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Contract enforcement it probably the only thing everybody agrees government does well. I think a percentage of the value of the contract is a reasonable way to

by jfoutz 17y ago

Contract enforcement it probably the only thing everybody agrees government does well. I think a percentage of the value of the contract is a reasonable way to pay. If i disagree with a contractor over a $1000 fence, we can go to small claims court and sort it out. If Gigantic Manufacturer X disagrees with Retailer Y over a billion dollar contract, it's a lot more work to sort out. A five dollar lock on billion dollar asset is silly. If you choose to rely on government to protect property rights, it is ridiculous to assert that people with very little property derive the same benefit as people with lots of property. For information on non-government enforcement, watch the wire. it's a fantastic show. I don't think I can accept that those advanced financial instruments can exist without government contract enforcement. However, if you have evidence to the contrary, or even a good story I'll think about it.

hga 17y ago
I agree with your last point, but my point is that financial assets ("instruments"), starting with basic stocks and bonds, do not behave and scale in the same way that physical assets do. E.g. a company with 10x the factories of another requires on the order of 10x more governmental resources (lets assume they are of the same size, perimeter, etc.). But a company with 10x the shares of stock or 10x the outstanding bonds (in dollars) does not require 10x the courts, regulators, etc. The more companies issuing stocks and bonds the more of these resources are required, but that can in part pay for itself, as the state of Delaware has shown by providing a high quality court system for businesses. In case of malfeasance, though, the responsible company doesn't always pay for the policing it requires (e.g. Enron (dead) vs. AT&T and its breakup (all RBOCs still alive)). Someone holding assets also requires different levels of expense from the government, with the physical scaling much worse than the financial (e.g. 1 house vs. 1 million dollars vs. 15 houses vs. 15 million dollars).

by jfoutz 17y ago

hga 17y ago

I agree with your last point, but my point is that financial assets ("instruments"), starting with basic stocks and bonds, do not behave and scale in the same way that physical assets do. E.g. a company with 10x the factories of another requires on the order of 10x more governmental resources (lets assume they are of the same size, perimeter, etc.). But a company with 10x the shares of stock or 10x the outstanding bonds (in dollars) does not require 10x the courts, regulators, etc. The more companies issuing stocks and bonds the more of these resources are required, but that can in part pay for itself, as the state of Delaware has shown by providing a high quality court system for businesses. In case of malfeasance, though, the responsible company doesn't always pay for the policing it requires (e.g. Enron (dead) vs. AT&T and its breakup (all RBOCs still alive)). Someone holding assets also requires different levels of expense from the government, with the physical scaling much worse than the financial (e.g. 1 house vs. 1 million dollars vs. 15 houses vs. 15 million dollars).