That requires (1) the failure to be visible and self-evidently the result of political processes and decisions (2) people to act on (1) and actually vote (3) alternate candidates that have a genuinely different plan.
>That requires (1) the failure to be visible and self-evidently the result of political processes and decisions (2) people to act on (1) and actually vote (3) alternate candidates that have a genuinely different plan.
>It's not that easy to ensure that all 3 happen.
That raises a couple of questions:
1. Why aren't problems visible?
Is it a failure of local government to disclose how they're spending your money? If so, why do you and your neighbors allow that? It is your money and your town after all. Especially since, even in a medium-sized city, a few hundred people who care about their quality of life can completely upend politics as usual.
2. Why don't people "act on [lack of transparency] and actually vote"?
Again, this seems rather odd to me. I can certainly understand (although I don't agree) that folks may think that Federal, and even some state elections don't give them any say. But local elections are a very different story.
3. Is it really true (as you seem to contend) Is it your contention that overwhelming majorities of people everywhere just don't care about the places they live, or for what purposes their tax dollars are used?
Can you actually see the almost complete failure of garbage disposal and recycling in your community? You cannot, because the failure doesn't happen there (mostly), and because most of us are not interested enough to ask (or research) the questions we would need to in order to understand how badly the people tasked with taking care of this have screwed it up.
> 2. Why don't people "act on [lack of transparency] and actually vote"?
Right now, I live in a mostly rural county in New Mexico. Before that, I lived right on the edge of Philadelphia, 300 yards outside the city line but closer to downtown than most of the city. I've lived in lots of other places too, both in the US and Europe, even Israel. In all of those places, a local vote is vote for someone who will be extremely constrained by the status quo and the larger political entities the surround us. So sure, I could vote for someone who might take some steps to improve a particular aspect of how the county/city/town/village deals with this or that, but it will always be taking place within the context of legislative, economic, energetic and social forces that are much, much harder to change. This can make it challenging to see the virtue of local elections, and thus to care about them in a way the reflects the extent to which we do actualy care about our communities.
But then equally why would these problems be solved by private enterprise?
Why would using private enterprise allow these jobs are going to be done better?
These are fundamentally unanswered questions in this thread.
We would have even less visibility than before - I got no idea how Microsoft delivers Windows or how a private hospital is tracking performance wise? But a government gives me some kind of mechanism to see this.
Government acts as an imperfect (as you have carefully detailed) intermediary between those the service provider and service recipient the citizen.
And it is only as imperfect as the system is designed, there are adjustments that can be made, slowly sure, but they can be made.
No, but it is obvious that Musk could mobilize a lot of talent that might have been spent on less innovative work elsewhere.
It is my suspicion that there is actually a lot more talented people than we tend to think and the real problem is educating and managing them well.
There is an interesting case of Florence, Italy, which in the 14th and 15th century produced an incredible set of world class painters. That school is unmatched until today. We think that world class painters must be principially very rare, but maybe not so much. In a relatively short span of time, recruiting mostly students from Northern Italy only, the Florence school could produce quite a significant percentage of artistic heritage of the whole humanity.
I don't understand what a bunch of engineers at one of Musk's companies, or the ease of generating bunch of very good painters in Firenze in the 15/1600s have to do with the problem of improving/fixing city/local governance.
Consider Hsue-Shen Tsien, father of Chinese rocketry. He returned to China in 1955, when it was a developing country. Talent can be built up, it depends on the environment.
Elon Musk, who got his start through his sapphire-mining family is the best example of that, he knows how important access to money and politicians is.
I understand why you say this, and I used to think that way myself and it makes rational sense when you compare the way government runs when you look at how you most probably work in an efficient team, getting things done etc (or maybe not!) .
But..
This seems too simplistic a rule to apply to large and complicated projects which likely are the case with creating and maintaining infrastructure.
If private investment can't calculate expected return they don't do it and this often is the case with complicated projects there is often high risk involved and no easily attainable reward (from a financial perspective).
This is why public / government undertakes these projects because they know what the expected benefit is to society and are not driven by ROI in the same way as private enterprise.
Your model needs to take this into account in order to be more persuasive.
It's extremely rare. Ask yourself how many companies from the 20th century are now defunct vs government programs (or governments in general).
You can probably count on one hand the number of governments that have "gone out of business" (so to speak), in the last 40-50 years. You'll need several people to tabulate the set of private enterprises that have gone bankrupt, defunct, or M&A'd out of existence over the same timespan, in the US alone.
The last 40-50 years have been pretty stable. But even so I’d guess that 20% of world governments have functionally gone out of business.
If you pick the 20th century, then the number of governments that have “failed” is really large as a proportion of total governments. We think of countries like France as having been around for hundreds of years, but their current constitution is only 62 years old. Romania had three different governments in about 50 years. Japan, China, and Vietnam all replaced their governments. Czechoslovakia came into being and disappeared.
If you count having lost effective control of a significant part of their country as a government having failed, there are plenty. No-one would say that Syria or Libya have a single functioning government controlling the country at the moment, and you can throw swathes of central Africa in there as well.
Other than a coup, civil war, or a foreign takeover, there isn't really a way for a government to definitely 'fail', but no-one would say that these events are unheard of.
> If you count having lost effective control of a significant part of their country as a government having failed, there are plenty.
Losing control of a significant part of a country isn't comparable to private enterprise failure, it's more comparable to the CEO of a company being replaced.
Imagine what retail would have been like if, instead of Sears being essentially replaced, we just elected a different set of leaders to run the same organization.
> No-one would say that Syria or Libya have a single functioning government controlling the country at the moment, and you can throw swathes of central Africa in there as well.
Right, and in general we consider that instability to be a bad thing, and a key goal of UNESCO (and adjacent organizations) is to make African nations as stable as Western democracies. That kind of stability just isn't sought out in the private sector.
> Other than a coup, civil war, or a foreign takeover, there isn't really a way for a government to definitely 'fail', but no-one would say that these events are unheard of.
If you were to ask me to pick a system where change happens through violence and bloodshed (civil wars, coups) vs peaceful financial transactions (M&A, bankruptcy) — I would choose the latter any day of the week.
Of the items in that list < 100 years old, the vast majority came about through violence via revolution, civil war, genocide, or regime change. That's a bug, and not a feature. Peaceful restructuring of government is rare, and when it happens, it’s noteworthy.
In contrast, peaceful restructuring of private enterprise (via startup incorporation, bankruptcy, or M&A) is just a way of life. People didn't die when PanAm, TWA, and Circuit City went out of business. People didn’t die when GM was restructured.
This criticism and comparison is ridiculous, there is no such thing as 'violent restructuring of private enterprise' because companies don't have armies, governments do.
And 2008 has killed plenty of people, by rendering them homeless, hungy, and unable to afford healthcare.
It's really not. We have more than enough history to corroborate.
> And 2008 has killed plenty of people, by rendering them homeless, hungy, and unable to afford healthcare.
Right, and these events are rare and noteworthy also — the only other time that had happened before that was during the 1930's. The same cannot be said for structural changes in government. In addition, if you think the scale and severity of economic deaths of despair caused by 2008 can be compared with the civil wars in the Middle East, the Balkan Kosovo War, the World Wars (and Holocaust), or what's going on in Central Africa...I really don't know what to say.
1. There is definitely a difference between indirect/preventable deaths and direct deaths due to war/murder. If you died of cancer tomorrow because you couldn't afford treatment, it would be different than if I straight up shot you in the head. The cumulative deaths caused by motor accidents also outnumbers the Kosovo casualty count (by a lot), and yet we do not consider the former to be worse than the latter. Also, drug overdose deaths, while sad, are less devastating to society than war and genocide.
2. Even if indirect/preventable deaths were somehow comparable to war/revolution/genocide, this is pretty much unique to the US, whose government inefficiently allocates welfare. Canada, Germany, Singapore, Australia, New Zealand, Switzerland, Taiwan, Belgium, Netherlands etc etc etc all rely on the private sector to deliver the majority of their goods & services. The fact that the US has an inefficient welfare system is somewhat orthogonal to the issue at hand: whether the (peaceful) creative destruction yields more efficient outcomes than structural rigidity and institutional sclerosis.
If the US instituted a UBI or more efficiently allocated its public health spending to include those that may be unable to afford healthcare, it doesn't change the fact that in the majority of liberal democracies that rely predominately on the private sector, structural change doesn't need to be brought about through violence, even if the governments and their institutions remain rigid.
1. Maybe not devastating to your particular class of society. Motor accidents are not as strongly linked to economic despair either, and certainly not an effect of ideological choice.
2. It's hard to deny that the cause of this is not fundamentally caused by an over emphasis on free market ideology.
> Maybe not devastating to your particular class of society. Motor accidents are not as strongly linked to economic despair either, and certainly not an effect of ideological choice.
Yes, in fact the upper, upper-middle, and largely the (prudish) middle class of society isn't as impacted by drug overdose deaths as they are about the threat of genocide and war. The latter impacts everyone more or less equally. The former impacts a very narrow segment of society. It should then not come as a surprise that society assesses the risk (and devastation) of the two in different ways.
You need to remember that the median American is NOT an opioid addict. In fact the median American is fairly rich -> https://en.wikipedia.org/wiki/Disposable_household_and_per_c.... While it is truly sad that there exists poor people that are addicted to opioids (and dying as a result), we have to remember that it's a small minority of society as a whole, and the risk of becoming a drug addict isn't uniform.
> It's hard to deny that the cause of this is not fundamentally caused by an over emphasis on free market ideology.
"Free market ideology" is entirely orthogonal to the issue, because the issue you pointed out is isolated in the US, but "free market ideology" is the predominant ideology of the liberal world where the issue you pointed out is notably absent.
The OECD average is 21%. There are countries that have lower public sector size than the US (Netherlands, Germany, South Korea, New Zealand, Japan, Austria) that have comparable (if not higher) human well-being. You cannot compare life in those countries to life in Syria/Iraq/Afghanistan, Kosovo, Central Africa, etc etc.
Since you can't reproduce that causation in other countries, you cannot conclude that there exists such a causation. It's very much a "US" problem. Put simply, the safety net in the US has some holes in it.
I didn't expect you to double-down on "well, it's just the poor anyway" but I probably shouldn't be surprised by now.
I wrote "over emphasis". Then you just go on about some irrelevant stats regarding the size of the public sector etc. While other countries realise that the "free market" needs to be curtailed in many spheres to not do too much damage, the US have decided that this isn't an issue and people need to take care of themselves on the "free market". Hence the lack of proper welfare and universal health care (and we can go on to worker benefits if you'd like, or perhaps higher education?).
> I didn't expect you to double-down on "well, it's just the poor anyway" but I probably shouldn't be surprised by now.
Yes, that is exactly the point I'm making. Strictly from a utilitarian perspective, civil war/genocide affects more people, more uniformly than drug addiction. Attacking that from "won't you think of the poors?" angle isn't a constructive argument to be made.
And lest we forget, the original point of argument was that peaceful restructuring of corporation is preferable to violent restructuring through wars, coups, and genocide. "What about the drug overdoses?" is an odd argument because I don't know anyone that would say "I prefer peaceful creative destruction over war, except if there are opioid overdoses, in which case I prefer civil war and violent coups, yes."
> I wrote "over emphasis". Then you just go on about some irrelevant stats regarding the size of the public sector etc.
Isn't that exactly what "free market" means? Economic freedom and the size of the private sector?
> Hence the lack of proper welfare and universal health care (and we can go on to worker benefits if you'd like, or perhaps higher education?).
Yes, and this is a failure of government policy. The US healthcare system is the least free market there is. I write software for claims processing and healthcare pricing systems for a living, and I can tell you right now that the US's healthcare system is a byzantine nightmare. The only thing remotely "market-like" about the system is that there are an obscene amount of profits...but that's all downstream of asinine incentives brought about by policy. It isn't some grand accident of the free market.
I'm in agreement with you that this needs to be fixed. However the fact that these problems exist in the US but not elsewhere suggests that it also has very little to do with "free market ideologies", and your insistence to the contrary regardless of the empirical evidence suggests that your approach to this is purely driven by ideology.
> I'm in agreement with you that this needs to be fixed. However the fact that these problems exist in the US but not elsewhere suggests that it also has very little to do with "free market ideologies", and your insistence to the contrary regardless of the empirical evidence suggests that your approach to this is purely driven by ideology.
This is absurd. That the US is a country where business, markets, profits have been prioritized over people is blatantly obvious for everyone that's not a free market fundamentalist where every single instance of a negative outcome needs to be excused by either "it's not free enough" or "other's are actually also rather free", or ofc, put the blame on the government.
You also jump onto the wording of course. I mean it in a general sense, free market, capitalist, market oriented society that applies it to much more spheres of society than other countries. So give me a break that I'm the one "purely driven by ideology" when you're writing with a convert's fervour.
> regardless of the empirical evidence
And the differences in worker benefits and welfare (etc...) is not empirical evidence of a society that's gotten way too hooked on capitalism?
> I write software for claims processing and healthcare pricing systems for a living
In a well functioning society your job should not exist.
> This is absurd. That the US is a country where business, markets, profits have been prioritized over people is blatantly obvious for everyone that's not a free market fundamentalist where every single instance of a negative outcome needs to be excused by either "it's not free enough" or "other's are actually also rather free", or ofc, put the blame on the government.
> And the differences in worker benefits and welfare (etc...) is not empirical evidence of a society that's gotten way too hooked on capitalism?
Many countries with strong unions have seen a similar or even greater decline in labor share of income than the US. The US is not really much different than any other advanced economy on that front: https://www.mckinsey.com/~/media/mckinsey/featured%20insight... (page 5). In the US, labor’s share of income is less than France, about the same as Germany, and more than Spain. It’s significantly higher than Sweden, which has robust unions. Moreover, nearly all the decline in labor’s share of income happened between 2000 and today (page 6). The decrease was very slight from 1947 to 2000. But unions stopped being a significant force in the US long before 2000.
> In a well functioning society your job should not exist.
This reaction of yours is illuminating, because it shows how little you know about how healthcare even works. I don't work for an insurance company, I write software that's used by insurance companies to process claims and price fees. This is an abstract actuarial function that's necessary regardless of whether a private entity or a public entity is the insurer. Public government insurers do not manually process claims by hand one-by-one. Ditto pricing, I work on generating fee schedules. You know where else fee schedules are used? Medicare and Medicaid. Their actuaries use software similar to what I work on to model risk and determine what premiums (or tax contributions) should be, and how much physicians should be paid.
I make a statement that countries have realized that the free market is harmful in certain spheres and you go on about the economy as a whole instead, which I have never claimed to not be capitalist/market economies.
I make a statement about the vast difference in worker benefits and welfare and you go on about the labor's share of income instead, which I have never claimed to be higher.
> I write software that's used by insurance companies to process claims and price fees
Insurance companies should play no role in healthcare, and they certainly don't where I live.
When you’re backed into a corner, you appear to resort to name calling and hostility, as always.
I’m directly addressing your arguments by showing you that reality is a lot more complicated than you seem to think, by the numbers. Your entire world view neatly fits into a packaged ideology that only seems to reconcile with a warped version of how the US actually works (as well as other countries).
> Insurance companies should play no role in healthcare, and they certainly don't where I live.
I understand you feel that way. What I’m saying is that my software is used by your government. My job will exist regardless of who is actually paying for healthcare, because I’m not in the business of financing, I’m in the business of claims processing, provider payment, and automated price generation. These are functions that government payers also use to pay physicians and to drive their per capita costs down also. It will always be a part of the value chain.
Also, private insurance companies play a role in healthcare in many prosperous countries, including Germany, the Netherlands, Belgium, Switzerland, Singapore, Australia, and New Zealand.
You haven't directly addressed anything. I just gave you two very clear examples where you just change the subject to something I've never claimed instead of answering the questions/arguments.
> How did you come to the conclusions that, life for life, a drug user's death is any better than someone getting shot in Afganistan?
Because getting shot in Afghanistan (especially during a war) is a random event, and the risk is spread evenly among society. The risk of drug overdose is concentrated. You don't accidentally trip on heroine, it takes a set of (largely predictable) circumstances to get there.
Society correctly assesses this risk, which is why solving the opioid epidemic polls a lot less favorably than policing and defense. The idea that society (writ large) cares more about preventing genocide and war than preventing isolated drug deaths isn't really that controversial.
Is the Lebanese government "in business" or no? That is a question with fuzzy answer, but if no government is 0 and competent government is 1, Lebanese government right now may be 0.02 or so.
Czechoslovakia, where I was born, disintegrated in 1992. The transition was peaceful, but the federal government simply is no more.
I mean, in theory, democracy ensures that inefficient leaders lose office, except that reality rarely lives up to theory.
IRL, the business models of most major tech companies are pretty impervious to most inefficiency. Most of their leadership is beyond the reach of shareholder discipline too. Monopoly makes a good moat.
Banks aren't accountable for their own losses. How many more examples do we need? Large company bankruptcies are a rarity, and when they do happen (eg american airlines) the resulting mess just enforces the bailouts mentality. Dealing with them is an exercise in kafkaesque patience and it is impossible to work out where their mindless bureaucracy starts and regulation begins.
In 2020, an anti-bureaucracy worldview that sees the dividing line as public/private is foolishly anachronistic.
Sure "some" mechanism exists for them to go out of business. That's about as useful as the ballot for creating efficiency.
> I mean, in theory, democracy ensures that inefficient leaders lose office, except that reality rarely lives up to theory.
It's not just replacing inefficient leaders that's an important mechanism for "efficiency", it's also restructuring organizations. Democracy, at best, just means that you have different leaders, but the mostly the same set of bureaucrats operating the same programs. Private enterprises, on the other hand, allow us to whole-sale replace entire purveyors of goods & services with entirely different structures of organization in a manner that's difficult to reproduce for a monolithic public monopoly.
Imagine what retail would have been like if, instead of Sears being essentially replaced, we just elected a different set of leaders to run the same organization.
> IRL, the business models of most major tech companies are pretty impervious to most inefficiency.
When a business is unable to collect enough money to continue operating, it goes out of business. Almost no major tech company has been able to continue operating without either sustaining themselves, or collecting investment.
> Most of their leadership is beyond the reach of shareholder discipline too. Monopoly makes a good moat.
Sure, and monopolies are bad for the same reason. But most industries aren't run by monopolies. You only hear about the ones that are, because they're so noteworthy.
> Sure "some" mechanism exists for them to go out of business. That's about as useful as the ballot for creating efficiency.
I don't think that's true at all. You can count on one hand the government programs that have gone defunct in the last 60 years. The number of private enterprises that have gone bankrupt, defunct, or M&A’d out of existence over the same timespan is almost countless.
You're 100% right about the banks and bailouts, though. That's not a private enterprise problem, though — that's a "our government is doing a stupid thing" problem.
Mineral exploration & refining, media, technology, finance & banking, military industry, online retail... what % of the economy are we at with just these?
Market discipline, creative destruction and such work to full effect for restaurants, hairdressers, landscaping... It's a small part of the economy, but good. Pretty unbureaucratic and efficient. Well functioning markets are great when you have them, they just aren't most of the economy.
Some industries (eg FMCGs, shipping) are concentrated, but a degree of market discipline still operates. Not like hairdressing, but there is at least price competition within a limited frame. Some private industries are just impossible to pick apart from government: Health and pharmaceuticals, all government contracting, real estate, etc. Most market mechanisms don't apply here either. They certainly don't apply in "systemic" situations.
It is a fact that a lot (arguably most) of the economy is very far from the market ideal that restaurants operate within. It's not totally black and white, but thinking of these issues in a 1970s frame is silly.
That doesn't mean private and public are identical, but a Smithian pin factory is as bad a model for most of the economy as a local fire department.
> Mineral exploration & refining, media, technology, finance & banking, military industry, online retail... what % of the economy are we at with just these?
None of these are monopolies. These are all concentrated, but not monopolized. To your later point, market discipline still functions in concentrated industries.
> Market discipline, creative destruction and such work to full effect for restaurants, hairdressers, landscaping... It's a small part of the economy.
The vast majority of industries are either operated by many small players, or a few large players (concentration). Actual monopolies are extraordinarily rare.
> Health and pharmaceuticals, all government contracting, Real Estate, etc. No market mechanism here either
This is also untrue.
Health & pharmaceuticals: Same story. concentration? Perhaps. Monopoly? Not by a long shot. You have major players like Johnson & Johnson, Pfizer, Merck, GSK, Amgen BV, Abbott, McKesson, etc etc.
The private sector isn't a silver bullet, and there's always a place for democracy and governments. But we have to be real about what works where, and what doesn't.
By your definition, I don't think I could sneak the east india trading company as an example of a monopoly.
We we speaking in a context. If we can't agree that any of these industries are monopolized... If we have to start by assuming that the market dynamics of a pin factory are at play in commercial banking... IDK where to go exactly.
Besides that, the other examples I gave were explicitly of non monopolies. Market dynamics like competition, creative destruction and such are not in operation. Monopoly (extreme concentration, trusts, oligopoly, monopsony, oligopsony, captive bottlenecks... do we really have to do this or can we just use "monopoly" as shorthand like normal people?)
>> we have to be real about what works where, and what doesn't.
We have to be real about what is a market, in the Smithian sense is, and what isn't. Military industry is not a market. There are a few big players with most of the market. One buyer. Political dynamics are many times more important than market dynamics. Same for commercial banking, pharmaceuticals etc.
In 2020 it is simply trite to look to the relative efficiency of government vs private (non-market) as the lens through which everything is seen. If we have to look through that lens, lets at least look through it honestly. Private vs Public has nothing to do with market discipline because market discipline doesn't exist for most of the economy... particularly if you measure it by market cap. Monopolism (using the term widely) is just one of the reasons, but there are others. The world is complicated and commercial banking is not subject to the same dynamics as local plumbing businesses. Pretending that they are is madness.
BTW, Adam Smith would have been on my side of this debate, as would have most of the old liberals. Market ideology has gone so far that people don't even need a market to apply it to.
