How small is your small government?

[Phatscotty]

yup, BBS touches on something I have always believed. When people have money taken out of their paycheck, say, for a homeless shelter to be built, and then it is built, but there are still homeless begging for money, many taxpayers feel like they have already done something about it and are less likely to give them money at that point

[crispybits]

It's not so much whether 10% or 80% of people think the government should build homeless shelters that I'm remarking on, but that when told that there is a certain amount of money in tax revenue, so many more people would happily see it spent on parks as spent on the homeless. I'm quite happy to admit that there's a lot of government wastage, but that's not just from inefficiency and corruption/crony capitalism, it also comes from failing to prioritise the right things with the money it does have. For me the first (and only) priority of government should be ensuring a basic minimum living standard for all citizens, that being somewhere to sleep, something to eat (neither need be remotely luxurious, but very basic provision of critical needs) and a safe and fair environment in which to pursue success and happiness.

[Phatscotty]

It's not so much whether 10% or 80% of people think the government should build homeless shelters that I'm remarking on, but that when told that there is a certain amount of money in tax revenue, so many more people would happily see it spent on parks as spent on the homeless. I'm quite happy to admit that there's a lot of government wastage, but that's not just from inefficiency and corruption/crony capitalism, it also comes from failing to prioritise the right things with the money it does have. For me the first (and only) priority of government should be ensuring a basic minimum living standard for all citizens, that being somewhere to sleep, something to eat (neither need be remotely luxurious, but very basic provision of critical needs) and a safe and fair environment in which to pursue success and happiness.

Good post, but I was just making a statement related to a little piece BBS included in his post.

Per the government being responsible to give every citizen everything they need to live at a minimum standard, has hat not already been tried? What is the plan for imprisoning the wealthy people who will flee once that goes through? Won't that encourage uneducated people and poor people to have more and more kids? Cuz I think that might lead to telling citizens they can only have a certain number of kids, or else force them to pay for birth permits or something.

[mrswdk]

Who will protect IPR?
Who will keep your air clean?

Nobody, we are all going to die tomorrow. I dare to dream that if the government would only get out of the way, people and business would be able to innovate at twice the speed and we would be allowed to start tackling the issue, rather than letting the government make a fortune off us with taxes and restrictions and limitations and regulations and bureaucrats. And we have some other issues over here, mainly a government that repeatedly says they will do one thing but does another, along with a steady stream of new citizens who repeatedly swallow the bullshit without even chewing and immediately asking for seconds.

By the way, China has a government, right? So that automatically means you have clean air, right?

I never said China has the right model. I actually look at China's pollution and food contamination scandals and am glad that Western governments step in and regulate this shit (relatively) well.

I mentioned IPR because some amount of government intervention is necessary to protect innovators. Pharmaceutical products can easily take a decade to develop. Who is going to go to the huge expense of spending ten years developing new pills if a competitor is just going to come along and rip them off at the last minute?

Why does USA or the West have the right model? In what ways does the Western model work better?

I hear you there on the pharma and innovation, but imo that falls more under protecting our rights ie the courts, not so much 'gov't intervention'

Based on my experiences of Beijing, there is a lot to cheer for in strict government regulation of the environment, food standards (Google the baby milk scandal, 'gutter oil' and fake meat) and retail (my local shopping center still contains a fake Apple store, which sells slightly crappy fakes at full price).

Japan industrialised heavily during the 20th century, but it was never as cowboy and dirty as China is today. My wager is that that's because the Japanese government didn't just sit back with its feet up like the Chinese government tends to do.

Btw, aren't the courts a form of government intervention?

[BigBallinStalin]

It's not so much whether 10% or 80% of people think the government should build homeless shelters that I'm remarking on, but that when told that there is a certain amount of money in tax revenue, so many more people would happily see it spent on parks as spent on the homeless. I'm quite happy to admit that there's a lot of government wastage, but that's not just from inefficiency and corruption/crony capitalism, it also comes from failing to prioritise the right things with the money it does have. For me the first (and only) priority of government should be ensuring a basic minimum living standard for all citizens, that being somewhere to sleep, something to eat (neither need be remotely luxurious, but very basic provision of critical needs) and a safe and fair environment in which to pursue success and happiness.

Political agents (politicians and bureaucrats) do not prioritize in the same way as everyone in markets and in civil societies. Why is that?

Another thing to consider, which answers a portion of the first question, is: what happens when the diversity of voter-demanded priorities increases?

[crispybits]

Indeed, and I was kinda replying to both of your posts.

I don't believe the proper minimum standard has been tried. I think that the left (and I know you think I'm a part of that from our previous interactions, but I actually come out slightly to the right on most political tests) have bunched too much under the "basic critical needs" umbrella. You should be fed, have a safe place to sleep without being robbed or assaulted in the night, and have an opportunity to become more productive again. If that means you have to move into a state sponsored accomodation and eat meals served there and get medical care through there, then that is something to put the effort in to get out of and back into having a regular lifestyle once you become more productive again.

I also don't see anything wrong with setting a limit to the amount of children you can keep with government support. How you enforce that is a moral minefield but under no circumstances should people on benefits be able to enhance their lifestyle simply by breeding more. It's a separate discussion to this one but one worth having imo, if only to hash out the moral implications and consequences of any and all proposed systems (enforced temporary castration / enforced abortions / enforced adoptions / etc - none of these is particularly morally intuitive but there must be some way of making it work that doesn't cause un-necessary suffering to the citizens)

[BigBallinStalin]

My main concern about democracy in general is that as it becomes more centralized, then all those competing goals and expressed desires become funneled into a smaller domain which in turn enables more organized voter groups (special interest groups) to reap more concentrated benefits while dispersing the costs over a larger population. In short, the rewards of lobbying become higher, and the costs experienced by everyone else become lower (so, why react strongly? Hey, why not 'get you some' while everyone's at it too?).

Regarding your second paragraph, that is an issue best addressed by people within those local communities because they'll be better at spotting who's breaking the (informal) rules. For example, suppose national government is uninvolved in welfare, so this local community provides such services. If they and their local government contribute to the minimal government support system, then they have a greater incentive to discourage free riders and abusive users. When you increase the scale of government and when that government takes more from richer and less (sometimes, on net, zero) from the poorer, then the incentive to address freeriders and abusers is less. Usually, it's not even worth the costs because the impact of their abuse is negligible (it's dispersed over 300+ million people).

That's why I opt for limited government. Y'all can do as y'all please within the local spheres (State, municipal, whatever), and there y'all can experiment with whatever mix of government-provided goods and rules y'all see fit. But the consequences are limited to those areas, and whenever one political arena becomes too abusive, the current population and/or future generations can easily find somewhere else similar enough yet much less abusive to move to.

[crispybits]

OK, but the point of this thread is not to discuss the geographical reach/centralisation catchment aspects, but say I could organise tomorrow for your system to be implemented worldwide, and every smaller region produced a prospectus detailing their policies, which preferences about how to spend taxes would you be looking for as ideal?

[Phatscotty]

OK, but the point of this thread is not to discuss the geographical reach/centralisation catchment aspects, but say I could organise tomorrow for your system to be implemented worldwide, and every smaller region produced a prospectus detailing their policies, which preferences about how to spend taxes would you be looking for as ideal?

I wouldn't be concerned as much about how to spend the taxes as I would be not taking the taxes in the first place, and I do not know nearly enough about every country in the world to even consider answering that question. Wait.......ZAMUNDA!!!!!!!

When you say 'my system', you mean America, or something I said here earlier?

[mrswdk]

BBS, I'm not sure that it's that productive to tell a company who spent hundreds of millions of dollars making a film that the solution to people stealing their film is for the developer to be more creative in their marketing. The majority of people who just want the film will steal it regardless of whether or not each legitimate copy comes with a shiny box and a poster.

Plus, if a movie is available online for free then the value of the official version drops to 0. In your scenario, people will not pay $15 for a DVD that comes with a nice booklet unless they consider the booklet to be worth $15. The DVD available for free (or very little cost) on pirate has no value within the package being offered by the company. The movie company thus has to produce their movie and give it away for free, and then recoup all their costs by offering extra products (which begs the question: why make the film in the first place?).

[BigBallinStalin]

OK, but the point of this thread is not to discuss the geographical reach/centralisation catchment aspects, but say I could organise tomorrow for your system to be implemented worldwide, and every smaller region produced a prospectus detailing their policies, which preferences about how to spend taxes would you be looking for as ideal?

I'm just addressing your concern about freeriders/abusers and how greater centralization drives further from that solution (e.g. having national government provide govt. welfare), but I'm sorry if that's getting too off-topic.

In regard to the question, Adam Smith lays out an ideal model:

The Theory Of Moral Sentiments, Part II Section II Chapter III, p. 86, para.4.

Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.

Of course, he's talking about countries which have developed the cultural/civil institutions conducive to trade, and for the moment we're keeping aggressive neighbors off the table. During the transitions from Soviet-esque planning, it wasn't that easy because of the institutional changes from decades of oppressing most forms of trade with its unintended consequence of creating underground markets within which their brutal rules emerged--e.g. think of any shadow economy in a country where drugs are illegal.

[BigBallinStalin]

BBS, I'm not sure that it's that productive to tell a company who spent hundreds of millions of dollars making a film that the solution to people stealing their film is for the developer to be more creative in their marketing. The majority of people who just want the film will steal it regardless of whether or not each legitimate copy comes with a shiny box and a poster.

Plus, if a movie is available online for free then the value of the official version drops to 0. In your scenario, people will not pay $15 for a DVD that comes with a nice booklet unless they consider the booklet to be worth $15. The DVD available for free (or very little cost) on pirate has no value within the package being offered by the company. The movie company thus has to produce their movie and give it away for free, and then recoup all their costs by offering extra products (which begs the question: why make the film in the first place?).

It doesn't matter if they like it or not because they still have to deal with it, and deal with it they have--but in a variety of ways.

Also, the degree of the problem is not as severe as imagined. Although we may view torrenting as extremely easy, amazingly many people who've I met hardly know how to do it, and if you give them step-by-step instructions, it can still be difficult (e.g. which torrents have viruses, which don't; how to minimize risk of nuisances, etc.).

And, even if there's some group out there who can consume movies for a negligible cost, how much has that affected the target audience? (e.g. movie-goers). Does a downloaded film provide the same experience as the movies? How many people are patient enough to wait for the movie to release to DVD--instead of watching the low-quality camera recordings?

$15 booklet v. $1 DVD, who knows? But it's not like prices must remain fixed, and the costs of production can be reduced in order to compensate for lesser profits (gee, less special effects--but with many movies, that's still not the case). Or, actors would have to lower their prices; otherwise, less movies would be produced.

Then there's the moral constraint. Some people don't download nor buy $1 versions. Movie producers can also get on the media bandwagon and proclaim, "cyber piracy is killing us, it's immoral, buy my stuff," and this works.

Therefore, I don't think the underlined is as dire as you've imagined. Overall, your expected consequences aren't occurring. If you took your assumptions to their logical end, then absolutely no big-budget movies would be made, but obviously that's not the case. (Even if you mention some factor like legal enforcement, it's ineffective, and in my opinion can't explain these outcomes which 'shouldn't' be occurring yet do).

The main point about the booklets is that profit is not only obtained from one single good or source, but rather it comes from a bundle of them, and that costs can be reduced if profits are expected to be less. Markets and their prices do a lot of this heavy lifting without any of us having to worry about it.

Also, there's a counter-intuitive factor going on. If you can release your music for 'free' on the internet, would this increase your target audience? Would you consequently profit more from tours? Are the biggest losers really just the old-fashioned CD distributors--and not the artists? I think a lot of this is occurring with film as well.

[mrswdk]

I would argue that DVD piracy is not as widespread in the US thanks to the government, so the effect will obviously be more minimal. It would be useful to compare the US to China, where a counterfeit DVD shop in a high street a fairly unremarkable thing.

If they were low-quality camera recordings then no one would buy them, but they're not. They're straight rip offs of cinema-quality product (if they weren't then I wouldn't buy them ).

[mrswdk]

Add textbooks to the debate. My textbooks are downloaded in full and free in .pdf format from whichever dodgy site they've been uploaded to.

[BigBallinStalin]

I would argue that DVD piracy is not as widespread in the US thanks to the government, so the effect will obviously be more minimal. It would be useful to compare the US to China, where a counterfeit DVD shop in a high street a fairly unremarkable thing.

If they were low-quality camera recordings then no one would buy them, but they're not. They're straight rip offs of cinema-quality product (if they weren't then I wouldn't buy them ).

Right, but that comes later; there's a lag between cinema release and cinema-quality products (usually the high-quality downloadable versions are released when the movie is released on HD TV programs). Much of what I mentioned earlier remains unknown.

I'm not really sure how prevalent DVD shops are in the US. Sure, they're not as exposed as the Chinese versions, but I don't live in the right neighborhoods nor do I know the right people to go to if I wanted the pirated DVDs. I imagine that it's easy to start such a business without the authorities being able to effectively shut them down---look at the drug war; how effective is that enforcement? (Not by much).

[BigBallinStalin]

Add textbooks to the debate. My textbooks are downloaded in full and free in .pdf format from whichever dodgy site they've been uploaded to.

People made similar arguments against paperbacks and TV. Turns out they were wrong. The main issue against these innovations is that the status quo is going to lose out while newer producers and the more readily adaptable producers are going to win; however, the book, movie, and TV industries didn't collapse. The producers who refuse to adapt are the ones lobbying government to cover the costs of their business (e.g. the large publishing houses and the large movie producers, MGM and the like).

That's why much of this debate shouldn't be taken so seriously in defense of the status quo; it's a story of rent-seeking in the face of 'creative destruction'.

Then, apply what I said about movies and what not to the ebook position. I don't have to repeat myself.

[Anarkistsdream]

How can only three people agree with me about taxes being used for "Business startup grants/loans?"

This is how you help people to help themselves...

[Metsfanmax]

How can only three people agree with me about taxes being used for "Business startup grants/loans?"

This is how you help people to help themselves...

I wouldn't get behind this as a role of government in general. I would support it in specific circumstances where the barriers to entry are very high but the social payoff is large in the long run. For examples, I support this in the arena of nuclear power but I do not support government subsidies or loans for solar, wind, etc.

[BigBallinStalin]

How can only three people agree with me about taxes being used for "Business startup grants/loans?"

This is how you help people to help themselves...

Because government does not operate in a blackbox devoid of perverse incentives from politicians and bureaucrats. Chambers of Commerce, which are predominantly used to allocate confiscated funds tax revenues for certain businesses, are a great way of rewarding special interest groups in exchange for political contributions. This form of funding typically masquerades under the banner of Moral Rhetoric ("We're helping people help themselves"), and it reinforces crony capitalism, so you'll have select businesses leaning on their political relationships in order to influence public policies and regulate for discouraging competition (e.g. in cities with laws and regulations which hamper the market of mobile food vendors).

There's also alternatives like philanthropic societies, crowdsourcing, and the large variety of banks (from loans to microloans), which obviate the alleged necessity of government in this sector.

[mrswdk]

The fake DVDs I've bought have been cinema-quality copies that were on the shelves within days of the movies' cinema releases.

Even fairly smart shopping centers are sometimes home to fake Apple or Nike stores. Beijing's most famous clothes market (the Silk Market), which is proudly hyped to foreign tourists, is basically just six floors of people selling fake clothes.

It's not like such cases are limited to the government turning a blind eye while foreign companies get ripped off, either. Chinese beer, mineral water and cigarettes are all cheap as sin, yet shops and bars are still awash with fakes.

China sucks at lots of things but its piracy and counterfeiting industries are AAA.

[Anarkistsdream]

How can only three people agree with me about taxes being used for "Business startup grants/loans?"

This is how you help people to help themselves...

Because government does not operate in a blackbox devoid of perverse incentives from politicians and bureaucrats. Chambers of Commerce, which are predominantly used to allocate confiscated funds tax revenues for certain businesses, are a great way of rewarding special interest groups in exchange for political contributions. This form of funding typically masquerades under the banner of Moral Rhetoric ("We're helping people help themselves"), and it reinforces crony capitalism, so you'll have select businesses leaning on their political relationships in order to influence public policies and regulate for discouraging competition (e.g. in cities with laws and regulations which hamper the market of mobile food vendors).

There's also alternatives like philanthropic societies, crowdsourcing, and the large variety of banks (from loans to microloans), which obviate the alleged necessity of government in this sector.

But doesn't leaving this in the private sector give us the same issues with interest rates and the like that we currently are dealing with in the medical insurance field?

[BigBallinStalin]

How can only three people agree with me about taxes being used for "Business startup grants/loans?"

This is how you help people to help themselves...

Because government does not operate in a blackbox devoid of perverse incentives from politicians and bureaucrats. Chambers of Commerce, which are predominantly used to allocate confiscated funds tax revenues for certain businesses, are a great way of rewarding special interest groups in exchange for political contributions. This form of funding typically masquerades under the banner of Moral Rhetoric ("We're helping people help themselves"), and it reinforces crony capitalism, so you'll have select businesses leaning on their political relationships in order to influence public policies and regulate for discouraging competition (e.g. in cities with laws and regulations which hamper the market of mobile food vendors).

There's also alternatives like philanthropic societies, crowdsourcing, and the large variety of banks (from loans to microloans), which obviate the alleged necessity of government in this sector.

But doesn't leaving this in the private sector give us the same issues with interest rates and the like that we currently are dealing with in the medical insurance field?

Well, two points. (1) Interest rates are useful in that they provide a good enough measure for comparing the value of something today with the value of something tomorrow. Since interest rates are largely dependent on risk, they can also provide a good reflection of risk v. reward. I'm generalizing for the sake of space.

(2) However, interest rates are largely affected by public policies (e.g. capital controls and monetary policy--which has kept interest rates near zero for several years). What you see today is largely the result of monetary policy from the Fed. Interest rates essentially reflect prices of various goods across time, and when government messes with prices, you tend to get a lot of unintended consequences (e.g. their encouraging investments in housing up to the recent financial crisis; their lowering of interest rates which stimulates more investment in higher yielding investments--which tend to be longer-term and/or more risky, which consequently causes structural problems in the economy, especially when the economy will eventually readjust through another recession).

The government is largely involved in interest rates, and many of the problems which concern you today are largely the result of government policies--not the private sector. Anyway, I don't see how this is relevant to the position that we should support government-provided loans.

If you want sensible prices for shoes, you leave government out of it. If you want sensible prices for currencies and interest rates, you should leave government out of it (which is my brief view against central banking and legal tender laws. Inflationary/expansionary monetary policy is the government's backdoor for indirectly taxing people--and that affects everyone).

[Anarkistsdream]

Thank you for the excellent reply... I am by no means an economist, and that helps me have a more realistic view of how things work.

[Symmetry]

Thank you for the excellent reply... I am by no means an economist..

Neither is BBS, which is why you end up with explanations like:

"The government is largely involved in interest rates"

Shortly followed by,

"f you want sensible prices for currencies and interest rates, you should leave government out of it."

But hey, whatever works for you Anarkistsdream.

[BigBallinStalin]