RFC: Is there anything like a good government intervention?

[Sjalq]

Hi guys,

Read a somewhat disappointing Richard Duncan article this morning in which he rightly criticizes the government propping up zombie industries but then goes on to suggest that the money could be better spent in other industries that encourage growth. I see this as a classic case of how most people view politics and economics "I think the government should <insert policy preference here>". They want to use the government's ability to coerce and the wealth it gains through taxation, to build their vision of the world regardless of whether that world is what people want or whether it is practical in any real way.

This is also what makes the libertarian view so hard to sell, how do you pitch a plan based on doing nothing? Of course the suggestion is not that nothing happens but rather that the world can self organize far more efficiently than a politician could ever plan. This in my view is what makes a politician, someone who forgets their just a human being, without perfect knowledge, and begins to imagine they can effectively manage the lives of other from a distance.

So maybe there is an economic intervention other that close all state departments except the police, drop all regulations and stop taxing that can help the economy. Does anyone have any suggestions as to what a positive economic intervention might be?

[ElectricGoat]

Does anyone have any suggestions as to what a positive economic intervention might be?

Provide legal and monetary incentives to form cooperatives and associations instead of corporations. Then, when people are used to being active parts in such cooperatives and associations, progressively allow associations to replace some of the State's functions.

If you just make the State disappear today, you will not get anarchy, you will get chaos. Self organization doesn't magically appear as the state disappears, it is built over time. And there can be many different outcomes, including a lot of bad ones. The State should gently steer people towards a fair organization by ensuring that such organization is already there before it relinquishes control. Of course, this is the dream of Communism, and we now that the State rarely does that even when it promises to, but still, I believe it would be a good intervention.

[Sjalq]

Does anyone have any suggestions as to what a positive economic intervention might be?

Provide legal and monetary incentives to form cooperatives and associations instead of corporations. Then, when people are used to being active parts in such cooperatives and associations, progressively allow associations to replace some of the State's functions.

If you just make the State disappear today, you will not get anarchy, you will get chaos. Self organization doesn't magically appear as the state disappears, it is built over time. And there can be many different outcomes, including a lot of bad ones. The State should gently steer people towards a fair organization by ensuring that such organization is already there before it relinquishes control. Of course, this is the dream of Communism, and we now that the State rarely does that even when it promises to, but still, I believe it would be a good intervention.

I agree that we cant kill the whole beast in on shot. However, this might happen due to natural consequences when it collapses in on itself. A gradual closing down is much preferred.

As you and I both know governments generally don't shrink unless forced to. So expecting them to gradually scale down probably wont happen. I suggest starting with the war machine and working your way towards welfare programs and then the taxation system. Closing down everything except the police over a 10 year period.

[hugolp]

This is also what makes the libertarian view so hard to sell, how do you pitch a plan based on doing nothing?

Dont sell it as a plan to do nothing, because it is not true that libertarians propose to do nothing. Libertarians propose that the government should do nothing, that is extremely different than everybody doing nothing. You should say exactly what you said, that the government should let people self organize and attend their needs locally because government does not have the capacity to provide efficiently and any type of help by the government will in reality hurt people. If you want to be emotional you can ask them if they want to hurt people (it works with lefties).

The problem is that it is nice to think that you are some kind of semi-god that can centrally plan and resolve humanity problems, only if you had enough power. Its very nice for the ego, and some people buy it (I know because I did for a long time). Until you dont realize that you are being an egomaniacal fool to believe that you can centrally plan an economy you are gong to keep thinking that just chaning the law to exactly what you propose will solve all the problems of everyone (even when you dont even know the real problems of everyone, its absurd like that).

[ElectricGoat]

If you want to be emotional you can ask them if they want to hurt people (it works with lefties).

I'll be playing the devil's advocate here, but you'd have to explain to those "lefties" how a "survival of the fittest" world doesn't hurt people, because they see the State as a way to attenuate disparities among the strong and the weak. Convincing people does require some level of empathy, not just using logical fallacies.

The problem is that it is nice to think that you are some kind of semi-god that can centrally plan and resolve humanity problems, only if you had enough power.

Again, this is a logical fallacy (more precisely, a straw-man argument), because "lefties" are not advocating dictatorship. They see the State as being made of many people, not just one benevolent dictator.

[hugolp]

I'll be playing the devil's advocate here, but you'd have to explain to those "lefties" how a "survival of the fittest" world doesn't hurt people, because they see the State as a way to attenuate disparities among the strong and the weak. Convincing people does require some level of empathy, not just using logical fallacies.

But this "survival of the fittest" is just a strawman. The market is collaboration, absence of violence.

Government is the way some people get to use and justify violence to gain privileges over the rest. With the question I am trying to turn the vision that government is there to help, towards a vision that government intervention hurts.

Again, this is a logical fallacy (more precisely, a straw-man argument), because "lefties" are not advocating dictatorship. They see the State as being made of many people, not just one benevolent dictator.

I did not explain myself or you did not get it. I am not saying lefties want a dictatorship (although some do). I am saying that internally and probably without them knowing they want a democracy (because its the polically correct way of thinking) that does what they want. When you talk to central economic planners (and this is true for right wingers also) the problem is always that the government is not doing exactly what they propose. If only the government did want they propose everything would be dandy. This is what I call the semi-god complex. It feels good for the ego.

Btw, I am talking about authoritarian lefties (social-democrats and so on). I consider myself a lefty.

[ribuck]

... he rightly criticizes the government propping up zombie industries but then goes on to suggest that the money could be better spent in other industries ...

Government is the ultimate manifestation of the Tragedy of the Commons. It's in everyone's economic interest to try to extract money from the government to fund their own pet project, to the economic detriment of everyone else.

Provide legal and monetary incentives to form cooperatives and associations instead of corporations

It doesn't even need the provision of legal and monetary incentives, just the removal of legal and monetary disincentives. Plus the removal of the corporation's ability to internalise profit while externalising risk.

A gradual closing down is much preferred

Historically, this has never happened. Any large organization devotes a large part of its resources to perpetuating itself regardless of its utility. Historically, meaningful change comes suddenly, when all the right forces are lined up and the population is ready to accept it.

"lefties" ... see the State as a way to attenuate disparities among the strong and the weak

There are some interesting figures that show a correlation between the increase in US government spending (as a percentage of the economy) and inequality between the top and bottom slices of society. I can't track down the URL at this time, but I have seen them referenced on one of the FreeDomainRadio videos.

Also, those who receive the most aid from state spending have (on average) lower educational outcomes, lower lifetime incomes, poorer health etc. There is some high-quality evidence for this, taken from cities that straddle US state boundaries and therefore have different educational and health "entitlements" on opposite sides of the same street.

[ElectricGoat]

But this "survival of the fittest" is just a strawman. The market is collaboration, absence of violence.

But there is no economic incentive for the strong to help the weak. Presumably morals would play that role in an anarchist society but it is a very real problem that can't be ignored.

[FreeMoney]

But this "survival of the fittest" is just a strawman. The market is collaboration, absence of violence.

But there is no economic incentive for the strong to help the weak. Presumably morals would play that role in an anarchist society but it is a very real problem that can't be ignored.

Leaving aside the fact that there are motivations for action besides economics; there are economic incentives to help others both weak and strong.

There are very few people who are really helpless anyway. If it wasn't illegal to hire people, build things, and grow things people very few people would have trouble making their own living. For those that cannot, we know there are lots of people who care about them since this is the most common argument I hear for the state "But I want a state because I care about the poor" See lots of people care. People who care about things do them. Even in our society with it's billion dollar aid programs and 50% taxes on people with excess resources there are thousands of charities getting well funded.
 

[ptd]

But there is no economic incentive for the strong to help the weak. Presumably morals would play that role in an anarchist society but it is a very real problem that can't be ignored.

Yes there is, it's called trade. I'd quite happily pay a "weak" person to do something useful at market rates (which must be enough to sustain them).

[hugolp]

But this "survival of the fittest" is just a strawman. The market is collaboration, absence of violence.

But there is no economic incentive for the strong to help the weak. Presumably morals would play that role in an anarchist society but it is a very real problem that can't be ignored.

Leaving aside the fact that there are motivations for action besides economics; there are economic incentives to help others both weak and strong.

There are very few people who are really helpless anyway. If it wasn't illegal to hire people, build things, and grow things people very few people would have trouble making their own living. For those that cannot, we know there are lots of people who care about them since this is the most common argument I hear for the state "But I want a state because I care about the poor" See lots of people care. People who care about things do them. Even in our society with it's billion dollar aid programs and 50% taxes on people with excess resources there are thousands of charities getting well funded.
 

I could not have answered better.

The first reaction of an authoritarian is always: "but what about the poor?" like if they really care for the poor and not for power.

[ElectricGoat]

there are economic incentives to help others both weak and strong.

There are not, unless your include the other factors like morals in the usability function of people. Even if you do include those factors, no study has ever shown that it was enough.

Let me be clear: I'm not saying that anarchy cannot work because of this, I'm somewhat of an anarchist myself. I'm sure there are lots of solutions. Yet this is an issue, as you cannot rely on a free market to fulfill the needs of everyone; nowhere in the definition of a free market can you see that there is some guarantee that everyone can achieve survival. Dismissing the issue is just wishful thinking.

[hugolp]

there are economic incentives to help others both weak and strong.

There are not, unless your include the other factors like morals in the usability function of people. Even if you do include those factors, no study has ever shown that it was enough.

Let me be clear: I'm not saying that anarchy cannot work because of this, I'm somewhat of an anarchist myself. I'm sure there are lots of solutions. Yet this is an issue, as you cannot rely on a free market to fulfill the needs of everyone; nowhere in the definition of a free market can you see that there is some guarantee that everyone can achieve survival. Dismissing the issue is just wishful thinking.

The fact that the government promises a guarantee does not mean its real. It just means its a promise.

[FreeMoney]

there are economic incentives to help others both weak and strong.

There are not, unless your include the other factors like morals in the usability function of people. Even if you do include those factors, no study has ever shown that it was enough.

Let me be clear: I'm not saying that anarchy cannot work because of this, I'm somewhat of an anarchist myself. I'm sure there are lots of solutions. Yet this is an issue, as you cannot rely on a free market to fulfill the needs of everyone; nowhere in the definition of a free market can you see that there is some guarantee that everyone can achieve survival. Dismissing the issue is just wishful thinking.

You are not responsible for fulfilling everyones needs. I am not dismissing anything. I'm telling you that I see needs being satisfied right now voluntarily. I also see an organisation that prevents people from meeting their needs every day. I am not saying that the second people stop interfering all needs will be met, only that the process of meeting needs is inhibited by the use of force, not helped by it.

[ribuck]

... nowhere in the definition of a free market can you see that there is some guarantee that everyone can achieve survival ...

Nowhere in the definition of a government can you see that there is some guarantee that everyone can achieve survival, and in fact governments do rather poorly at this.

The very poorest segment of society (such as those who sleep rough on the streets) accesses far less of the state's resources than the other segments. Many government programs need you to have an address, or need you to have a bank account, or need you to have a computer, or need you to have a birth certificate, or need you to have ready access to transport, or need you to be literate.

Statist laws take away much of the ability for the destitute to improve their life. In the UK, many old people are very poor, many are really struggling to stay warm and get enough to eat. And yet old people can be the most valuable child carers. They have plenty of time and patience, flexible availability, and lots of wisdom to pass on. But current laws make it almost impossible for them to care for children on a casual basis. Even if they can meet all the paperwork requirements and the bureaucratic inspections, it can take many months for the permission to come through.

Younger people suffer too. In past centuries, a youth who has fallen on hard times could improve his lot through hard work, starting one step at a time with "odd jobs" like chopping firewood. But employment is so regulated nowadays that it's not worth anyone's while to pay people for odd jobs. For the unemployed, it's "all or nothing", whereas humans are best at getting themselves out of a bad situation if they can improve their life incrementally.

The number of people who are truly unable to survive without welfare is very small, and those people do better under voluntary charity than under state bureaucracy.

[ElectricGoat]

You are not responsible for fulfilling everyones needs.

This is what I mean. Most "leftists" believe society is responsible for fulfilling the basic needs of everyone. In fact, in the country I live in, it works. Homeless people don't starve or freeze to death unless they refuse help. I see no evidence that voluntary charity would achieve this. Hence the inability to convince those leftists.

[ribuck]

Homeless people don't starve or freeze to death unless they refuse help. I see no evidence that voluntary charity would achieve this.

Homeless people are often those who are made helpless by the state.

Homeless people are cash-poor but time-rich. There are types of homes that require a lot of time but very little money to build. Two examples are straw bale housing, and yurts.

Suppose a homeless person finds a farmer who will let them build such a dwelling on an unused piece of his land, perhaps in return for some help with milking the cows. Do you think the state will allow this?

The land has no "planning permission", and the building is too non-standard to be approved. So the homeless person is denied an honest way to lift themselves up, back into mainstream society.

In my country there are a few people who have managed to convince the bureaucracy to allow them to live in straw-bale houses or yurts. But the people who succeed in this interaction with the state are not the ones who are struggling and really need the permission.

As for voluntary charity, it's empirically shown that charity flourishes when the state is smaller, and that charity languishes when the state moves in on its turf. But even with a dominant state, private charity flourishes when there is an exchange.

What I mean by this is, for example, that the Salvation Army is always willing to help you, but in exchange you may need to listen to the word of God. Fair enough. If I was a destitute atheist I would respectfully do that, in order to lift myself out of poverty. Then, I would gratefully make a large donation back to the organization that had helped me, before severing all ties with it.

[hugolp]

You are not responsible for fulfilling everyones needs.

This is what I mean. Most "leftists" believe society is responsible for fulfilling the basic needs of everyone. In fact, in the country I live in, it works. Homeless people don't starve or freeze to death unless they refuse help. I see no evidence that voluntary charity would achieve this. Hence the inability to convince those leftists.

Really? I remember reading about some libertarians in New Hamshire that used a spare garage in someones house to acommodate homeless people because it was very cold ouside. The government threaten them to close it because they did not have the license. At the end, the government did not have the balls to go ahead. Just an example of the opposite situation.

[Gavin Andresen]

Answering the original question:

Arresting counterfeiters is a good government economic intervention.

A counterfeit-proof currency like bitcoin is better, of course.

[Nefario]

Homeless people don't starve or freeze to death unless they refuse help. I see no evidence that voluntary charity would achieve this.

Homeless people are often those who are made helpless by the state.

Homeless people are cash-poor but time-rich. There are types of homes that require a lot of time but very little money to build. Two examples are straw bale housing, and yurts.

Suppose a homeless person finds a farmer who will let them build such a dwelling on an unused piece of his land, perhaps in return for some help with milking the cows. Do you think the state will allow this?

The land has no "planning permission", and the building is too non-standard to be approved. So the homeless person is denied an honest way to lift themselves up, back into mainstream society.

In my country there are a few people who have managed to convince the bureaucracy to allow them to live in straw-bale houses or yurts. But the people who succeed in this interaction with the state are not the ones who are struggling and really need the permission.

As for voluntary charity, it's empirically shown that charity flourishes when the state is smaller, and that charity languishes when the state moves in on its turf. But even with a dominant state, private charity flourishes when there is an exchange.

What I mean by this is, for example, that the Salvation Army is always willing to help you, but in exchange you may need to listen to the word of God. Fair enough. If I was a destitute atheist I would respectfully do that, in order to lift myself out of poverty. Then, I would gratefully make a large donation back to the organization that had helped me, before severing all ties with it.

I have read about shacks being built on the sides of motorways in the UK and Ireland (there are usually a lot of trees where they do), and in Japan there are blue bag/box apartment buildings. Where homeless people have built their own two or three floor apartment building out of boxes and bags for waterproofing on public land (parks etc.)

http://www.share-international.org/archives/homelessness/hl-ticardboard.htm