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I'm advocating abolishing all regulations, including on those that prevent market entry by private actors, and then — if a public option doesn't already exist —

I'm advocating abolishing all regulations, including on those that prevent market entry by private actors, and then — if a public option doesn't already exist — subsidizing a public option until it attains dominant network effects.

eru 3y ago
I'm in general in favour of cutting regulations down. Especially industry specific regulations. (Eg banking should be regulated the same way as manufacturing of shoes.) Yes, barriers to entry should be lowered, too. A particularly fruitful way to get more competition is to invite established foreign companies to set up shop locally. I don't understand why you would want to pick a winner, the 'public option' and subsidize it? We don't even know for sure whether the industry we are looking at is actually a 'natural monopoly' until such a monopoly develops. So I would leave them alone. However, when such a monopoly develops, then you _might_ (might!) want to break out regulations. (Basically whatever makes your 'public option' the 'public' option are the kinds of regulations you just might want to break out.) The biggest useful 'regulation' I can think of is one we already mentioned: auction off the natural monopoly.
- ETH_start 3y ago
  You would want to pick a winner because the winner in some sectors will be in a position to extract economic rent, and by having it in public hands, we can ensure it either chooses not to do that, or it extracts economic rent and uses the resources to further the public interest. And by picking the winner via subsidies, you can achieve this publicly aligned winner without regulatory restrictions on competition. Any regulatory restriction on private parties violates basic liberties and thus is not justifiable IMHO. It also is a slippery slope to very destructive regulatory barriers to entry instated at the behest of incumbents. An attempt to pick the winner via subsidies also might not succeed, because even with subsidies, the public option may fail to gain significant market share. And in that case, it's fortunate that the winner wasn't subject to regulatory restrictions regimenting its behavior, as a government that is too incompetent to create a market winner via subsidies is also likely to be too incompetent to do an effective job at designing the regulatory restrictions imposed on the market leader. In short, with subsidies, all that you are risking is the subsidies themselves, in the event that they're allocated to an incompetent organization. You're not risking undermining the entire industry with dysfunctional regulatory regimentation.
  - eru 3y ago
    > You would want to pick a winner because the winner in some sectors will be in a position to extract economic rent, and by having it in public hands, we can ensure it either chooses not to do that, or it extracts economic rent and uses the resources to further the public interest. That's why you tax away the economic rent. Eg via the auction we discussed before. The rest of your comment already argues that the scenario in your first paragraph won't work?
    - ETH_start 3y ago
      I see a tax on private property as a form of regulatory restriction, on the basis that its corollary is that if you do not pay the tax, you are prohibited from participating in a certain class of voluntary economic actions and interactions using your private property.

eru 3y ago

I'm in general in favour of cutting regulations down. Especially industry specific regulations. (Eg banking should be regulated the same way as manufacturing of shoes.) Yes, barriers to entry should be lowered, too. A particularly fruitful way to get more competition is to invite established foreign companies to set up shop locally. I don't understand why you would want to pick a winner, the 'public option' and subsidize it? We don't even know for sure whether the industry we are looking at is actually a 'natural monopoly' until such a monopoly develops. So I would leave them alone. However, when such a monopoly develops, then you _might_ (might!) want to break out regulations. (Basically whatever makes your 'public option' the 'public' option are the kinds of regulations you just might want to break out.) The biggest useful 'regulation' I can think of is one we already mentioned: auction off the natural monopoly.

ETH_start 3y ago
You would want to pick a winner because the winner in some sectors will be in a position to extract economic rent, and by having it in public hands, we can ensure it either chooses not to do that, or it extracts economic rent and uses the resources to further the public interest. And by picking the winner via subsidies, you can achieve this publicly aligned winner without regulatory restrictions on competition. Any regulatory restriction on private parties violates basic liberties and thus is not justifiable IMHO. It also is a slippery slope to very destructive regulatory barriers to entry instated at the behest of incumbents. An attempt to pick the winner via subsidies also might not succeed, because even with subsidies, the public option may fail to gain significant market share. And in that case, it's fortunate that the winner wasn't subject to regulatory restrictions regimenting its behavior, as a government that is too incompetent to create a market winner via subsidies is also likely to be too incompetent to do an effective job at designing the regulatory restrictions imposed on the market leader. In short, with subsidies, all that you are risking is the subsidies themselves, in the event that they're allocated to an incompetent organization. You're not risking undermining the entire industry with dysfunctional regulatory regimentation.
- eru 3y ago
  > You would want to pick a winner because the winner in some sectors will be in a position to extract economic rent, and by having it in public hands, we can ensure it either chooses not to do that, or it extracts economic rent and uses the resources to further the public interest. That's why you tax away the economic rent. Eg via the auction we discussed before. The rest of your comment already argues that the scenario in your first paragraph won't work?
  - ETH_start 3y ago
    I see a tax on private property as a form of regulatory restriction, on the basis that its corollary is that if you do not pay the tax, you are prohibited from participating in a certain class of voluntary economic actions and interactions using your private property.