DanielLC wrote:Should we make a new thread? This is turning into an interesting discussion that's unrelated to the original post.

Alright, new thread created!

DanielLC wrote:I don't believe either option is intrinsically better, but I believe that the private option is usually better.

More precisely, I think that the government is uniformly bad at everything, whereas the market is good at most things, but extremely bad at others.

I guess I have a somewhat more positive view of government's effectiveness. While it is true that government has had occasional failures, I think that there are also many examples where a good government has been able to do things quite effectively. For instance: the mobilization of forces by the Allied countries during World War II, the Apollo Program, and the combined efforts of the WHO and various governments in the successful eradication of Smallpox.

DanielLC wrote:

but there are some things that are morally more just when implemented by the government, such as health care and education.

Why do you say that?

I get the impression that people consider it unjust for the rich to get better healthcare than the poor. It's certainly unfair. But it's also unfair that the rich get better cars and better houses. If we made everything fair, then they wouldn't be rich. We have decided that it is a good idea to let more productive people get better stuff in order to incentivise people to be more productive. I don't see why it would be different with health care and education.

Education is particularly problematic, since the government has a tendency to give the same education to everyone, even though different people need different education. There are even jobs that require virtually no education, but they still require a high school diploma, just because the only reason you wouldn't have one in this cultural climate is that you're lazy, and they do require that you're not lazy.

The difference between better cars and better houses, and health care and education is that the latter contribute much more to equality of opportunity. Better cars and better houses are luxuries, whereas health care and education fulfill basic needs that enable people to have the same opportunities for success. To have a true meritocracy, a society needs to have a level playing field.

Think of it this way. If the education system were completely private, various private schools would open that would cater to different classes of wealth. Rich people would pay more to go to better schools and poor people would be forced to go to schools of lesser quality. This would lead to an entrenchment of class structures where the upper class would have better opportunities than the lower class. Conversely, in a public system, the rich and poor both go to schools that are of equal quality. Because of this, the rich and poor kids have the same opportunities for achievement and students can succeed based on their actual merit, rather than because of their family's relative wealth.

Similarly, if the rich can afford the best health care, and the poor can only afford lesser quality care, it further entrenches the differences between the two classes. Health is generally not something that you have a choice over. If you get cancer, you need to have the treatment. You can't really decide to reasonably forgo treatment of a broken arm. These things are matters of luck rather than personal effort, and they heavily influence one's ability to be productive.

DanielLC wrote:True, but I think it should be pointed out that the people writing the laws are not above bias. For example, everything I've seen said that that there's little to no correlation between how illegal a drug is and how dangerous it is. It's not a question of having the government decide or let the individuals be idiots. It's a question of letting the government be idiots or letting the individuals be idiots. I'm against letting the government decide unless you can give me good evidence that they're less idiotic.

In a democracy, the primary difference between government and individuals is that government is responsible to the electorate. If the government does something stupid, we can punish them by voting them out of office. Government then is generally no stupider than the will of the majority. If you think the majority of people are stupid, this may not give you much solace, but if you believe in the Wisdom of Crowds phenomenon, then it's arguable that on average, responsible democratic government will be smarter than the average individual. I like to take the example of "Ask The Audience" from the "Who Wants To Be A Millionaire" game show. Historically, polling the audience has resulted in the correct answer about 90% of the time.

I would also argue that politicians are actually disproportionately more intelligent than the average citizen, as they tend to come from an elite who are able to run good campaigns and win elections. It should not be that surprising that a disproportionate number of politicians are lawyers. Law school in general requires higher than average intelligence to get in. Also, the experts that politicians consult for things like commission and policy platforms tend to be academics or advisers of above average intelligence. Admittedly, politicians tend to choose policies that will get them elected, rather than necessarily the morally correct policies, but all things considered, I don't think the government does as bad a job as cynics like to think.

To me, multi-party democracy is actually somewhat like a market system for politics. The parties are like firms in the market, and votes are like dollars that voters spend on the parties as they compete for votes. The main difference from the real market of course, is that every citizen has only one vote, and the winning firm of the competition gets a temporary monopoly on power (though parties can get a certain share of the market in the sense that they win a certain number of seats in Parliament). Thus, in the same way that the market benefits consumers by rewarding firms that provide utility, democracy benefits voters by rewarding parties that provide (or promise) utility.

For instance: the mobilization of forces by the Allied countries during World War II, the Apollo Program, and the combined efforts of the WHO and various governments in the successful eradication of Smallpox.

The first one is one of the cases where the private sector does a terrible job, although I'm still in favor of the government hiring someone rather than doing it directly. People seem to think mercenaries are evil, but I don't really see why. At least, I don't see why they'd be worse than the army.

The second one I consider a failure of the government. I don't really see what benefit there was to getting man on the moon.

I don't know the details of Smallpox, so I can't say whether or not the government did a good job, but that is definitely one of the places the free market is bad at.

Examples of the government interfering when it shouldn't:

The government is subsidising certain foods. Those foods don't have positive externalities. They're just subsidised because they need subsidies to be profitable, because they're over produced, because they're subsidised. We're putting corn syrup into everything, not because corn syrup is cheap, but because it's subsidised, and there's tariffs on sugar.

Unions. The market is too large to effectively collude, but the government steps in, and forces them to. If people in a certain job aren't getting payed enough, or don't have enough benefits, or something like that, people will leave those jobs more and enter them less until the pay is raised and equilibrium is achieved. There is no need for a union. If there is one, they make it hard to enter in order to artificially raise the market price. In addition, having someone argue for different benefits rather than letting the market control it induces signalling-related biases. You'll end up with benefits that aren't worth what they cost.

The difference between better cars and better houses, and health care and education is that the latter contribute much more to equality of opportunity.

So the issue is that you want capital to be fixed?

To have a true meritocracy, a society needs to have a level playing field.

There are costs with not having a true meritocracy. There are also costs to making fancy cars. If it takes a fancy car to get someone to work, then let them have a fancy car. If it takes them knowing their kids will have better opportunities than other kids, then let their kids have better opportunities than other kids.

If you think the majority of people are stupid, this may not give you much solace, but if you believe in the Wisdom of Crowds phenomenon, then it's arguable that on average, responsible democratic government will be smarter than the average individual.

I think the main reason people are stupid is bias. Wisdom of the Crowds does not protect against bias.

More to the point, I don't trust this form of working in a crowd. If you're deciding what job to get, each individual picks a job solely for their own benefit. There is signalling involved, but the choice is important enough that you can't get distracted by it. On the other hand, if you're voting, your choice doesn't affect you. It has some tiny effect on the final decision, that results in a tiny effect on you. There's also a tiny effect on everyone else, but you didn't evolve to make decisions based on how the effect everyone else. In this case, signalling is much more important.

I would also argue that politicians are actually disproportionately more intelligent than the average citizen, as they tend to come from an elite who are able to run good campaigns and win elections.

If the politicians are smart and moral enough to do what's right, they get voted out in favor of the ones that will do what the people want.

The second one I consider a failure of the government. I don't really see what benefit there was to getting man on the moon.

There were arguably significant technological benefits in terms of spinoff technologies, and the political victory of beating the Soviet Union at something did increase the morale of most citizens of the United States. It also set a milestone in terms of human space exploration, which will be important in mitigating the existential risk of living on just one planet. If over-population becomes an issue in the future, it will be beneficial if we can eventually colonize the moon and mars and so on. And if you value at all the potential billions if not trillions of lives of future humans who potentially could exist in the vast, space-colonized future, then the Apollo program is an important step in the right direction.

The government is subsidising certain foods. Those foods don't have positive externalities. They're just subsidised because they need subsidies to be profitable, because they're over produced, because they're subsidised. We're putting corn syrup into everything, not because corn syrup is cheap, but because it's subsidised, and there's tariffs on sugar.

From what I know about agricultural subsidies, I would agree that these days they are an example of government pandering to a certain group of interests (farmers and corporations) rather than doing the right thing. Though I believe the original justification for food subsidies was to ensure that the society wasn't dependent on exports from foreign countries for basic food staples, in case those foreign countries decided to do something like launch an embargo for political reasons.

Unions. The market is too large to effectively collude, but the government steps in, and forces them to. If people in a certain job aren't getting payed enough, or don't have enough benefits, or something like that, people will leave those jobs more and enter them less until the pay is raised and equilibrium is achieved. There is no need for a union. If there is one, they make it hard to enter in order to artificially raise the market price. In addition, having someone argue for different benefits rather than letting the market control it induces signalling-related biases. You'll end up with benefits that aren't worth what they cost.

I admit that unions these days can be problematic, but their original intent was to give workers more power to bargain for things like basic rights and good working conditions. In the all too common situation where there is a significant labour surplus, the job market doesn't necessarily respond to worker demands because workers in low-skill jobs are so easily replaceable. Also, the reality is that the "wage slavery" criticism of work is somewhat relevant. Many poor people couldn't just refuse to work at some job because the conditions are bad. Their choices before the advent of employment insurance and the welfare system were to work or starve. In the context of those historical conditions, unions were actually very important to giving workers more bargaining power. Nowadays I think unions have gone a bit overboard, but I think they still perform a useful function of balancing the comparative power of the modern multinational corporation. I might remove some of the laws that specifically support unions, but I wouldn't eliminate the freedom of workers to form unions if they want to. From a market perspective, unions are a legitimate tactic for workers to organize in the same way the modern limited liability corporation is a legitimate way for capital owners to form a firm.

I actually think that, in a free market, we should allow all sorts of organizations to exist and compete, including things like cooperatives and worker self-managed firms. Let the market decide if they're acceptable forms of organization. In that sense, I think the laws that currently are very friendly to the formation of limited liability corporations, should be made more neutral.

So the issue is that you want capital to be fixed?

No, free flow of capital is reasonable. Rather, what I want is for certain essential services to be provided in such a way that your wealth and position in society should not affect the quality of the service you get.

There are costs with not having a true meritocracy. There are also costs to making fancy cars. If it takes a fancy car to get someone to work, then let them have a fancy car. If it takes them knowing their kids will have better opportunities than other kids, then let their kids have better opportunities than other kids.

Even with public education and health care, the kids of rich people will have better opportunities by virtue of their wealth. The rich can afford the violin lessons and the tutors and the library of books that the poor kids generally won't have. I'm not suggesting we should eliminate all the advantages of wealth. Rather I just think that there are certain things that have such a significant impact on people's opportunities for success, that providing them through public means has a net benefit by helping allow for dramatic upward mobility in our society. I also believe this will maximize the productivity of citizens because it means that even a poor person can succeed and become rich, which I think will motivate a lot more people, given that the majority of people are in the lower or middle classes. Anything we do to encourage upward mobility and eliminate barriers and social class stratification, in effect, improve Positive Liberty and should lead to utility maximization in the long run.

I think the main reason people are stupid is bias. Wisdom of the Crowds does not protect against bias.

More to the point, I don't trust this form of working in a crowd. If you're deciding what job to get, each individual picks a job solely for their own benefit. There is signalling involved, but the choice is important enough that you can't get distracted by it. On the other hand, if you're voting, your choice doesn't affect you. It has some tiny effect on the final decision, that results in a tiny effect on you. There's also a tiny effect on everyone else, but you didn't evolve to make decisions based on how the effect everyone else. In this case, signalling is much more important.

Assuming you mean the economic concept of signalling, I'm not sure why you think that's so bad. As it is a secret ballot, people generally still make the voting decision based on self-interest or their values and preferences.

If the politicians are smart and moral enough to do what's right, they get voted out in favor of the ones that will do what the people want.

If the politicians are really intelligent, they'll find a way to do the right thing as much as pragmatically possible while still doing enough things that people want to stay in office. And often, what people want -is- the same as what's right. After all, the satisfaction of people's preferences usually correlates well with making them happy. So in aggregate, democracy has a tendency to maximize happiness, at least more so than any other system we've come up with.

What would you suggest as an alternative? An enlightened Utilitarian dictatorship?

Given that you seem to trust the free market to maximize utility, why not also expect the closest equivalent to a free market of ideas, the multi-party democracy, to be close to utility maximizing?

Though, I may be biased, because I have come to believe that the current liberal democratic welfare state is actually quite a good place to live in, and that it comes closer to practically maximizing utility than anything else that's existed in the past. At the very least, I would prefer it to most other historical circumstances I could find myself in. Perhaps there is a better society in the future, but I think what we have now is actually pretty good, all things considered. Of course, I live in Canada, so I may be biased by a society and culture who's motto is "peace, order, and good government".

Just thought I'd add this...

The first one is one of the cases where the private sector does a terrible job, although I'm still in favor of the government hiring someone rather than doing it directly. People seem to think mercenaries are evil, but I don't really see why. At least, I don't see why they'd be worse than the army.

I think the issue with mercenaries is that they work against the government monopoly on legitimate violence. Having mercenaries around means that corporations and individuals could conceivably hire such companies to "protect" themselves. That can be prone to abuse, because people can and will find ways to justify doing things like taking out their competing rival firms by tricking the rival firm into doing something illegal and then using that as a justification to apply force. It's just less of a potential mess if we limit soldiers to being available only to the lawful authorities. And in practice, if there is only one customer for the services of mercenary companies (the government), then it isn't really a true market anyway, but a Monopsony.

The other thing is that we -do- have private defense contractors like General Dynamics and Lockheed Martin that supply the government with military equipment and compete against each other. And most western countries these days hire professionals for their standing armies. There are actually private military companies as well that actually are effectively mercenaries for hire. The U.S. actually hired some of them to protect interests in Iraq, and supplement their armed forces. There was a bit of a scandal a while back when some Blackwater contractors killed a bunch of civilians in Iraq, and Blackwater had its licence revoked.

Strictly speaking, having the army represent the single military force in a state just makes it easier to control that force, assuming there is clear political oversight. Essentially the army is run like a corporation anyway (or rather, corporations are usually run like armies), so I think given that defense is a public good and a natural monopoly, then a single army with civilian political oversight is sensible.

In general, I like to think of the democratic government as a kind of corporation whose shareholders are the citizens of the country. When there are natural monopolies, the government is the best kind of corporation for holding those monopolies because as corporations generally hold the interests of their shareholders as primary, this sort of approximates maximizing the utility of the citizens of the country.