Dat inequality

[Renton]

A general response to CoccoBill:

1) Bad Governance vs Good Governance

It isn't that the governments are bad, it's that they are ill-equipped to act accordingly. You could fire the entire Congress and replace them with the top 535 IQ people in the country, hypothetical paragons of morality with no self interest to speak of, and they still would not be able to determine the correct amount of money to invest in ethanol production, or what the proper wage for a bussboy should be. That information can only exist because of the voluntary participation of millions of individuals in the market.

2) "Those are people working both for the public and private sectors, there's nothing inherently different in their analytic capabilities. Their incentives and goals, however, differ."

You go on to describe the ways in which the private accountant could act in a corrupt manner and the public one in a virtuous manner. The facility for corruption is universal to all people, private sector or public. However, the big difference is that the public sector guy is insulated from the consequences of his corruption or in some cases completely divorced from them. This causes him to be even more corruptible.

On the other hand, actors in the private sector have their own money on the line, and stand to lose it a lot more readily if they fail. And the company they work for stands to lose even more. Yes, private companies have the capacity to defraud customers, but doing so is an enormous risk, one which resilient firms will not be willing to take.

3) Value:

This isn't in response to CoccoBill specifically, but I just want to say a short piece about value. Value is the most basic concept that is lost on laypeople who discuss economics. Most people think that all items have inherent value, and become frustrated when they realize that the value of something can change in the blink of an eye.

Value is a completely subjective attribute. It is what a given individual is willing to pay for a given item at a given moment, and nothing more. True value can only be determined by voluntary exchange. Every single thing that a government does is to arbitrarily set its own values onto things. Republics do so based on a plurality of elected representatives' opinions.

The whole point of a government is to impose such values because of an implicit given that people in voluntary exchange will misallocate. They will undervalue things like safety and security and overvalue things like jelly donuts and pussy and beer. You have to start from this point, IMO, to justify the belief in a government.

So when you're building the optimal government, it all has to begin with "Well people aren't going to value X like they *should*, so the government will seize Y amount of their assets to provide X to everyone." This is inherent waste on a colossal scale because the natural system for determining value has been undermined from the start. You have to reconcile this waste somehow with a collective benefit or gain in stability.

[CoccoBill]

A general response to CoccoBill:

1) Bad Governance vs Good Governance

It isn't that the governments are bad, it's that they are ill-equipped to act accordingly. You could fire the entire Congress and replace them with the top 535 IQ people in the country, hypothetical paragons of morality with no self interest to speak of, and they still would not be able to determine the correct amount of money to invest in ethanol production, or what the proper wage for a bussboy should be. That information can only exist because of the voluntary participation of millions of individuals in the market.

The government should not be making either of those decisions. If the public interest requires it or it makes financial sense for the government to invest in ethanol production, they should be allowed to do that based on any analysis and research they can come up with, possibly using private companies to conduct the research unless again, it makes sense for them to insource it, but none of this should have anything to do with how the markets deal with the issue. With the bussboy wage, I'm a bit on the fence when it comes to minimum wage but I lean on them being the lesser evil. Either way, that's for the minimum wage, not the actual wage.

2) "Those are people working both for the public and private sectors, there's nothing inherently different in their analytic capabilities. Their incentives and goals, however, differ."

You go on to describe the ways in which the private accountant could act in a corrupt manner and the public one in a virtuous manner. The facility for corruption is universal to all people, private sector or public. However, the big difference is that the public sector guy is insulated from the consequences of his corruption or in some cases completely divorced from them. This causes him to be even more corruptible.

On the other hand, actors in the private sector have their own money on the line, and stand to lose it a lot more readily if they fail. And the company they work for stands to lose even more. Yes, private companies have the capacity to defraud customers, but doing so is an enormous risk, one which resilient firms will not be willing to take.

While that may be the case regarding the owner and shareholders of the company, for the employees of the company it's exactly comparable to the situation of the government employee (well not completely, since the government employee is at least indirectly dealing with his own money since they are his tax payments, so there IS a level of self-interest), that is, the consequences of their actions are exactly what the policies of the organisation and the government say on the matter. There's nothing that dictates the public sector regulations and penalties to be more laxed. When we're not talking about one person companies or similar company setups where the owner can directly affect all decisions, companies are not coherent hive-mind entities which operate for a common goal, they're comprised of people with self-interests. "Resilient firms not willing to" is in most cases a fallacy in this regard. But yes, I acknowledge this is somewhat beside the point since I don't know how this individual screwup/fraud business could be dealt with in any case.

So when you're building the optimal government, it all has to begin with "Well people aren't going to value X like they *should*, so the government will seize Y amount of their assets to provide X to everyone." This is inherent waste on a colossal scale because the natural system for determining value has been undermined from the start. You have to reconcile this waste somehow with a collective benefit or gain in stability.

You're absolutely right, I think that's exactly why governments exist. Everyone has to decide whether they value public healthcare, security, infrastructure, education etc as a basic concept free for everybody, or whether everyone should deal with them by themselves. Every society, without an exception, has so far decided that these should be a group effort. The way how individuals value things varies greatly, it all gets smoothed out only when you look at collective statistics. These can be deceiving, all humans have on average about one testicle.