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Why is it that only government can provide some things well? Can you prove it both logically and empirically?

by snitko 12y ago

AnthonyMouse 12y ago
Some goods and services are dominated by up-front costs. That makes usage-based billing economically harmful by discouraging usage of a use-it-or-lose-it resource that has already been paid for. It also makes competition extremely inefficient because each competitor has to duplicate the high up-front cost of e.g. building a last mile network. The result when left to private enterprise is generally a monopoly that charges monopoly rents for access to the resource, and in cases where there is competition (e.g. because two existing monopoly markets merged through technological change, as with telephone and cable) the competition is highly inefficient because each competitor has to duplicate each other's costs. And if competition exists then the competitors are essentially required to engage in some form of explicit or implicit collusion to not lower prices, since in a market dominated by up-front costs each competitor can always gain revenue by lowering prices to gain customers, until the competitor responds in kind ultimately causing all providers to be unable to recover their up-front costs. Having the government pay for such resources (as with roads) with tax dollars and then providing free access to the public is massively more efficient than private enterprise, because you eliminate the incentive for rent-seeking and economically harmful usage-based billing and for that matter eliminate all the overhead of billing, marketing, collections, denying access to non-subscribers, etc. But the only way to do this is if the resource can be funded in some other way, specifically through taxation.
- snitko 12y ago
  > economically harmful usage-based billing and for that matter eliminate all the overhead of billing, marketing, collections, denying access to non-subscribers So are you saying that feeding the whole IRS is LESS expensive than having an automated billing system that could track who is subscribed and who can enter a certain road? Because if it's not more effective, then, by the same token, why don't we also fund air travel with taxation? Too expensive to check tickets and deny access to free riders. It's better to just let everyone fly for free. Hell, you can say anything is more effective when funded by taxation. But that doesn't make it true. I don't understand why do I have to subsidize someone who uses roads everyday, while I use it once a week, for example. It's like as if I had to pay the same price for 1 airline ticket as the other person paid for 10. And while it may be a burden for a company to deploy a billing system, with government the burden is on the consumer: I have to fill all those tax forms and make sure everything is correct (or pay an accountant) - talking about some economically harmful activity, I don't like it when someone conscripts me to be a part-time accountant. Your claims that government provided services are better because their production is more effective is not proven. Show me the exact mechanism. Show me how is it cheaper for everyone and not just for some? Can you demonstrate that the money spend on running the IRS is actually less than private enterprises would spend on the billing system? If you can't do it, then your words shall be called a speculation, not proof.
  - AnthonyMouse 12y ago
    > So are you saying that feeding the whole IRS is LESS expensive than having an automated billing system that could track who is subscribed and who can enter a certain road? The IRS is not a relevant cost because deciding not to have municipal fiber doesn't cause the IRS to go away. You have to pay for it regardless, unless your proposal is to have no taxes. > Because if it's not more effective, then, by the same token, why don't we also fund air travel with taxation? Because air travel has a significant unit cost. You have to pay for fuel, pilots and flight and ground crews, significantly increased maintenance of aircraft, etc. Moreover, governments have often subsidized the up-front costs of air travel, like airports and planes. > I don't understand why do I have to subsidize someone who uses roads everyday, while I use it once a week, for example. Because you're not subsidizing them, you're asking them to subsidize you. It doesn't require fewer road workers to pave the road in front of your house and the weather doesn't stop creating potholes just because you don't drive on it as much. You're asking for there to be a road in front of your house so that you can drive to the beach or call a cab or get on a bus or have an ambulance come to your house and you want to claim the advantages of having that available, when the availability whatsoever is the primary cost, without paying your share of the cost of that availability.
  - deleted 12y ago
    [deleted]
  - specialist 12y ago
    Show me the exact mechanism. What measure of proof do you require? PS- AnthonyMouse has been exceedingly gracious and patient with you.
- snitko 12y ago
  Another thing: you have a problem with private monopolies, but when a government runs some business, like building roads - it's somehow fine? With a private enterprise, even if it is a monopoly, I still have a choice: I can stop paying and not use the service. Can I stop paying to the government?
  - aninhumer 12y ago
    When a democratic government makes decisions, everyone gets an equal share in that choice. If the road gets built, it's because most people agree it will benefit them. When private enterprise makes decisions, those with more money get more choice. If a road gets built, it's because those with money agree it will benefit them. If a democracy starts letting the rich have more say, then it needs to be strengthened to resist them, not weakened so they can do as they please.
    - d357r0y3r 12y ago
      When a democratic government makes decisions, everyone gets an equal share in that choice. Isn't this an assumption? Perhaps if the system were such that every issue were up to a nation-wide popular vote, the statement would be true...not that such a system is a good idea. Some votes are worth infinitely more than others. That is to say, many votes are worth nothing. If you vote for the opposition party in a district that is 75% supportive of the incumbent party, your vote doesn't matter. It will (hopefully) be counted, but no one will take your opinion into account. The other assumption is that majority rule is something worth working towards. Everyone wants government power to work for them. Problem is, it's a power that can't really be controlled. You might get your way this election cycle, but that same power could be used against you when the uneducated reactionaries rise up next time around.
      - aninhumer 12y ago
        I'm not going to deny that many existing democracies have been weakened, or were conceived too weak in the first place. My point is that the solution is to fix the democracy, not abolish the only thing that has any limiting power on the rich to exert their will.
- specialist 12y ago
  Having the government pay for such resources (as with roads) ... is massively more efficient than private enterprise Good point that needs repeating, thank you. I agree with business management guru Peter Drucker when he states that waste is immoral. I support the most efficient solutions for a context, whether its collectivism, competition, cooperatives, lotteries, various kinds of auctions, whatever. Whenever a better solution is found, I will support that. Because, you know, things change.

Why is it that only government can provide some things well? Can you prove it both logically and empirically?

by snitko 12y ago

Why is it that only government can provide some things well? Can you prove it both logically and empirically?

Some goods and services are dominated by up-front costs. That makes usage-based billing economically harmful by discouraging usage of a use-it-or-lose-it resource that has already been paid for. It also makes competition extremely inefficient because each competitor has to duplicate the high up-front cost of e.g. building a last mile network. The result when left to private enterprise is generally a monopoly that charges monopoly rents for access to the resource, and in cases where there is competition (e.g. because two existing monopoly markets merged through technological change, as with telephone and cable) the competition is highly inefficient because each competitor has to duplicate each other's costs. And if competition exists then the competitors are essentially required to engage in some form of explicit or implicit collusion to not lower prices, since in a market dominated by up-front costs each competitor can always gain revenue by lowering prices to gain customers, until the competitor responds in kind ultimately causing all providers to be unable to recover their up-front costs. Having the government pay for such resources (as with roads) with tax dollars and then providing free access to the public is massively more efficient than private enterprise, because you eliminate the incentive for rent-seeking and economically harmful usage-based billing and for that matter eliminate all the overhead of billing, marketing, collections, denying access to non-subscribers, etc. But the only way to do this is if the resource can be funded in some other way, specifically through taxation.

snitko 12y ago
> economically harmful usage-based billing and for that matter eliminate all the overhead of billing, marketing, collections, denying access to non-subscribers So are you saying that feeding the whole IRS is LESS expensive than having an automated billing system that could track who is subscribed and who can enter a certain road? Because if it's not more effective, then, by the same token, why don't we also fund air travel with taxation? Too expensive to check tickets and deny access to free riders. It's better to just let everyone fly for free. Hell, you can say anything is more effective when funded by taxation. But that doesn't make it true. I don't understand why do I have to subsidize someone who uses roads everyday, while I use it once a week, for example. It's like as if I had to pay the same price for 1 airline ticket as the other person paid for 10. And while it may be a burden for a company to deploy a billing system, with government the burden is on the consumer: I have to fill all those tax forms and make sure everything is correct (or pay an accountant) - talking about some economically harmful activity, I don't like it when someone conscripts me to be a part-time accountant. Your claims that government provided services are better because their production is more effective is not proven. Show me the exact mechanism. Show me how is it cheaper for everyone and not just for some? Can you demonstrate that the money spend on running the IRS is actually less than private enterprises would spend on the billing system? If you can't do it, then your words shall be called a speculation, not proof.
- AnthonyMouse 12y ago
  > So are you saying that feeding the whole IRS is LESS expensive than having an automated billing system that could track who is subscribed and who can enter a certain road? The IRS is not a relevant cost because deciding not to have municipal fiber doesn't cause the IRS to go away. You have to pay for it regardless, unless your proposal is to have no taxes. > Because if it's not more effective, then, by the same token, why don't we also fund air travel with taxation? Because air travel has a significant unit cost. You have to pay for fuel, pilots and flight and ground crews, significantly increased maintenance of aircraft, etc. Moreover, governments have often subsidized the up-front costs of air travel, like airports and planes. > I don't understand why do I have to subsidize someone who uses roads everyday, while I use it once a week, for example. Because you're not subsidizing them, you're asking them to subsidize you. It doesn't require fewer road workers to pave the road in front of your house and the weather doesn't stop creating potholes just because you don't drive on it as much. You're asking for there to be a road in front of your house so that you can drive to the beach or call a cab or get on a bus or have an ambulance come to your house and you want to claim the advantages of having that available, when the availability whatsoever is the primary cost, without paying your share of the cost of that availability.
- deleted 12y ago
  [deleted]
- specialist 12y ago
  Show me the exact mechanism. What measure of proof do you require? PS- AnthonyMouse has been exceedingly gracious and patient with you.
snitko 12y ago
Another thing: you have a problem with private monopolies, but when a government runs some business, like building roads - it's somehow fine? With a private enterprise, even if it is a monopoly, I still have a choice: I can stop paying and not use the service. Can I stop paying to the government?
- aninhumer 12y ago
  When a democratic government makes decisions, everyone gets an equal share in that choice. If the road gets built, it's because most people agree it will benefit them. When private enterprise makes decisions, those with more money get more choice. If a road gets built, it's because those with money agree it will benefit them. If a democracy starts letting the rich have more say, then it needs to be strengthened to resist them, not weakened so they can do as they please.
  - d357r0y3r 12y ago
    When a democratic government makes decisions, everyone gets an equal share in that choice. Isn't this an assumption? Perhaps if the system were such that every issue were up to a nation-wide popular vote, the statement would be true...not that such a system is a good idea. Some votes are worth infinitely more than others. That is to say, many votes are worth nothing. If you vote for the opposition party in a district that is 75% supportive of the incumbent party, your vote doesn't matter. It will (hopefully) be counted, but no one will take your opinion into account. The other assumption is that majority rule is something worth working towards. Everyone wants government power to work for them. Problem is, it's a power that can't really be controlled. You might get your way this election cycle, but that same power could be used against you when the uneducated reactionaries rise up next time around.
    - aninhumer 12y ago
      I'm not going to deny that many existing democracies have been weakened, or were conceived too weak in the first place. My point is that the solution is to fix the democracy, not abolish the only thing that has any limiting power on the rich to exert their will.
specialist 12y ago
Having the government pay for such resources (as with roads) ... is massively more efficient than private enterprise Good point that needs repeating, thank you. I agree with business management guru Peter Drucker when he states that waste is immoral. I support the most efficient solutions for a context, whether its collectivism, competition, cooperatives, lotteries, various kinds of auctions, whatever. Whenever a better solution is found, I will support that. Because, you know, things change.