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Not everything needs to be done for purely economic purposes - that includes the creation and maintenance of transportation networks. Societies are free to have

Not everything needs to be done for purely economic purposes - that includes the creation and maintenance of transportation networks. Societies are free to have broader sets of objectives.

ETH_start 3y ago
Of course. I was pushing back against the claim in the original post, which argued for socializing transportation costs on economic grounds: >Transportation is a service that's critical to economic function. Transportation is not amongst the subset of goods/services where having individual market actors pay for its production leads to economically sub-optimal under-production. Whether transportation should be subsidized for other reasons is an entirely different subject.
- RandomLensman 3y ago
  I am a bit less convinced about the "optimalities" in practice, because differences in funding costs, risk preferences etc. can lead to inefficiencies in the real world that a state actor could bridge.
  - ETH_start 3y ago
    >>because differences in funding costs, risk preferences etc. can lead to inefficiencies in the real world that a state actor could bridge. I don't understand, could you elaborate?
    - RandomLensman 3y ago
      For example: corporations have a lot of secondary objectives beyond profit such as limited volatility of profits that can suppress beneficial activities. State actors can take different risks and absorb such volatility by funding activities and then recovering via taxes (simplistically). In the financial markets this gets often arbitraged away, but in slow and high cost markets, those arbitrageurs aren't necessarily forming. Similarly, time preferences can stop long-term beneficial activities by corporate actors. In the end, it is about bridging different preferences. There are also issues of resource pooling and coordination, but those are easier to overcome.
      - ETH_start 3y ago
        Yes, market friction like what you note is possible. But in theory, those points of friction and inefficiency can be overcome by the market with innovations in financial instruments.

Not everything needs to be done for purely economic purposes - that includes the creation and maintenance of transportation networks. Societies are free to have broader sets of objectives.

ETH_start 3y ago

Of course. I was pushing back against the claim in the original post, which argued for socializing transportation costs on economic grounds: >Transportation is a service that's critical to economic function. Transportation is not amongst the subset of goods/services where having individual market actors pay for its production leads to economically sub-optimal under-production. Whether transportation should be subsidized for other reasons is an entirely different subject.

RandomLensman 3y ago
I am a bit less convinced about the "optimalities" in practice, because differences in funding costs, risk preferences etc. can lead to inefficiencies in the real world that a state actor could bridge.
- ETH_start 3y ago
  >>because differences in funding costs, risk preferences etc. can lead to inefficiencies in the real world that a state actor could bridge. I don't understand, could you elaborate?
  - RandomLensman 3y ago
    For example: corporations have a lot of secondary objectives beyond profit such as limited volatility of profits that can suppress beneficial activities. State actors can take different risks and absorb such volatility by funding activities and then recovering via taxes (simplistically). In the financial markets this gets often arbitraged away, but in slow and high cost markets, those arbitrageurs aren't necessarily forming. Similarly, time preferences can stop long-term beneficial activities by corporate actors. In the end, it is about bridging different preferences. There are also issues of resource pooling and coordination, but those are easier to overcome.
    - ETH_start 3y ago
      Yes, market friction like what you note is possible. But in theory, those points of friction and inefficiency can be overcome by the market with innovations in financial instruments.