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His argument is not that it costs more to run Google Reader than there is benefit, so we need the government to run it. His argument is that the benefit to soci
by teebs 14y ago
His argument is not that it costs more to run Google Reader than there is benefit, so we need the government to run it. His argument is that the benefit to society of Google Reader is greater than the cost to society of Google Reader. Outside of a free market, it is better for society to have Google Reader. Unfortunately, there is no price structure that allows Google Reader to exist as a for-profit service. The market is inefficient, and the government should step in to fix this inefficiency. Therefore, it might be useful to run some services like Google Reader as government services.
I think that Google Reader should not be government-run, but he raises a larger point. There could be some internet services that would be better run by the government, and we don't really have any today. I don't think we can dismiss that possibility. I can't think of any sites like that right now, though.
- liber8 14y agoRight, that's what he's saying. He believes that a certain good makes society better off. And yet, the pricing mechanism, the fundamental underpinning of capitalism, shows otherwise. (I'm speaking obliquely about Reader, but more broadly about nearly everything technocrats love that people aren't willing to pay the full cost of.) You can argue that this reasoning is flawed (people aren't rational!), but the results are hard to argue with. The market does a fabulous job of allocating resources. Individuals, no matter how smart, don't.
- _stephan 14y agoPlease read up on public goods, natural monopolies and externalities before you claim that the capitalistic market outcome always reflects what a good is worth to society.
- canes123456 14y agoDespite its problems, it is the best system we have. What is a better, asking krugman?
- Gormo 14y ago> people aren't rational! As an aside, I'll point out that this is essentially meaningless as a critique of free-market economics, since people's actual behaviors are the only viable external indicators of their underlying preferences that we have, so the only reasonable conclusion to draw from the observation of allegedly "irrational" behavior is that the hierarchy of values motivating that behavior isn't what we expected it to be. In other words, since all human behavior is a product of underlying motivations, the behavior itself can't contradict the actual existing motivations, but can only contradict others' erroneous assumptions about what those motivations were; all economic activity is therefore rational by definition. With this in mind, the whole debate regarding the rationality of economic actors becomes nonsensical; the critique is an attempt to falsify a tautology.