[ldrews]

hrothgar,

What you call "greed" I call "self-interest". The rewards/payoff from self-interest come in many forms and many sources, not just financial. Approval of others, self-esteem, feelings of pride, etc., are just some of the payoffs that I think we all strive for. It is my opinion that any activity that one engages in that does not return more benefits, measured over time, than the costs incurred will be discontinued. And if I am willing to look at the longer timeframes and wider environment to assess the payoffs, then it is what I would call "enlightened self-interest".

I assert that almost everyone is motivated by such self-interest most, if not all, of the time. There may be a truly altruistic person out there, but I have yet to meet him/her.

So, when someone extolls the "public good", I first check my wallet and then look for the payoffs that person is receiving from the "public good". I guess I am just a cynic.

[hrothgar]

ldrews, on 2017-January-13, 19:58, said:

From wikipedia:


Comment?

Yeah, here's the thing...

One of my graduate degrees is in economics which I studied at schools like MIT and University of Chicago.
And I trust what my professors taught me more than I do random assertions on Wikipedia.

I'm not about to dredge my old textbooks out of storage, however, if you like you can look at slide 40 in the following

http://www.rajchetty...cs_lectures.pdf

[ldrews]

Slide 40:

First Welfare Theorem
Private market provides a Pareto e¢ cient outcome under three
conditions
1
No externalities
2
Perfect information
3
Perfect competition
Theorem tells us when the government should intervene

[ldrews]

hrothgar,

I have no competency in formal economics so you have me there. But I do kind of like the Austrian School. They say the following:

Arguments against

There are several arguments against the public goods theory:

there is no way of knowing what is the "optimal" amount of the good produced
many other goods can be to some degree considered public with the imprecise definition
the presence of the state changes the incentive structure. Companies may declare their product for a public good to receive taxpayer funding.[2]
many of the 'public goods' are successfully produced in the private sector
the theory does not at all prove that the government should produce these goods
many of the goods government actually does produce do not correspond to the economist's definition of public goods, so the theory poorly explains the government's actual role in the economy[3]

[hrothgar]

ldrews, on 2017-January-13, 20:30, said:

Slide 40:

First Welfare Theorem
Private market provides a Pareto e¢ cient outcome under three
conditions
1
No externalities
2
Perfect information
3
Perfect competition
Theorem tells us when the government should intervene

Sorry, slide 41

Markets may be incomplete due to lack of prices (e.g. pollution)
Achieving efficient Coasian solution requires an organization to
coordinate individuals that is, a government

This is why govt. funds public goods (highways, education, defense)

[ldrews]

Quote

Markets may be incomplete due to lack of prices (e.g. pollution)
Achieving efficient Coasian solution requires an organization to
coordinate individuals that is, a government

This is why govt. funds public goods (highways, education, defense)

But doesn't an efficient Coasian solution depend upon well defined property rights and zero transaction costs? How does the use of government (a coercive tool) allow for a negotiated arrival of an efficient allocation? And how does this apply to education which can probably be formulated using property rights but has non-zero transaction costs?

[hrothgar]

ldrews, on 2017-January-13, 20:50, said:

But doesn't an efficient Coasian solution depend upon well defined property rights and zero transaction costs?

The Coasian solution is offered as a reference point, not because anyone believes that it is achievable.
As you note, the Coasian solution does require zero transaction costs.

Quote

How does the use of government (a coercive tool) allow for a negotiated arrival of an efficient allocation?

Through taxation.

Quote

And how does this apply to education which can probably be formulated using property rights but has non-zero transaction costs?

It might not be possible to get to a perfect solution, but one can get closer towards one

[hrothgar]

ldrews, on 2017-January-13, 20:35, said:

hrothgar,

I have no competency in formal economics so you have me there. But I do kind of like the Austrian School. They say the following:

That's nice.

The Austrian School are a bunch of cranks who are not taken remotely seriously by mainstream economists.
Don't get me wrong, Hayek and von Mises had some useful things to say, especially about the limitations of central planning. But Austrian School is crazy.
For god's sakes, they favor returning to the Gold Standard....

The only place that you find these nutjobs are right wing think tanks and very small number of universities where the Koch brothers have set up welfare programs for the Austrians.
(George Mason being the most obvious example)

[ldrews]

Quote

For god's sakes, they favor returning to the Gold Standard....

Seems to me that they favor using something as a currency that the government cannot debase. Gold being one obvious choice.

So what do you think of cryptocurrencies such as Bitcoin?

[ldrews]

Quote

Quote
How does the use of government (a coercive tool) allow for a negotiated arrival of an efficient allocation?


Through taxation.

So, if I am a retiree living in a small cabin outside of town, how does the taxes I pay to support education benefit me?

And do I have any choice in the matter? Does the government coerce me to pay the taxes to support education whether I agree with their benefit analysis or not?

[hrothgar]

ldrews, on 2017-January-13, 21:27, said:

Seems to me that they favor using something as a currency that the government cannot debase. Gold being one obvious choice.

So what do you think of cryptocurrencies such as Bitcoin?

Bitcoin is an interesting idea, however, it suffers from a number of flaws that means that it is (currently) impractical as a currency

1. The bitcoin market is much too thin. As such, the value of bitcoins relative to real currencies fluctuates dramatically. Holding bitcoins might be a fun was to speculate. Its not a (currently) a good store of value which is one of the defining characteristics of money. So long as governments are in a position to control people's ability to covert bitcoins into real assets I don't see this changing.

2. Many of the properties of bitcoins such as anonymity and being irrevocable turn out to depend on the assumption that bitcoin mining is being done by a large number of independent actors. It turns out that bitcoin mining costs a lot of electricity and almost all of the mining either happens in Iceland (where electricity is dirt cheap) or China (where the govern is providing subsidized electrity to mining consortia). For all practical purposes, the Chinese government is in control of the blockchain and can do whatever they want to it.

3. Bitcoins are inherently deflationary which is not considered a good feature in an economy.

[hrothgar]

ldrews, on 2017-January-13, 21:35, said:

So, if I am a retiree living in a small cabin outside of town, how does the taxes I pay to support education benefit me?

Not the point

Quote

And do I have any choice in the matter?

No

Quote

Does the government coerce me to pay the taxes to support education whether I agree with their benefit analysis or not?

Yes

At a more meta level, if you decide to live within an organized society you are accepting a social contract and part of that social contract involves ceding certain powers to the government. And living off the grid or "going Galt" is not sufficient to withdraw from said contract.

[ldrews]

Quote

At a more meta level, if you decide to live within an organized society you are accepting a social contract and part of that social contract involves ceding certain powers to the government. And living off the grid or "going Galt" is not sufficient to withdraw from said contract.

I was born in the US. I am not aware of deciding this. I also do not remember ever consciously accepting a social contract. Perhaps you could provide me a copy of the agreement with my signature?

[hrothgar]

ldrews, on 2017-January-14, 06:15, said:

I was born in the US. I am not aware of deciding this. I also do not remember ever consciously accepting a social contract. Perhaps you could provide me a copy of the agreement with my signature?

I believe that you will find said signature on your tax forms, your drivers license, your social security card, your passport....

Moreover, when you decided to live within the borders of the United States you are tacitly agreeing that you will abide by the laws of said country or face the potential for criminal prosecution.

You are welcome to withdraw from said social contract, leave the country, and renounce your citizenship.
But until you do so, you're going to pay what the government thinks that your should and be subject to whatever laws that the government decides.

(You are, of course, welcome to try to change said laws)

[ldrews]

Quote

Moreover, when you decided to live within the borders of the United States you are tacitly agreeing that you will abide by the laws of said country or face the potential for criminal prosecution.

Well, as I said, I was born in the US. I don't think that qualifies as "deciding" to live in the US. But you are right, I have in the past given tacit consent, the same way that I cooperate with a mugger who is waving a gun in my face. Not in the same category as voluntary consent/participation. The same is true regarding abiding by the laws of the country. I am faced with overwhelming force, so I comply to survive. It is sort of like bad weather: I deal with it, tolerate it, but do not necessarily like it or "consent" to it.

That is all much different than a voluntary agreement that you and I might make. Here we both find value in an exchange sans force or coercion, or otherwise we would not make the agreement.

If the "public good" was indeed recognized as beneficial to the parties by the parties, no governmental participation would be necessary. People have formed voluntary associations for eons to carry out such activities. Introduction of governmental participation immediately makes me suspect that some of the parties involved do not agree or do not want to participate, so those that do want to participate use government to force the recalcitrants to participate. Most likely to spread the cost of the activity over a larger base so that the promoters do not have to bear the full cost themselves.

[hrothgar]

ldrews, on 2017-January-14, 07:36, said:

But you are right, I have in the past given tacit consent, the same way that I cooperate with a mugger who is waving a gun in my face. Not in the same category as voluntary consent/participation. The same is true regarding abiding by the laws of the country. I am faced with overwhelming force, so I comply to survive.

And this works fine for me...

[hrothgar]

ldrews, on 2017-January-14, 07:36, said:

If the "public good" was indeed recognized as beneficial to the parties by the parties, no governmental participation would be necessary.

It is clear that you don't understand the basics of what what is being discussed.

Are you familiar with basic concepts like Prisoner's Dilemma or the Tragedy of the Commons?

[PassedOut]

ldrews, on 2017-January-13, 21:35, said:

So, if I am a retiree living in a small cabin outside of town, how does the taxes I pay to support education benefit me?

You collected the benefits in advance.

The retirees and folks without children paid taxes to support the schools that you attended as a child. And those older folks attended schools supported by earlier generations too.

[jogs]

Zelandakh, on 2017-January-13, 09:44, said:

You seriously based your vote for one of the most important decisions you will make for a while on a perception of less than 0.5% of the population? And that is without knowing the background of the relevant poll.

Every poll has leading questions. That's why most polls got Brexit and the Clinton/Trump election wrong.

Thought you were providing a link for this poll on Muslims favoring Sharia Law.

So are you lefties willing to defend Sharia Law?

[jogs]

PassedOut, on 2017-January-14, 07:56, said:

You collected the benefits in advance.

The retirees and folks without children paid taxes to support the schools that you attended as a child. And those older folks attended schools supported by earlier generations too.

Actually in San Francisco seniors are exempt from that tax.