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On a systemic level, what advantages does government provide to solving these various problems that private individuals couldn't? Beyond blindly asserting that

On a systemic level, what advantages does government provide to solving these various problems that private individuals couldn't? Beyond blindly asserting that "there simply was no practical alternative to government regulation", or citing historical examples of government projects (when private alternatives were not legally allowed!) like roads, please explain what fundamentally allows government to perform these tasks better. VC money more often comes from highly successful past ventures, not grandma's retirement savings plan (which are terrible investments anyway). How many ex-Facebook equity holders are building their own companies? How many ex-Paypal before them? It's simply dishonest to attribute Silicon Valley's wealth to DC and the Fed's easy money. Most of that money heads to Wall Street, the most government regulated industry in existence, fueling rampant corruption with examples too numerous to list. The inflation the easy money inevitably brings causes the average middle-class investor to invest greater and greater portions of their income into the markets and their retirement accounts, feeding Wall Street account managers, the federal government, and ultimately, the bubble-prone stock market these investors need just to break even on their savings. Silicon Valley does not need DC, it is hindered by DC. The democratic, lobby-based, "law-for-sale" system is systemically disadvantaged to the classic survival of the adaptable. While the Valley develops our next innovations, DC puts bandages on debt limits while the other powers of the world seek reserve alternatives to our hemorrhaging currency. Please, do not talk about government success. It does not exist.

rayiner 13y ago
> On a systemic level, what advantages does government provide to solving these various problems that private individuals couldn't? Private action in a free market suffers from numerous issues: free rider problems, collective action problems, problems involving positive and negative externalities, problems involving information asymmetries, etc. These are well-developed areas of economics that libertarian-minded policy folks tend to ignore, but which simply cannot be ignored. Most government programs, from environmental protection (negative externalities) to Social Security (irrational hyperbolic discounting), are rooted in one of these economic phenomena. > VC money more often comes from highly successful past ventures, not grandma's retirement savings plan (which are terrible investments anyway) See the sibling comment about private equity fundraising after changes in ERISA. Some VC money does come from people taking money from past ventures and putting them into new ones. But the bread and butter of VC involves raising money from limited partners, specifically pension funds, mutual funds, etc. The other major sources tend to be endowments, banks, insurance companies, and sovereign wealth funds. See: http://fisher.osu.edu/supplements/10/12707/LPReturnsJanuary2013.pdf http://fisher.osu.edu/supplements/10/12707/LPReturnsJanuary2... (p. 1).
- clienthunter 13y ago
  You know whenever I see spats like this I feel compelled to point that governments cause such profound economic distortion that we really can't speak of what a 'free' society would be actually be like - it's so far removed from anything humanity has known in a very long time. We're all (more or less) coders here, right? What happens when we tinker with a big, complex, undocumented system that nobody really understands? Government as a concept isn't so much tinkering as it is a blindfolded child refactoring by typing with his elbows.
  - rayiner 13y ago
    The economy is itself a distortion caused by government. In the state of nature there are no economies because as soon as you accumulate a little capital someone clubs you on the head and takes it away. This is why most libertarians are of the statist variety. They talk about the economic distortion caused by government, but what they mean is the distortion caused by the parts of government they don't like (I.e. besides the police, courts, etc). This is a perfectly fine position, but is susceptible to the economic arguments I listed.
    - clienthunter 13y ago
      As an economist I assure you that if I noted a correlation between head clubbing and capital accumulation I would take offensive and defensive steps to protect my head. In fact most would, leading to a nice little equilibrium where head clubbing is not a worthwhile strategy. They may even form a protection racket, and call it "Police". Economics is not the study of capital, it's the study of trade - which incidentally is so natural we even observe it in the animal kingdom. Few libertarians would deny the need for at least occasional collaboration, but that is not the same as government. Governments are universally wasteful of resources, susceptible to corruption, resistant to changing needs, and have a nasty habit of claiming absolute moral authority on things...which in turn has a nasty tendency to start wars. It is, objectively, a limiting and archaic system that does us all a great deal of damage.
      - 13y ago
deleted 13y ago
[deleted]
agorabinary 13y ago
> free rider problems, collective action problems, problems involving positive and negative externalities, problems involving information asymmetries, etc. The usual statist objections to pure market action are total myths, not to mention weak and tangential objections. I'd love to argue the market with a hardline Marxist because at least they take a true thrust at market action rather than just nibbling. >free rider, externalities How is it a problem to anyone that a persons actions benefit others without deriving some monetary value for the benefit? No one is coerced, no rights violated. This is the only standard for judging these matters. No person should be forced to pay for a benefit for a transaction they did not agree to. Collective defense, for example, does not suffer because some people don't pay to play --- forcing equal patronage only serves to undermine the entire relationship between buyer and seller. More: http://mises.org/daily/2769 http://mises.org/daily/2769 >collective action Kickstarter. >Information assymetries Information is a value that is open on the market, as all values are. Not sure if the product your buying is safe? Buy insurance for it. Or, take the time to do your research and make comparisons. That time spent has a value. Decide which you are willing to give up: that time, or the cost of the insurance. Value is a dynamic and multifaceted concept. http://mises.org/daily/1135 http://mises.org/daily/1135
- rayiner 13y ago
  > The usual statist objections to pure market action are total myths The usual libertarian objections to modern economics are usually wishful thinking.
  - glenra 13y ago
    Much of modern economics directly inspires libertarian objections to state action. (Krugman and his acolytes notwithstanding.) I tend to think of libertarians as "liberals who learned economics".
- agorabinary 13y ago
  There's nothing more wishful than hoping the watchers do their jobs, without watchers themselves. Ad infinitum.
dragonwriter 13y ago
> Silicon Valley does not need DC, it is hindered by DC Then why doesn't Silicon Valley exist in some place without an effective government?
- clienthunter 13y ago
  They are trying... https://blueseed.co/ https://blueseed.co/
  - dragonwriter 13y ago
    "A startup is trying to sell idea X" and "Silicon Valley is trying X" are not equivalent. And even Blueseed has, as part of its pitch: Silicon Valley is the best place in the world to scale a company, and once you’re large enough there are legal channels available to move into Silicon Valley proper. We will provide you with the resources and contacts you need to make the transition. [1] https://blueseed.co/quick-facts/ https://blueseed.co/quick-facts/
    - clienthunter 13y ago
      Perhaps not, but it does get a point across that I don't imagine anyone had trouble interpreting. Minutiae aside (it was a short post for a reason), the fact this idea is not considered crazy and has a bit of traction is extremely relevant to the discussion as a whole.
      - dragonwriter 13y ago
        > the fact this idea is not considered crazy and has a bit of traction is extremely relevant to the discussion as a whole. Does it? As I see, the idea is choosing a location to take maximum advantage of the benefits of Silicon Valley including those provided by government while avoiding particular restrictions, particularly related to immigration, related to government. Insofar as hacking government -- which this is -- being considered a potentially-viable startup proposition is relevant to the discussion, its relevant as evidence that government has utility to Silicon Valley even though it poses constraints, not evidence that Silicon Valley doesn't need government. (And, while I think that it is a fact that the idea "has some traction", I'm less convinced that it is a fact that it is "not considered crazy". An idea can be considered crazy and have some traction.)
saraid216 13y ago
> The democratic, lobby-based, "law-for-sale" system is systemically disadvantaged to the classic survival of the adaptable. Odd, I was reading a history book the other day and took note of this passage: "The other wrong lesson [the philosopher William James] thought people took from On the Origin of Species is, in effect, the flip side of the first. It is the belief that evolutionary science can lay a foundation for norms–that natural selection serves as a kind of "bottom-line" arbiter of merit. This is the doctrine of "the survival of the fittest," .... It makes the logic of evolution the logic of human values: it suggests that we should pursue policies and honor behavior that are consistent with the survival of characteristics understood to be "adaptive," and it justifies, as "natural," certain kinds of coercion."

rayiner 13y ago

> On a systemic level, what advantages does government provide to solving these various problems that private individuals couldn't? Private action in a free market suffers from numerous issues: free rider problems, collective action problems, problems involving positive and negative externalities, problems involving information asymmetries, etc. These are well-developed areas of economics that libertarian-minded policy folks tend to ignore, but which simply cannot be ignored. Most government programs, from environmental protection (negative externalities) to Social Security (irrational hyperbolic discounting), are rooted in one of these economic phenomena. > VC money more often comes from highly successful past ventures, not grandma's retirement savings plan (which are terrible investments anyway) See the sibling comment about private equity fundraising after changes in ERISA. Some VC money does come from people taking money from past ventures and putting them into new ones. But the bread and butter of VC involves raising money from limited partners, specifically pension funds, mutual funds, etc. The other major sources tend to be endowments, banks, insurance companies, and sovereign wealth funds. See: http://fisher.osu.edu/supplements/10/12707/LPReturnsJanuary2013.pdf http://fisher.osu.edu/supplements/10/12707/LPReturnsJanuary2... (p. 1).

clienthunter 13y ago
You know whenever I see spats like this I feel compelled to point that governments cause such profound economic distortion that we really can't speak of what a 'free' society would be actually be like - it's so far removed from anything humanity has known in a very long time. We're all (more or less) coders here, right? What happens when we tinker with a big, complex, undocumented system that nobody really understands? Government as a concept isn't so much tinkering as it is a blindfolded child refactoring by typing with his elbows.
- rayiner 13y ago
  The economy is itself a distortion caused by government. In the state of nature there are no economies because as soon as you accumulate a little capital someone clubs you on the head and takes it away. This is why most libertarians are of the statist variety. They talk about the economic distortion caused by government, but what they mean is the distortion caused by the parts of government they don't like (I.e. besides the police, courts, etc). This is a perfectly fine position, but is susceptible to the economic arguments I listed.
  - clienthunter 13y ago
    As an economist I assure you that if I noted a correlation between head clubbing and capital accumulation I would take offensive and defensive steps to protect my head. In fact most would, leading to a nice little equilibrium where head clubbing is not a worthwhile strategy. They may even form a protection racket, and call it "Police". Economics is not the study of capital, it's the study of trade - which incidentally is so natural we even observe it in the animal kingdom. Few libertarians would deny the need for at least occasional collaboration, but that is not the same as government. Governments are universally wasteful of resources, susceptible to corruption, resistant to changing needs, and have a nasty habit of claiming absolute moral authority on things...which in turn has a nasty tendency to start wars. It is, objectively, a limiting and archaic system that does us all a great deal of damage.
    - 13y ago

deleted 13y ago

[deleted]

agorabinary 13y ago

> free rider problems, collective action problems, problems involving positive and negative externalities, problems involving information asymmetries, etc. The usual statist objections to pure market action are total myths, not to mention weak and tangential objections. I'd love to argue the market with a hardline Marxist because at least they take a true thrust at market action rather than just nibbling. >free rider, externalities How is it a problem to anyone that a persons actions benefit others without deriving some monetary value for the benefit? No one is coerced, no rights violated. This is the only standard for judging these matters. No person should be forced to pay for a benefit for a transaction they did not agree to. Collective defense, for example, does not suffer because some people don't pay to play --- forcing equal patronage only serves to undermine the entire relationship between buyer and seller. More: http://mises.org/daily/2769 http://mises.org/daily/2769 >collective action Kickstarter. >Information assymetries Information is a value that is open on the market, as all values are. Not sure if the product your buying is safe? Buy insurance for it. Or, take the time to do your research and make comparisons. That time spent has a value. Decide which you are willing to give up: that time, or the cost of the insurance. Value is a dynamic and multifaceted concept. http://mises.org/daily/1135 http://mises.org/daily/1135

rayiner 13y ago
> The usual statist objections to pure market action are total myths The usual libertarian objections to modern economics are usually wishful thinking.
- glenra 13y ago
  Much of modern economics directly inspires libertarian objections to state action. (Krugman and his acolytes notwithstanding.) I tend to think of libertarians as "liberals who learned economics".
agorabinary 13y ago
There's nothing more wishful than hoping the watchers do their jobs, without watchers themselves. Ad infinitum.

dragonwriter 13y ago

> Silicon Valley does not need DC, it is hindered by DC Then why doesn't Silicon Valley exist in some place without an effective government?

clienthunter 13y ago
They are trying... https://blueseed.co/ https://blueseed.co/
- dragonwriter 13y ago
  "A startup is trying to sell idea X" and "Silicon Valley is trying X" are not equivalent. And even Blueseed has, as part of its pitch: Silicon Valley is the best place in the world to scale a company, and once you’re large enough there are legal channels available to move into Silicon Valley proper. We will provide you with the resources and contacts you need to make the transition. [1] https://blueseed.co/quick-facts/ https://blueseed.co/quick-facts/
  - clienthunter 13y ago
    Perhaps not, but it does get a point across that I don't imagine anyone had trouble interpreting. Minutiae aside (it was a short post for a reason), the fact this idea is not considered crazy and has a bit of traction is extremely relevant to the discussion as a whole.
    - dragonwriter 13y ago
      > the fact this idea is not considered crazy and has a bit of traction is extremely relevant to the discussion as a whole. Does it? As I see, the idea is choosing a location to take maximum advantage of the benefits of Silicon Valley including those provided by government while avoiding particular restrictions, particularly related to immigration, related to government. Insofar as hacking government -- which this is -- being considered a potentially-viable startup proposition is relevant to the discussion, its relevant as evidence that government has utility to Silicon Valley even though it poses constraints, not evidence that Silicon Valley doesn't need government. (And, while I think that it is a fact that the idea "has some traction", I'm less convinced that it is a fact that it is "not considered crazy". An idea can be considered crazy and have some traction.)

saraid216 13y ago

> The democratic, lobby-based, "law-for-sale" system is systemically disadvantaged to the classic survival of the adaptable. Odd, I was reading a history book the other day and took note of this passage: "The other wrong lesson [the philosopher William James] thought people took from On the Origin of Species is, in effect, the flip side of the first. It is the belief that evolutionary science can lay a foundation for norms–that natural selection serves as a kind of "bottom-line" arbiter of merit. This is the doctrine of "the survival of the fittest," .... It makes the logic of evolution the logic of human values: it suggests that we should pursue policies and honor behavior that are consistent with the survival of characteristics understood to be "adaptive," and it justifies, as "natural," certain kinds of coercion."