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You're missing the point. What prevents them from doing exactly what I suggested? Regulation. Without some standard in place to say "Garbage must be taken to a
by beat 8y ago
You're missing the point. What prevents them from doing exactly what I suggested? Regulation. Without some standard in place to say "Garbage must be taken to a specific place", they can (and will) just take it anywhere.
Those regulations about waste management didn't happen in a vacuum. They're not just there to cause headaches or corruption. They were created in response to observed problems - like dumping trash right into rivers. And that "trash" might include really dangerous substances. Moreover, the raw profit motive of capitalism encourages such behavior. If it costs two dollars to dispose of the waste safely, or one dollar to drop it in the river, the market's response is to drop it in the river. That's just free market economics. Tragedy of the commons is an actual thing.
The economic term for this is externalizing costs. The market, on its own, is strongly motivated to externalize costs whenever possible. There's no inherent morality to economics, any more than there is an inherent morality to thermodynamics. It's just a fact of nature. But externalized costs are a form of theft - they push cost of business onto the general public, without payment. Regulations exist to keep business from stealing from the rest of us.
- AnthonyMouse 8y ago> You're missing the point. What prevents them from doing exactly what I suggested? Regulation. You may be the one missing the point. What prevents ordinary people from taking trash to the dump for $1? Regulation. > If it costs two dollars to dispose of the waste safely, or one dollar to drop it in the river, the market's response is to drop it in the river. That's just free market economics. Tragedy of the commons is an actual thing. And if it costs one dollar to dispose of the waste safely but incumbents can charge two dollars if they get a law passed to impede competition, the market's response is to get a law passed to impede competition. That's just "free" market economics. Collective action problems are a real thing. > The economic term for this is externalizing costs. The market, on its own, is strongly motivated to externalize costs whenever possible. It's also motivated to internalize benefits, which organizations do through the mechanism of regulatory capture. And those regulations exist to enable businesses to steal from the rest of us.
- beat 8y agoNothing is preventing businesses from taking trash to the dump for a buck, except unprofitability. All profit is derived from economic friction. Regulations are simply friction, in economic terms. This ideological push for friction-free, perfect competition markets that infects our political/economic thought is anti-capitalist, anti-business, and fundamentally absurd. In perfect competition, all profit margins are driven to zero. The only source of profit is barrier to entry. Read Peter Thiel. He talks about this extensively in Zero to One, and he's not some treehugging commie. In this light, regulation isn't an impediment to business - it's an opportunity. By making the task more difficult, we make it more profitable. Now, I'm sure you're anxious about some sort of corruption where businesses collude with government to lock out competition. So, tell me... what is a contract? Is it anything other than a regulatory mechanism to exclude competition? Suppose you start the BuckABucket Trash Company, and charge a buck. I hire you because you're cheap. Then you come back next week and find out I've ditched you for GayNinety Trash Company, who charges 90 cents. Sucks, right? Makes it very hard to commit capital to the business! You just bought a truck and everything. The way you prevent this behavior is by locking me into a contract - you'll take out my trash for a buck, but you get to do it for the next year. Everyone wins. I get cheap reliable trash service, you get a steady customer. Except now we've just regulated away your competition. Funny, that. Really, put down the right wing ideology feed about economics and think about how it actually works.
- AnthonyMouse 8y agoThe source of profit isn't friction, it's scarcity. Friction can create scarcity by harming competition, but that is actively harmful. In some hypothetical utopia with literally zero scarcity, nobody cares about profit because everything is free. In any real system with non-zero scarcity, profit is relative. If you have less of it in one place there is more of it in another. In the case of things like garbage collection, the other place is when consumers use the money they didn't burn on artificially wasteful trash collection to buy something else. Which benefits both the consumers and the suppliers of the other product. Creating friction on purpose to artificially increase the profits of one industry is a deadweight loss. The transfer of wealth is the broken window fallacy but the resources wasted on the artificially imposed friction are real. And many types of contract are a violation of antitrust law for exactly that reason.
- conanbatt 8y ago> You're missing the point. What prevents them from doing exactly what I suggested? Regulation. The law of private property. Thats not regulation.
- beat 8y agoRivers aren't private property. Neither is the air.