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That sounds a bit off. Presumably something is worth more to you than what you pay for it -- otherwise you wouldn't buy it. If someone drives up the price of so

That sounds a bit off. Presumably something is worth more to you than what you pay for it -- otherwise you wouldn't buy it. If someone drives up the price of something by making it artificially scarce, its value to you hasn't gone up; the only thing that has gone up is the purchase price, which has been brought closer to the subjective value you place on it, reducing your gain from the trade. (Also it's not obvious to me what this has to do with libertarianism, at least of the sort discussed in this book.)

visualradio 5y ago
If there are 5 wells and an owner of 1 well poisons 4 of them, they are able to charge more for the remaining clean water, and possibly acquire money for a commodity which was previously available for free, by increasing scarcity. In a private government concerned only with maximization of income of its owners or investors such pathological outcomes are possible. In the U.S. idea of a republic it is usually thought there should be a public government concerned with the maximization of happiness of residents, something which many libertarians or anarcho-capitalists do not agree with.
- unishark 5y ago
  In page 60 or so the document talks about how to impose laws and security without a govt. There's also a section on non-government approaches to make polluters pay. Presumably the owner of the well would end up much poorer for their actions than when they started.
- BurningFrog 5y ago
  Destroying other people's property is bad, yes.
nonameiguess 5y ago
This is called consumer's surplus, where there is a single market clearing price but the subjective value placed on a good by each consumer is not actually that exact price, so those who place greater value receive a surplus. There is also producer's surplus, as the producer may have been perfectly willing to sell for a lower price, but the market clearing price happened to be higher than that. This is why companies often attempt to engage in some form of customer segmentation or price discrimination, to take some of that consumer surplus and capture more of it as producer's surplus. The entire basis of welfare economics and the ethical argument in favor of markets at all is that, at least under conditions of pure competition and in the absence of externalities, market clearing prices will always settle on a Pareto optimal point where the net surplus of all parties to the transaction is maximized. We obviously don't actually have those conditions, but what Dr. Friedman is attempting to do is figure out from theory and history ways we might be able to via better systems of law and property than what we currently have. He is actually a frequent commenter on Scott Alexander's blog and has been for a decade, and is quite a joy to read and converse with. His arguments are well researched, well backed, and compelling. The only blind spot seems to be with respect to climate, where he continues to assert that we cannot even know whether the sign of the change will be negative at all as equatorial regions become unlivable but tundras fertile, which is maybe true over a long enough span of time, but seems to me like saying we cannot know for sure Thanos isn't right and killing off the half the population now won't make the world better off in a thousand years and forever thereafter. It doesn't seem like a good argument in favor of letting it happen.

visualradio 5y ago

If there are 5 wells and an owner of 1 well poisons 4 of them, they are able to charge more for the remaining clean water, and possibly acquire money for a commodity which was previously available for free, by increasing scarcity. In a private government concerned only with maximization of income of its owners or investors such pathological outcomes are possible. In the U.S. idea of a republic it is usually thought there should be a public government concerned with the maximization of happiness of residents, something which many libertarians or anarcho-capitalists do not agree with.

unishark 5y ago
In page 60 or so the document talks about how to impose laws and security without a govt. There's also a section on non-government approaches to make polluters pay. Presumably the owner of the well would end up much poorer for their actions than when they started.
BurningFrog 5y ago
Destroying other people's property is bad, yes.

nonameiguess 5y ago

This is called consumer's surplus, where there is a single market clearing price but the subjective value placed on a good by each consumer is not actually that exact price, so those who place greater value receive a surplus. There is also producer's surplus, as the producer may have been perfectly willing to sell for a lower price, but the market clearing price happened to be higher than that. This is why companies often attempt to engage in some form of customer segmentation or price discrimination, to take some of that consumer surplus and capture more of it as producer's surplus. The entire basis of welfare economics and the ethical argument in favor of markets at all is that, at least under conditions of pure competition and in the absence of externalities, market clearing prices will always settle on a Pareto optimal point where the net surplus of all parties to the transaction is maximized. We obviously don't actually have those conditions, but what Dr. Friedman is attempting to do is figure out from theory and history ways we might be able to via better systems of law and property than what we currently have. He is actually a frequent commenter on Scott Alexander's blog and has been for a decade, and is quite a joy to read and converse with. His arguments are well researched, well backed, and compelling. The only blind spot seems to be with respect to climate, where he continues to assert that we cannot even know whether the sign of the change will be negative at all as equatorial regions become unlivable but tundras fertile, which is maybe true over a long enough span of time, but seems to me like saying we cannot know for sure Thanos isn't right and killing off the half the population now won't make the world better off in a thousand years and forever thereafter. It doesn't seem like a good argument in favor of letting it happen.