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Clearly, the fundamental argument here is about private provision of services vs. public provision of services. Is the optimal fire protection service one base
by photochemsyn 4y ago
Clearly, the fundamental argument here is about private provision of services vs. public provision of services. Is the optimal fire protection service one based on private subscriber payment to firefighters or a publicly (taxpayer or other government revenue-funded) operated fire department?
The best IMO way to view this is to first clarify whether or not that service falls into the 'natural monopoly' category, at least when it comes to basic provision of services. That category is defined by having a lack of meaningful or feasible competition, i.e. would multiple competing services result in a better outcome than a single state-run service would?
My view is that provision of fire and police services, health care and education services, water, electricity and fiber optic connectivity service, as well as the maintenance of roads, etc. generally fall into the natural monopoly sector, with caveats:
1) People should be able to augment basic services however they wish, to they extent they can afford. One can purchase a fire engine and a water tank and keep it on one's property, for example. Private security guards can be hired to augment police protection. One can hire a home nurse and expensive medical equipment, etc. Private tutors can be hired to augment a child's education.
2) State-run services should have competitive processes built in - i.e. we may have a public fire department, but the manufacture and sale of fire-fighting equipment is a competitive business and should not be monopolized, etc. Corruption in the form of fire officials giving preferential contracts to sub-par manufacturers in exchange for bribes should be a serious criminal activity, etc.
- jasonhansel 4y ago> People should be able to augment basic services however they wish, to they extent they can afford. Here's the problem with such schemes. Often both the providers and the customers of "augmenting services" will have an incentive to hollow out the state-provided service until it's substandard. For instance, let's say the government provides "basic" health insurance but allows private plans. Then the providers of private plans will lobby the government to keep the "basic" service as low-quality as possible, so that people are incentivized to buy the private plans. Furthermore, those who purchase private plans will not personally benefit much from the state-provided scheme, so they will have little interest in its success and little desire to subsidize it. In the worst case, the result is that the state-run service becomes permanently low-quality. Then people attribute this to public-sector inefficiency and say that "obviously" the free market would do a better job. Then the state-provided service gets abolished when it never had a chance to succeed.
- s1artibartfast 4y agoI think there is a distinction between a natural monopoly that people are compelled to pay for, and one which is only regulated. For regulated monopolies, there's further the distinction well if they are paid by the users of the service, or by taxes levied on the general population. When it comes to water power and electricity, I think individuals should be able to opt out if they do not want the service by the Monopoly.