What do you mean by ‘the government can improve on the market outcomes by facilitiating the flow of information’? Does it have to be ‘the government itself’? You say; ‘let’s ignore public choice’, but why should we ignore them public choice arguments about information and incentive and not the market inefficiencies? That kind of policy advocacy in a vacuum isn’t legitimate scientific investigation, imo. Ceteris Paribus as a tool to analyze stuff is justified, but this seems to be an illegitimate use of it.
Another problem; why should it be the government? There is an argument that institutions might arise to facilitate information - and they have - within the market process, if there estimated marginal cost and estimated marginal benefit are worth it. ‘The government’ doesn’t work with such an system and could, in fact, ‘oversupply’ information - even if we disregard the ‘public choice’ arguments. This is because - wait for it - the government can’t calculate. Surprise, surprise!
Institutions and mechanisms to facilitate trade have grown in an enormous amount of diversity; but all arise within a framework of the overall mechanism of the price mechanism: to see wether or not it’s worth it.
Can someone show me one time post 3500 BC that there has been no government intervention in the market, none, nothing direct, nor indirect?
I’m gona say intervention is not the problem, autocratic intervention is. I think Esuric posted earlier about how Hayek (I think) even said there’s no problem with market regulators inherently (rating agencies, consumer reports, etc). It’s giving someone the final say on completely subjective matters.
What is an economy that does not have government intervention? If it has never existed, how can one say it can only be market or government? It seems like it is usually/always market and government.
Just an economy. The market, voluntary exchange between individuals, does not require a coercive entity to function. Markets, and voluntary exchange, pre-existed before over-arching states. Market activity is a function of human action and human nature. It is an innate behavior of every man.
On the other hand it is not clear that theft and violence are innate features of every man. Sure you could argue it is with some, but you would be hard pressed to prove that it applies to all men equally. Human action on the other hand indisputably does. So you see, the two are not related.
For those that either do not understand the calculation argument or that think it’s not an issue. Here is an off the wall question for you. What do you think the market rate for police protection should be? And are we somewhere in that ballpark? Is it even feasibly possible to tell? Might the pricing structure be different if police protection was provided on the market?
What implications does that mean for resource redistribution, and protection.
B) Even if we conceded your point, which I don’t, you still have to solve the calculation problem with government. Whether protection can hypothetically be provided without government is irrelevant. It’s a complete red-herring. The point is, how do you calculate with government. The question has nothing to do with hypothetical situations in the absence of government. The best thing you can do Scineram, as a pro statist, is to crack the calculation problem. Shying away from the problem only grants further evidence that it’s an issue that statists can never solve.
Sad that no one else has tried to answer the question.
The same way everybody calculates. You use your judgement to balance between negative effects of taxes, the demands of police personnel, the demand of the public for protection and the extent of police repression and civil rights abuse. As it has always been done.
THe problem of ‘calculation’ is not a completely identical problem for a minimal government (or a government in a welfarestate) as the calculation problem within a socialist society. This analogy is not warranted.
The problem within a socialist society is the complete absence from any market for production goods. Within a minimal state - or welfare state - the problem is a question of (1) how much money and (2) what is the exact wishes of the people. But it’s still possible to calculate - given a certain amount of money that the government wishes to use - the most efficient amount of protection as judged by the government itself. This is, however, possible in a socialist society.
So your saying that the state calculates the distribution of goods the same way as walmart? Walmart who competes for consumers, and the State who gets all consumers by default are the same?
How do you tell what the demand for police personnel is? And since your using taxes to pay for this, you already have all citizen’s as a consumer by default. So how do you know what the naturally occurring rate of protection would be at? IE How much SHOULD be spent on police protection? How many scarce resources SHOULD we spare were it not coercively distributed? How can you tell when you are spending too much in police protection in some area’s, and not enough in others, as judged by the demand of citizen’s.
The price mechanism only functions in situations where goods are competed for in a voluntary exchange environment. Not in a coerced environment. In this way we can draw metrics based on price to read factors such as supply and demand.
Your saying that somehow we can do this, even though every citizen by default is a subscribing customer. But how does the state know when it does good or bad, there is never an increase or decrease in subscribers. It measure’s it’s success not based on consumer satisfaction, but using non-relevant metrics like how many homocide’s happened this month as compared to last. Such metric’s are non-sequiturs of consumer satisfaction. They indirectly measure performance. Services to individuals are measured in metrics of satisfaction, other metric’s outside of that are just indirect metrics used to help bolster consumer satisfaction. It doesn’t follow that the police agency are still providing a service in such a way that the citizen is happy about it. In fact in most cases people are apprehensive at best regarding police protection in this country. They just haven’t been shown any viable alternatives yet.
So you haven’t magically solved the calculation problem. If you had we could abandon the market all together, and provide all goods as we provide police protection. As LS stated there is no third option. Either you conceded that the market works, or you do not. If you choose a middle ground your abandoning any argument you once had, and tainted your integrity.
The difference is a matter of degree, not kind. The socialist system is the destruction of all economic calculation. The welfare state yields inept and monstrous calculations that are divorced from subjective consumer preferences. The fact that some calculation is possible in a welfare state does not mean that it avoids the calculation and coordination arguments put forth by Hayek and Mises (and in fact Bohm-Bawerk). In fact, the former makes the far broader argument against government interventionism.
Adrian, even in situations where we do not have total socialism the price mechanism is still tampered with and influenced. The calculation problem still exists, only to a different degree. Business cycles for example are a type of economic mis-calculation. I wrote about this a long time ago, perhaps you’d be of interest.
So you would have to attempt to answer my questions above, as to how the state knows how much resources to allocate to police protection, and how do they know when they are pleasing consumers?
As I stated above, these are second hand metrics and do not address consumer satisfaction. Whether or not there were more or less homocides last month does not say specifically how satisfied the citizen’s are with the police agency’s performance. Your conflating crime statistics with consumer satisfaction.
What exactly between pointing out the differences between the formation of prices on a market, vs the arbitrary assignment of prices by government is meaningless?
This was answered in my previous post, and repeated above. Looking at your crime levels and talking to your police personell are second hand statistics. Statistics that consumers may not even be interested in. Like, how many traffic sitations did we enforce this month, as opposed to something more important in the consumers eyes. Do not conflate arbitrary statistics with metrics of consumer satisfaction.
So you agree then that the state has no other means of figuring out how best to serve it’s customers, other then blatant guesswork? I’d agree with you, this is the point I am making. Despite this fact you still advocate this system over the price mechanism provided on a market.
On the other hand private parties have direct outputs with which to measure by, to determine the effectiveness of various actions taken.
A) Who are you to judge, on behalf of society, what actions police enforcement should perform for the benefit of “society”. Who are you to say that protection against homocide is more important than anything else? Why are you the single arbiter of this opinion? When you make such a bold claim your attempting to play god, on behalf of society. Your in effect projecting your subjective valuation on the masses. Your statement necessarily implies that protection of homocide is more important than general freedom.
B) If homocide rates, and preventing them, are more important than consumer satisfaction. Why don’t we just lock everyone up in a camp? Ball and chain them to their beds? Feed them when they need it. Guarantee 0 homicide rates. Who cares what the citizen thinks about it right? So long as homicide rates are low. If homocide rates are your key goal, there are more effective ways of accomplish this.
These are the directions you take when you move away from individual satisfaction, to matching the satisfaction of a single individual, such as yourself. Then compelling society to adher to your personal beliefs on the matter.
This fallacy fallacy ignores praxeology all together and pretends that your ideals are of greater value then others. To place an arbitrary statistic above consumer satisfaction, like placing homocide rates above consumer satisfaction, is to direct the production of defense in a direction that does not best meet the desires of individuals. If its not our goal to create the highest level of satisfaction for individuals, why bother to have an economy at all? There are a number of abusive ways to ensure no homocide. You sound as if you’d endorse that.
C) Homocide rates can simply fluctuate up and down due to external factors. That doesn’t necessarily mean that police agencies are performing any better or worse. The best judge of an agency’s performance is to have it judged not by one single bias arbiter(the state) but by thousands of individual judges(consumers). Each consumer making their own assessment and endorsing agency’s which in their minds perform the best.
The market works great, except…
So as LS stated. Your a free market capitalst, except when it involves an area that you are personally apprehensive about.
Your unprincipled inconsistency is why your argument fails. You advocate isolated socialism.
So we still have several un-answered questions. You agreed that the state performs simple guesswork on its performance levels. I maintain my questions as un-answered.
How many scarce resources should be allocated to ensure proper defense(According to you, if preventing homicide is the highest ideal, we should be allocating a vast percentage more of our productive output into creating a police state. Ensuring such a degree of no homicide necessarily will mean sacrificing various freedoms)(What supply should be created?)
Which areas should receive these resources? Which areas should recieve the least?(Where is the demand at?)
How much should we tax to pay for this? (Where’s the price mechanism?)
Whats the most effecient way of producing defense(Where is the competition, and entrepreneurial innovative discovery?)
Businesses and enterpreneurs assign prices arbitrarily.
The market mechanism is guesswork.
A) Who are you to judge, on behalf of society, what actions police enforcement should perform for the benefit of “society”. Who are you to say that consumer satisfaction is more important than anything else? Why are you the single arbiter of this opinion? When you make such a bold claim your attempting to play god, on behalf of society. Your in effect projecting your subjective valuation on the masses. Your statement necessarily implies that consumer satisfaction is more important than general freedom.
What good would that be?
Then don’t compell society to anarchocapitalism!
It would if I gave a shit about principles. I am with Mises, standing for reality and practice.
There are no exact anwers. But you do ignore all the nonmarket feedback mechanisms for producers. Nirvana fallacy, that is.