully and to the T sir, i am only aware of public systems in my area and how they work and are assuming that may be how it works else where because many countries are similar due to corporations in schools. All I know in this nation we are going after the schools (i.e. the future) not the military machine, they are basically pushing all of our youth to be soldiers at this point.
Private schools are probably better to consider, however then the rich get a better education then the rest. Public schools allow that to be fair for all. Just need to actually care to fund schools and not take away from them.
Krisztián Pintér 200+
you say we need structure, and we need intellectuals. but both of these do exist outside the state provided sectors, so this is not a complete argument on the side of government. why can't the free market create the necessary structure and intellectuals? why can the government provide it better? the public education is a disaster in the US and in hungary as well. even in countries famous about their education systems, how do we know it is better than the free alternative?
poor vs rich. the problem exists. the solution is to take over the whole thing? poor people has less chance to get quality food. so government should take over the entire food market? maybe cost efficient education is what poor people need? being cost efficient is not something the state is good at, is it?
Trevis Kelley
I just wanted to throw other subtopics out there. Scientific discovery and military/foreign action. Should the government be dropping money into scientific discoveries and then allow the companies to run with the profits? Should the free market be in charge of spending for that? Should a government put the money up front and then demand a piece of the action later?
As well, should a government hire private contractors to fight in wars for them? Should they spend the money for reconstruction after a war (should they hire contractors to do that as well)? Should they hire locals for that and not see any money return to them, or should they hire people from their own countries for that?
I think given the current US situation, there is need for those questions as well...
Krisztián Pintér 200+
scientific discovery is one of the few key issues that allows mankind to survive and flourish. obviously we don't want to risk that, and put it in the unpredictable hands of private industry. or do we? maybe government wastes money on unimportant fields? wasn't it the private industry that broke the human genome? isn't the private industry gives us drugs? haven't google develop a new programming language, just because they could? can we say that if a scientific discovery would make our lives better, so has a *demand*, the free market will find a way to get there, providing the supply for that demand? what exceptions we could come up with?
military. i have only one question: why the US spends more money on the army than the rest of the world combined? especially if we consider that the enemies, more often than not, are rag-tag armies of undeveloped regimes. or guerrillas and terrorists that have one thing in common: a regular army is largely ineffective against them. no doubt, such an army gives a level of safety, but at what cost? is this a success?
Aldous Blair
Krisztián Pintér 200+
Paul Hauck
Markets seem to be very good at making resource allocation decisions (where do we invest capital) in order to maximise the generation of capital. They are not perfect, nor comprehensive - for instance, once the capital is invested, it's administered by corporations which are not democratic or competitive, but effectively dictatorships or representative democracies (representing shareholders). The result has been a huge growth in the pool of capital in all it's fungible forms. Those shareholders that do a good job allocating capital to reproduce, get more of it to allocate.
Governments seem to be (at least until recently) better at making decisions that require everyone to agree (or at least comply) - proscriptive laws we all need to abide by. I think that a reasonable measure of the success of any government might be the extent to which people comply with their decisions (the inverse of the crime rate, conceivably). Operationally, they also seem to do a much better job of allocating things that we believe everyone should have equal access to (education, food, healthcare - in most of the world).
Thus, I would say that markets/businesses are better at maximising things that do not need to be distributed equally, and are self-perpetuating - basically, money/capital. Governments are better suited to making group decisions about the social contract (laws) and distributing equality-based goods and services. There will always be a fundamental issue in that the goods and services absorb capital, which needs to come from the market-based arena that generates it.
Just my A$.02 worth.
Krisztián Pintér 200+
"it's administered by corporations which are not democratic or competitive"
very important, but an often overlooked fact. we can say that capitalism ends at the gate of the company. inside the company, there is no capitalism. capitalism happens between companies, not inside companies. very important observation.
"decisions that require everyone to agree"
we could continue on that path, and discover what are these decisions.
"food"
this is an interesting issue, since it is the most basic need, yet, in the western world, there is no attempt to make it state provided. food is produced and distributed on the (mostly) free market, and at a ridiculously cheap price too. food is not an issue anymore in the western world.
"healthcare"
another very interesting problem. free market probably can deliver healthcare better and cheaper. however, the price would be the same for every social class, regardless of the income. and the price would be different for people with different genetic background and lifestyle. pros and cons. but what if one day healthcare will be as cheap as food today? can we then let it for market to provide? what if that time is already here?
"education"
i just recommend the related TED talks, by sugata mitra, ken robinson and others, to see that the state provided education system is a total failure. even if it is more equal, we lose nothing if we give it up, and go for free education (not free as no-pay, but free as not controlled).
Aldous Blair
The problem is how low a priority is for votes (whose daily lives it rarely continues to change) and for politicians, who think pumping more money into the system solves efficiency problems.
How do you view 'academies'? Privately run schools that are paid for by government on a per-child basis, on the condition that the school accepts each child on a first-come first-serve basis, without any additional requirements or entry testing.
I would expect libertarians would be satisfied as government no longer controls the school directly and competition is increased, and egalitarians would be satisfied as education is still state-paid and not an obstacle to social mobility.
Krisztián Pintér 200+
libertarians are hard to satisfy :) i think there is a ladder of government involvement, something like: state control > state is one competitor > compulsory participation but private providers > regulated/subsidized market > free market. i think we always should assume the lowest level, and only go for a higher one if we have a very good reason.
Debra Smith 200+
Krisztián Pintér 200+
as i can see it, the main source of venture capital is the big business, megacorporations. look for example the recent development in space technology. the private sector is taking over.
Debra Smith 200+
Often when a person or company wishes to develop and idea outside of academia the private sector is the only game in town because of huge start up costs- but if they are not playing- the idea or product goes nowhere.
Krisztián Pintér 200+
about your own business: it is not a representative sample, you must agree with this. was that plan targeting existing demand? was it presented well? did that happen in the middle of the US housing bubble, which sucked up a lot of capital? do you have a bank sector crippled by some short sighted regulation? do you live in a country that consumes too much and saves too little, like the US?
our goal is not to provide capital to each and every idea on the world. the goal is to have the capital flowing from savers to profitable business. whatever good your idea is, if there is a better idea, like producing more wheat in needy times, you won't get money. it is obvious.
one more question: today, the states help starting businesses, how? if i have an idea about a new product, how can i get state support?
one more observation: the 1900's was a time when invention was rampant, and new ideas came up every day. and there was zero government involvement those days.
Revett Eldred 10+
I agree that some successful businesses were built on ideas or technologies that were originally developed in a publicly funded environment such as universities or government/military research labs. But even then, the actual business was invariably funded with private cash.
Debra Smith 200+
Marcin Jakubowski 100+
Krisztián Pintér 200+
Tim Colgan 50+
You seem to have a libertarian tendency, so I'd like to explore this idea with you.
Suppose you could set up a country based on libertarian principles and you found that, over time, more and more of the wealth ended up in fewer and fewer hands and the median lifestyle was declining. Would you be willing to let the government intervene?
Krisztián Pintér 200+
it does not seem to be possible, however, that people could get poorer in absolute terms. since all exchange is voluntary, everyone participating must end up better off. the worst that can happen is you don't progress while others do. in that case, you will remain on the same level. of course, you can feel like a loser in that case, but in fact you are not in any worse shape than before.
Tim Colgan 50+
The fact is that we have had a rising middle class in those societies where there have been government sponsored social structures to nourish a middle class. To say it would rise without those institutions is purely speculative.
Krisztián Pintér 200+
suppose we have an island of robinsons. there are a thousand of them, all working for themselves, not cooperating. they are hungry and shiver in cold. 999 of them decide to cooperate, and create a market economy, which thrives. 999 have abundance of fish, fruits, housing, clothing and all. one decides to stick with the individual approach. this man is now considered to be in great misery, and all the 999 pity him. but actually his is not at all in worse condition.
change the example a little. let one robinson be a superbrain, and inventing a new tool that allows a man to catch 5 fish a day, instead of one. he lends out these tools for 3 fish per day. this robinson will have 999*3=2997 fish per day. the other robinsons have two. the superbrain robinson will live like a king, all women robinsons want to be his, and he can buy extravagant jewelry, etc. is that a problem to the 999? they have twice the amount of fish than earlier.
about the effects of government: how do you know what would have happened without the government? as i said, we had 7x economic development in the last 100 years. we can not possibly have empirical observations to tell apart. we need our reason to discover what is done by government and what is done by the economic growth.
Bill Harrison 10+
www.sciencedaily.com/releases/2008/12/081203092429.htm
People's brains are malleable, and how much money you have and how much food you can afford often determines how much you can accomplish, learn, or contribute to society.
The wealthy often create more capital because they are wealthy, and so they can afford more advantages for themselves. It isn't inherent superiority that leads to success, and that cuts off a huge chunk of human potential by leaving lots of poor kids with brain damage.
I mean, can you see yourself being born as an extremely poor kid in Harlem with few opportunities? Is empathy a thing with you? If not, what about interdependence? Every kid who is starving instead of contributing to society costs you something. If that''s not convincing, try reading "The Spirit Level."
In the digital age, many of the academics and people we thought were "superbrains" are going to turn out to have been quite average, because they didn't have to compete on a level playing field with every other person on the planet.
Krisztián Pintér 200+
1. your theory that links low level brain functions to economic success is very far fetched. we don't know how abstract problem solving relates to real life problem solving. we don't know how problem solving relates to entrepreneurial talents. we don't know how entrepreneurial talents relates to economic success. it can turn out that empathy, endurance, situational awareness or strong will are more important. "superbrain" was only an example, maybe "supercreative" would have been better.
2. you describe a problem without giving a solution yourself. how can government alleviate this situation? what can the government do against it that free market can theoretically not? what the government actually does? what "war on poverty" gained so far? however i can give you two things the free market guarantees: fast economic progress that eliminates poverty, the root cause of the problem, and good schools that can bring out the maximum potential from everyone. for example big corporations could finance free private schools for the poor, in order to create a larger population of qualified work force for their area.
3. let's be clear on what you say in stripped down form. you say that millions of people are incapable to make decisions for themselves, and we, with our good background, need to make those decisions for them, or simply feed them. poor people tend to refuse this notion.
Mark Meyer 10+
It is in everyone's best interest to ensure economic mobility, which often means helping those that did not begin life with the advantages of everyone else. It means spending public capital to promote a strong middle class. The more you have, the more you have to lose if economic disparity and lack of mobility destabilize a society. It has happened and it can happen again.
Let me ask you this: if you want a society where only work and free exchange determine wealth, are you willing to abolish inheritance and all the other advantages that come with being born into wealth?
Krisztián Pintér 200+
mobility is very important. for example income tax is a good way to reduce mobility, since it stops the accumulation of new wealth, and prevents the middle class to enter competition. if we have government, or other policies, we need to be careful not to hinder mobility. migration laws, tariffs, quotas and all these things are severe violations of mobility. but can we abolish them? it is open to debate.
inheritance is a problematic issue. what is the "natural", non-artificial, non-practical reasoning behind it? one interesting view is the following: you don't have any rights to the property of your father. but your father has the right to give it to anyone, including you. in that sense, inheritance can have negative effects, but it cannot be abolished without violating property rights.
Tim Colgan 50+
Let's frame the problem this way. Suppose the benefits of a totally free market, minimal government system were the best. Wouldn't some country have moved in that direction and proven to the others the superiority of that approach? Doesn't the fact that there are no such countries indicate that the minimalist approach may not be the best?
Krisztián Pintér 200+
to the latter part, i'd like to plagiarize a metaphor from the dalai lama. he was asked if the buddhist teachings are true, and detachment from compassions is good, why people not tend to automatically go this direction, and slowly drop compassions. the dalai lama said, it is like saying that people feel what food is good for them, so they automatically eat what is good. but in practice, for millions of years people ate what they found in nature. then slowly they discovered new technics, like cooking, cultivating, fermenting and so on. it was a long process, and it needed many generations and accumulation of vast knowledge.
we are still learning how to eat. we are still learning how to organize our societies.
Tim Colgan 50+
Ali Hendawy
The Egyptian revolution was coordinated entirely through the internet, particularly through Facebook and Twitter. Thousands of people discussing ONLINE how things aren't how they should be in their country and how they wanted to change things. From there a call of action was launched, and thousands, who haven't met each other before, coordinated together protests that would later lead to toppling the entire system.
Then you see the continuation of that spirit, when prison cells were 'mysteriously' opened and criminals were loose, thousands coordinated together and setup night watches to protect their neighborhoods.
After the system was toppled and people started to realize that they can do more with their time to benefit their country, we saw an enormous number of movements launched in the same manner, through FB and Twitter to tackle a lot of issues. Street cleanliness, healthcare for the injured, Night watches. I recently started an awareness movement through FB and I was amazed by the number of people who joined and started working with me on this.
This was all in a time were there was no government, but through people collaboration everything was balanced. What I'm trying to say is people don't need government that much, the people can work things out through collaboration; it just won't come out as polished as it does when government does it. Take policing for example, I admit we weren't as effective as how a trained police force would be, but still we've managed to protect ourselves and homes from thugs.
In my opinion, government should set an atmosphere of productivity, let the people handle the execution and just polish up the end result. Apply that to nations relations, you get a better world were we understand each other more, and we communicate better.
Krisztián Pintér 200+
Aldous Blair
Government should be incorporated into not only in areas of market failure and positive externalities such as road building, but necessities, goods, and services where the incentive to make a profit conflicts with the greater need to supply the good.
Private education, security, and healthcare implies, intentionally or not, that those with more money deserve better. Also important is the fact that the affluent that do not use public services, are less willing to support them with their taxes- also having the resources to dodge taxes.
Krisztián Pintér 200+
Comment deleted
Krisztián Pintér 200+
Tim Colgan 50+
... but no more.
We need to analyze it's ability to do so and restrain it when it exceeds that ability.
Krisztián Pintér 200+
Tim Colgan 50+
So rather than taking a dogmatic approach of "we need less government" or "we need more government" I think we need to have a pragmatic viewpoint and ask the question - is it best that the government be involved in this issue or not? There's going to be a lot of fuzzy issues where it's hard to decide for sure, but the pros and cons need to be weighed.
For example, the system of social security. Before the existence of social security the highest level of poverty was among the elderly. That has been greatly reduced. The efficiency of social security in terms of money taken in to money spent is phenomenal. Private insurance companies have many times the overhead. So one could argue that government involvement makes sense in this case.
Krisztián Pintér 200+
comparing the life of old people today vs 100 years ago is unfair, as the gdp per capita is like 7x higher. how do we know that state guaranteed retirement benefits caused it, and not economic development?
much more problematic are special benefits, like widows or disabled. these are indeed those fuzzy things that need careful analysis, and probably can not be treated as a single issue, there are many sub-cases.
Tim Colgan 50+
Private industry has repeatedly illustrated it's capacity to steal people's retirement investments. Governments have been quite successful at implementing systems of old-age pensions. And if you examine the overhead, it is extremely low. Money taken in minus money given as benefits is minuscule. Never that low with private insurance companies.
Krisztián Pintér 200+
however, if retirement is self-funded, it is nothing else than savings. and it is not that easy to steal savings, especially if it is backed up by a (private!) insurance.
Tim Colgan 50+
When private retirement plans are instituted, the money is usually invested in the stock market. How reliable is that? The markets are constantly manipulated and the small investors lose.
Krisztián Pintér 200+
but if we go theoretical: there are two methods of retirement benefit. one is taxation-based. current worker pays, current retired receives. the other is the account based. everyone saves money during work years, and uses this sum later. the former might need the state to organize it, i don't know. but this method is very sensitive to changes in demographics and other factors. the latter is very well provided by the free market. think about it. what can the government do in order to preserve the value of your savings? nothing really. the state faces the same problem as for example any private brokerage would. there is no such thing as safe place for money. whatever you put your savings in, it can lose value.
in fact, the government does not even try to handle my money safely. 40% of my retirement money is in hungarian government bonds. why? because it is enforced by the law, 40% is the minimum. why is that? it is so safe, after it's continuously falling rating at moody's? no. but the government wants loans badly. i don't want government bonds. i want stocks.
not the private companies, but our own governments rip us off.
Tim Colgan 50+
Look, in the end, current consumption must depend on current production. Fancy book-keeping is not going to change that fact.
My belief is that a government run, taxation-based system is the most effective means of assuring that retired people have income. Perhaps we'll learn something from the Chilean experiment, but that will take time to fully analyze.
Just wanted to make one more point on this topic. Often an assumption is made on personal investment account approaches which is misleading. Generally people analyze investment returns (say taking long term averages of the Dow or something like that), and assume that those rates will be paid to investors if everyone is using that for their retirement savings. That is probably wrong for two reasons. First the average new investor won't achieve the same returns as the more experienced investors who are currently in the market (and will probably devour newcomers) and second, a drastic increase in investment capital will inevitably result in a decline in returns.
Krisztián Pintér 200+
however, it is even more equivalent than you think. because you say taxation based system is more stable. however, it is not, as it is stable as of now. you, who pay the tax, must trust the system 40 years ahead. just like you have to trust the stock market if you save for yourself. the government is very light headed when it comes to promises. but look what happens in greece, in portugal, in gb, in the us, and probably i could go on for long. are we sure that these governments are more promising than, say, the asian stock market? i'm not so sure.
p.s.: i think the return issue is not an issue. we don't exactly need great returns. keeping the value is OK.
Revett Eldred 10+
The people who do have good retirement packages are civil servants (indexed pension at about 60% of the average of their three best years), most unionized workers, and some large-company workers. With civil servants (including police and miltary) now representing (I believe) about 25% of the workforce, the same issue will apply, as their system is also unfunded. If inflation grows to anywhere near what it theoretically should given the recent spate of "quantitaive easing", we could have a time bomb on our hands.
Tim Colgan 50+
Despite my reputation around here as a bleeding heart liberal, I actually do have a great deal of respect for entrepreneurship and appreciate it's benefits to society.
But often the greatest entrepreneurs see drastic swings in their fortunes. And if a major downswing occurs when they are nearing retirement, they can be hit hard. Having a government assured income in old age can be a great benefit. Not only is the individual protected, but, in addition, society benefits since more people would be prone to take the risks inherent in starting a business if they have a safety net.
Krisztián Pintér 200+
there is no such thing as "government assured". it is actually "government promised". promising is easy.
Tim Colgan 50+
Western societies have shown themselves capable of assuring a living wage to retired people. There is no reason why that can not continue.
Again, account based vs tax based systems have inherent problems. Better to just address the current cash flow (i.e. production flow) problems and create a workable system.
Revett Eldred 10+
I suppose in truth I have no evidence that less government is better, but seven decades of living in three different countries has somehow convinced me of the wisom of that view. Government is usually not the solution; government is usually the problem.
Krisztián Pintér 200+
police is an organization with multiple roles. supervising traffic, providing protection on streets, investigating crimes, apprehending criminals, etc. maybe some of these could be better provided by market?
what is the role of armed forces? i would say we don't need invasion force, only defense. can defense be better provided locally? can we say that guerrilla tactics are far more cost effective? are governments judge the risk correctly? does the USA need more military expenditure than the rest of the world combined?
Tim Colgan 50+
Krisztián Pintér 200+
Tim Colgan 50+
Krisztián Pintér 200+
Tim Colgan 50+
Prime model for where government might be useful. Try applying the reasoning to public health.
Krisztián Pintér 200+
neighbor issue: that's why the insurance approach is better. if i have my house insured against fire damage, the fire brigades of the insurance company will put out my neighbor's fire as well, just to protect my house. or, if they see it cheaper, they let it burn, and compensate for the damage.
Lee Wilkinson 20+
Krisztián Pintér 200+
Don Modica
Krisztián Pintér 200+