11 ms·

Structurally this practice is a lot like the preindustrial precursor of taxation, when governments would sell monopolies on the import or production of things i

by pg 14y ago

Structurally this practice is a lot like the preindustrial precursor of taxation, when governments would sell monopolies on the import or production of things in exchange for a lump sum. When obsolete government practices persist, they tend to be pretty sinister.

ajju 14y ago
Exactly. A majority of taxi drivers do not own medallions. But decades of being on a "wait list" for the right to buy one and FUD by taxi companies causes a lot of them to dislike ride sharing, when, in reality, it's a huge net win for them.
arjunnarayan 14y ago
I never made the connection to selling monopoly import licenses, but that's exactly it.
mattmanser 14y ago
Honest question, why sinister? What has happened? Another poster is claiming the unregulated Amsterdam market has been taken over by organised crime. That actually sounds sinister.
- argumentum 14y ago
  It's sinister because it pretends to be altruistic while simultaneously serving the interest of a small faction.
  - drakeandrews 14y ago
    Isn't it sinister because it's serving organised crime? Would you feel it similarly sinister if the market had been cornered by a startup (or three) with some silly name and a pile of VC debt?
argumentum 14y ago
When obsolete government practices persist, they tend to be pretty sinister. Why is this true? Perhaps keeping these practices around, despite them being obsolete, implies ulterior motives?
- vacri 14y ago
  It's something of a meaningless statement. A long-term government practice that is seen as good is not seen as obsolete.
  - argumentum 14y ago
    long-term government practice that is seen as good I've never heard of one, asides from the practices that define government itself (laws, courts, police, voting, congress etc), but these are more necessary than good.
    - vacri 14y ago
      Separation of Powers isn't necessary for government, but it is a good practice, for example. Would anyone serious call that obsolete?
      - argumentum 14y ago
        I agree, it's a good practice, intended to prevent government from assuming a whole bunch of bad practices that (unopposed) it tends to assume. But to take your point to the extreme, democracy, courts, etc are also therefore not necessary functions of government. I'd argue that they are necessary components of a good government. All the best parts of government limit the scope of government .. that says something.
        vacri 14y ago
        So take voting. Just saying 'the vote' is way too simplistic. Allowing women to vote? Good, not obsolete. Allowing minorities to vote? Good, not obsolete. Electoral college method? Facilitates sinister behaviour, obsolete. Districting rules that allow for relatively easy gerrymandering? Obsolete, and definitively sinister. Promotional materials encouraging people to exercise their rights by voting? Good, not obsolete. All the best parts of government limit the scope of government .. that says something. No it doesn't. That's an overly simplistic slogan. Provision of universal healthcare is a clear and topical example.
seanalltogether 14y ago
I've brought this up in another thread, but over in the UK, due to a lack of property taxes, its possible to purchase a home, yet stil have to pay a yearly ground rent to a private party. The cost to own land in nothing, so there's little incentive to ever sell it, and instead lease it out. People may complain about property taxes in the USA, but it prevents this very practice from happening. It would be better for everyone if the medallion system switched over to a yearly taxation/bidding system. You would lose all these middleman renters.
- argumentum 14y ago
  I don't understand .. why would you purchase a home without the land it rests on? In a free market, perhaps there is some lower price where you would do this, but there is also a higher price where you could purchase the land as well.
  - bcgraham 14y ago
    Because that's the only type of home on the market!
    - aetherson 14y ago
      Well, argumentum's point is that presumably there is some cost at which the ground holder would sell the land. Like, if the ground rental brings in $10,000 per year to the owner of the title, and I came along and said, "I will pay your $1,000,000 for the title," well... I'm offering you one century's worth of ground-use fees up-front. Presumably all but the most irrational actors would sell their ground.
      - vacri 14y ago
        Of course, but that's nitpicking. The point is that the price is well out of reach of the average Tom.
        aetherson 14y ago
larrys 14y ago
"When obsolete government practices persist, they tend to be pretty sinister." How might you propose to compensate people who, in good faith, bought taxi medallions (a legal practice)? (Or do you feel that's not necessary?)
- rhizome 14y ago
  Here in SF they are illegal to sell and must be issued to a person (not a company). People get on the waiting list, get their turn, then rent them to taxi companies for (I believe) ~$100K/yr. Many medallion owners have not driven a cab in years, or never have.
- schiffern 14y ago
  The article said it pretty well. >So, medallion holders speculated in holding a government asset and lost. Some of these people are also taxi drivers or operators of taxi dispatch companies. Like Greek bondholders, they gambled and lost big.
  - larrys 14y ago
    "So, medallion holders speculated" Don't agree with that at all that is what the article says. (It doesn't match up with my definition either based on my years of business experience either.) Definition of "speculation" from investopedia: "The act of trading in an asset, or conducting a financial transaction, that has a significant risk of losing most or all of the initial outlay, in expectation of a substantial gain." Based on history there is no reason to believe that the purchase of a taxi medallion could result reasonably in losing "most or all" of the initial outlay. (Unless of course you decided to buy one while ignoring the current events going on of course). http://www.investopedia.com/terms/s/speculation.asp http://www.investopedia.com/terms/s/speculation.asp Of course you can make any investment or purchase speculative depending on how much of a chance you want to take. If you decide to get in on an up and coming area in real estate (a run down area that you hope will change over the course of many years) that could easily be seen as speculation. Otoh, buying a condo in a well established neighborhood that has a history would not be seen as speculation which is not the same as saying that you bought because you felt that the value could double and if that doesn't happen you may feel you have "lost" something (the high gain you expected). Even in the case of eminent domain taking of property for public good the property owners are compensated somewhat fairly for the loss of value of their property. The government doesn't come along and say "hey we need this area for a road sorry guys to bad it happened to you". I would go further to say that these medallion owners would band together and at least attempt to do whatever they could legally to find a way to prevent something like this from happening if they could. Why? There is enough money involved to pay lawyers to muck up the process or delay it (just like with eminent domain, people even if there is compensation, will do that.)
jonnathanson 14y ago
See also: liquor licenses, various types of zoning permits, etc. In certain states and cities with especially draconian licensing systems and quotas, the aftermarkets for permits and licenses tend to get ridiculous. Not quite as ridiculous as taxi medallions, but pretty ridiculous nonetheless. (Liquor licenses in certain parts of California have broken the $200,000 mark at auction, for instance).
- jcampbell1 14y ago
  In healthcare many states require "Certificates of Need", before building any healthcare facilities or even buying equipment. I think it is cost control by granting monopolies. If you eliminate competition, the providers will be able to operate more efficiently and lower costs... I kid you not, this is the explanation.
meric 14y ago
"governments would sell monopolies on the import or production of things in exchange for a lump sum" Still happens: http://www.smh.com.au/nsw/port-leases-garner-5-billion-windfall-for-state-government-20130412-2hq7k.html http://www.smh.com.au/nsw/port-leases-garner-5-billion-windf...

by pg 14y ago

ajju 14y ago

Exactly. A majority of taxi drivers do not own medallions. But decades of being on a "wait list" for the right to buy one and FUD by taxi companies causes a lot of them to dislike ride sharing, when, in reality, it's a huge net win for them.

arjunnarayan 14y ago

I never made the connection to selling monopoly import licenses, but that's exactly it.

mattmanser 14y ago

Honest question, why sinister? What has happened? Another poster is claiming the unregulated Amsterdam market has been taken over by organised crime. That actually sounds sinister.

argumentum 14y ago
It's sinister because it pretends to be altruistic while simultaneously serving the interest of a small faction.
- drakeandrews 14y ago
  Isn't it sinister because it's serving organised crime? Would you feel it similarly sinister if the market had been cornered by a startup (or three) with some silly name and a pile of VC debt?

argumentum 14y ago

When obsolete government practices persist, they tend to be pretty sinister. Why is this true? Perhaps keeping these practices around, despite them being obsolete, implies ulterior motives?

vacri 14y ago
It's something of a meaningless statement. A long-term government practice that is seen as good is not seen as obsolete.
- argumentum 14y ago
  long-term government practice that is seen as good I've never heard of one, asides from the practices that define government itself (laws, courts, police, voting, congress etc), but these are more necessary than good.
  - vacri 14y ago
    Separation of Powers isn't necessary for government, but it is a good practice, for example. Would anyone serious call that obsolete?
    - argumentum 14y ago
      I agree, it's a good practice, intended to prevent government from assuming a whole bunch of bad practices that (unopposed) it tends to assume. But to take your point to the extreme, democracy, courts, etc are also therefore not necessary functions of government. I'd argue that they are necessary components of a good government. All the best parts of government limit the scope of government .. that says something.
      - vacri 14y ago
        So take voting. Just saying 'the vote' is way too simplistic. Allowing women to vote? Good, not obsolete. Allowing minorities to vote? Good, not obsolete. Electoral college method? Facilitates sinister behaviour, obsolete. Districting rules that allow for relatively easy gerrymandering? Obsolete, and definitively sinister. Promotional materials encouraging people to exercise their rights by voting? Good, not obsolete. All the best parts of government limit the scope of government .. that says something. No it doesn't. That's an overly simplistic slogan. Provision of universal healthcare is a clear and topical example.

seanalltogether 14y ago

I've brought this up in another thread, but over in the UK, due to a lack of property taxes, its possible to purchase a home, yet stil have to pay a yearly ground rent to a private party. The cost to own land in nothing, so there's little incentive to ever sell it, and instead lease it out. People may complain about property taxes in the USA, but it prevents this very practice from happening. It would be better for everyone if the medallion system switched over to a yearly taxation/bidding system. You would lose all these middleman renters.

argumentum 14y ago
I don't understand .. why would you purchase a home without the land it rests on? In a free market, perhaps there is some lower price where you would do this, but there is also a higher price where you could purchase the land as well.
- bcgraham 14y ago
  Because that's the only type of home on the market!
  - aetherson 14y ago
    Well, argumentum's point is that presumably there is some cost at which the ground holder would sell the land. Like, if the ground rental brings in $10,000 per year to the owner of the title, and I came along and said, "I will pay your $1,000,000 for the title," well... I'm offering you one century's worth of ground-use fees up-front. Presumably all but the most irrational actors would sell their ground.
    - vacri 14y ago
      Of course, but that's nitpicking. The point is that the price is well out of reach of the average Tom.
      - aetherson 14y ago

larrys 14y ago

"When obsolete government practices persist, they tend to be pretty sinister." How might you propose to compensate people who, in good faith, bought taxi medallions (a legal practice)? (Or do you feel that's not necessary?)

rhizome 14y ago
Here in SF they are illegal to sell and must be issued to a person (not a company). People get on the waiting list, get their turn, then rent them to taxi companies for (I believe) ~$100K/yr. Many medallion owners have not driven a cab in years, or never have.
schiffern 14y ago
The article said it pretty well. >So, medallion holders speculated in holding a government asset and lost. Some of these people are also taxi drivers or operators of taxi dispatch companies. Like Greek bondholders, they gambled and lost big.
- larrys 14y ago
  "So, medallion holders speculated" Don't agree with that at all that is what the article says. (It doesn't match up with my definition either based on my years of business experience either.) Definition of "speculation" from investopedia: "The act of trading in an asset, or conducting a financial transaction, that has a significant risk of losing most or all of the initial outlay, in expectation of a substantial gain." Based on history there is no reason to believe that the purchase of a taxi medallion could result reasonably in losing "most or all" of the initial outlay. (Unless of course you decided to buy one while ignoring the current events going on of course). http://www.investopedia.com/terms/s/speculation.asp http://www.investopedia.com/terms/s/speculation.asp Of course you can make any investment or purchase speculative depending on how much of a chance you want to take. If you decide to get in on an up and coming area in real estate (a run down area that you hope will change over the course of many years) that could easily be seen as speculation. Otoh, buying a condo in a well established neighborhood that has a history would not be seen as speculation which is not the same as saying that you bought because you felt that the value could double and if that doesn't happen you may feel you have "lost" something (the high gain you expected). Even in the case of eminent domain taking of property for public good the property owners are compensated somewhat fairly for the loss of value of their property. The government doesn't come along and say "hey we need this area for a road sorry guys to bad it happened to you". I would go further to say that these medallion owners would band together and at least attempt to do whatever they could legally to find a way to prevent something like this from happening if they could. Why? There is enough money involved to pay lawyers to muck up the process or delay it (just like with eminent domain, people even if there is compensation, will do that.)

jonnathanson 14y ago

See also: liquor licenses, various types of zoning permits, etc. In certain states and cities with especially draconian licensing systems and quotas, the aftermarkets for permits and licenses tend to get ridiculous. Not quite as ridiculous as taxi medallions, but pretty ridiculous nonetheless. (Liquor licenses in certain parts of California have broken the $200,000 mark at auction, for instance).

jcampbell1 14y ago
In healthcare many states require "Certificates of Need", before building any healthcare facilities or even buying equipment. I think it is cost control by granting monopolies. If you eliminate competition, the providers will be able to operate more efficiently and lower costs... I kid you not, this is the explanation.

meric 14y ago

"governments would sell monopolies on the import or production of things in exchange for a lump sum" Still happens: http://www.smh.com.au/nsw/port-leases-garner-5-billion-windfall-for-state-government-20130412-2hq7k.html http://www.smh.com.au/nsw/port-leases-garner-5-billion-windf...