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Source link: http://archive.mises.org/13319/real-jobs-fake-jobs/

Real Jobs, Fake Jobs

July 19, 2010 by

If census jobs are so great, why should they end? Surely, these people could be transitioned to some other government service? People would have jobs, and everyone would be better off. Right? Wrong. FULL ARTICLE by Llewellyn H. Rockwell, Jr.

{ 163 comments }

Ryan July 19, 2010 at 7:20 am

The shipping analogy was great. I’ll have to add that one to my repertoire when talking to friends.

michael July 19, 2010 at 7:41 am

“If these jobs are so great, why should they be eliminated at all? Surely, there is a way that these people could be transitioned to some other kind of government-funded service? That way, one might reason, people would have jobs, work would get done, and everyone would be better off.

“Right? Wrong.”

Posit a dumb premise… then demolish it. Since there’s no one out there recommending that US Census jobs be made permanent, this is kind of a dumb approach to writing an article.

Instead, just pay people for doing work that needs to be done. The census needed to be performed– at least that’s been our position since 1790. And thousands of road building jobs are currently being federally funded. Which are also jobs that need doing. No one is saying those jobs have to be permanent, just that the work needs to be done and is now getting done.

Money paid in toward the completion of such jobs performs exactly the same kind of work it would perform if the road repairs were privately funded. Stop complaining.

J. Murray July 19, 2010 at 7:47 am

You have no clue if we need more roads or not. Without a profit-loss mechanic, you can’t tell if a job is necessary or not. Sure, you can see the road being built, but that doesn’t mean its valuable or important. Government road construction falls under that wealth destruction mechanic. Sure, it may get lucky now and again and repair or construct a road that a private entity would have, but most of the time, government gets it wrong.

And, no, the same money wouldn’t be used for private road repair. The best kept roads in the country are private toll roads (see the Indiana Toll Road for an example) and happen to operate on 1/10th of the cost of a public road. Private roads are repaired in a day or two. A public road repair crew would take months and tie up miles of roadway that aren’t under repair to accomodate the repair area. You can’t tell me that government road repair is a good use of funds.

michael July 19, 2010 at 8:04 am

I drive on the roads. How can you say I don’t know when they need repairs? That’s idiotic.

Also, road projects can be run through the county, the state or the federal government. But in each instance, a proportion of the money being spent is federal. That’s because it’s in the interests of the country as a whole to have the roads in good repair.

Even if you never go out of the house other than to bicycle to the corner store, you need roads. Those are the arteries through which the products of commerce are distributed. So even though we own them collectively, keeping them in good condition is vital to our health. Just the same way keeping our waters and skies in good health is vital to us. Despite the fact that these common areas are not privately owned.

“The best kept roads in the country are private toll roads (see the Indiana Toll Road for an example) and happen to operate on 1/10th of the cost of a public road.”

Citation needed. Road repair costs are fairly fixed. Concrete costs are stable. Wages are comparable. Prove it.

“Private roads are repaired in a day or two.”

Again, prove it. That’s an unsupported assertion.

“A public road repair crew would take months and tie up miles of roadway that aren’t under repair to accomodate the repair area. You can’t tell me that government road repair is a good use of funds.”

Bla bla. The last time the county came through they resurfaced my front road in three days. One to clear off the old surface. Two, to pour the new blacktop. Three, to finish the new surface. Did a good job, too. Even left me enough excess blacktop that I could resurface my driveway at no expense.

Tell you what. You don’t think having government-funded roads is a good idea. Next month is August. For the whole month of August, as a personal protest, why don’t you stay off every government road? That’s every city and county maintained road. Every state highway. And every federal highway. Since the expense is unwarranted, I know you will readily be able to dispense with these useless utilities at no personal inconvenience.

J. Murray July 19, 2010 at 8:20 am

FFS michael, I know that the nuances of the English language are difficult to understand for those who only managed to get through a government school, but it’s not like what I just posted was all that difficult to grasp. Read the post, digest the message, understand how the words are put together, the punctuation use. I didn’t use anything terribly complex (I never use complex English grammar and sentence structure on a blog), but criminey, at least respond to what I just said.

Tell me, where did I call all repairs useless? I know it’s a difficult challenge for the barely educated by public school system and possibly an arts major. Where did I call construction useless? I said you DON’T KNOW and NEVER WILL KNOW if that government road built or repaired was a worthwhile endeavor. Yes, some repairs can be useless. Why spend money repairing a road no one uses? Why build a road no one uses? All work has to serve a final purpose and we don’t know if that final purpose is valuable or not without there being profit or loss. We fund roads no matter what, so we don’t know if that 8 miles of public road connecting two houses in the middle of the country is valuable.

And you totally ignored the point that private toll roads are not only cheaper but better maintained by private enterprise when compared to the public system. How does this jive with my forced use of road systems or your vestigial argument that all governments at every level provide road services? Is vestigial too difficult a word? It means useless, without function, or in this context, has no bearing on the discussion at all.

Try again. Tell me how government road repair and construction is a good thing, especially compared to the private alternative that has done nothing but prove that government road construction and repair is a wasteful destruction of wealth.

mpolzkill July 19, 2010 at 8:41 am

Wow, it just keeps piling up.

Nice post, Murray. An aside: knowing this troll’s proclivities I imagine he’s not a fan of “urban sprawl”. He may not be aware that much of the road building is not in the service of “the people”, but something the reverse. The big developers and most of their suburbs spring from the goverment scam of road building. Obliquely one of Karl’s “Ten Plank”s, a bluring of town and country. Could never understand the why on that one, Michael makes me think it was so as to cause mass confusion and general mental weakness.

michael July 19, 2010 at 8:43 am

What you’re saying is that road users are such morons we can’t tell whether the road we’re driving on is in good repair or falling apart. And I must respectfully disagree.

“Try again. Tell me how government road repair and construction is a good thing, especially compared to the private alternative that has done nothing but prove that government road construction and repair is a wasteful destruction of wealth.”

Construction costs are the same regardless of who’s paying the bill. That’s unless crooks are involved. And crooks can occur either in the public or the private sector. Plus, governments commonly use private contractors for road projects. They even do so for their toll roads, with costs paid up front by bonds and repaid in tolls (increasingly popular nowadays).

So to sum up, government-sponsored road repair both provides an economic good (the facilitation of private and commercial transport) and real benefit (profit to private paving contractors and wages to working individuals).

As for overbuilding, there was much overbuilding in the 1970s on the Interstate system, expensive roads to nowhere that no one used. Or so we thought at the time. Now we use those roads to capacity. And we have them already, paid in full, and at 1970s construction rates no less. So they were actually a good thing.

Now, please provide the proof you say you have. That is, proof that the “private alternative” shows that “government road construction and repair is a wasteful destruction of wealth.” I will examine very closely whatever you choose to provide.

But you go on: “And you totally ignored the point that private toll roads are not only cheaper but better maintained by private enterprise when compared to the public system.”

Again, not one shred of evidence has been provided. Am I supposed to believe something like that, just because you’ve said it?

But no amount of evidence, I know, will deter you. So I can only suggest this: go, buy up a right of way and build a road on it. If the road is better and cheaper than the ones provided to us by the various governments, surely the masses will flock to your road and pay any price to drive on it. That is, they will eagerly pay the amortised cost of its construction and upkeep, PLUS a handsome profit for yourself, plus the cost of installing tollbooths. All at a cheaper cost than that of a comparable road, without the profit or the tollbooths.

mpolzkill July 19, 2010 at 9:03 am

Yep, there it is: [mocking summary of Michael's ignorance] “some government roads went to nowhere, but now looky there at all the stuff at the end of ‘em!”

An interesting [to me anyway] aside on what else can spring up on the end of those roads to nowhere: government opponents. I grew up in one of these government created suburban shitholes and it became my life’s goal to figure out why the immediate world around me was so incredibly rotten. Never fully understood until I discovered Mises.

Artur July 19, 2010 at 9:56 am

So I can only suggest this: go, buy up a right of way and build a road on it. If the road is better and cheaper than the ones provided to us by the various governments, surely the masses will flock to your road and pay any price to drive on it. That is, they will eagerly pay the amortised cost of its construction and upkeep, PLUS a handsome profit for yourself, plus the cost of installing tollbooths. All at a cheaper cost than that of a comparable road, without the profit or the tollbooths.

Besides the profit fallacy, you forgot to add to the list the cost of still maintaining the public road. Or would they be freed of paying taxes?

Shay July 19, 2010 at 10:18 am

It’s never simply a question of whether something needs improvement; it’s a question of how to use the limited resources in the most effective way. There are hundreds of things just around my house that “need to be done”, but that doesn’t mean that any given one is the best use of my time, or even a reasonable use. What’s lacking is a sense of perspective; simply stating that they “need” to be done is ignoring the various levels of need, and benefit from doing them.

J. Murray July 19, 2010 at 1:25 pm

Thing is, I CAN’T buy the road. It’s not permissible (I would have to convince the government to let me operate the road) and a large volume of my own sales would be directly funding the competition. Name a private enterprise that is forced to fund it’s competitor and tell me if that enterprise can possibly survive. The reason we have very few private roads in this nation is that the system was gamed in favor of the government solution. Taxes, restrictions, regulations, and other factors were heaped on the private operators, factors that government roads were made exempt from. It’s difficult to compete with an entity that has the power to just flip a switch and nationalize your product or otherwise force you out of business at whim.

Look up Lysander Spooner as an example of someone who attempted to take on a government service for the express purpose of putting it under.

michael July 19, 2010 at 3:22 pm

Thanks all, for your comments and criticisms.

Artur: You’re of the impression that the profit motive is a fallacy? That private owners of an asset don’t need or won’t accept a profit? But isn’t that why entrepreneurs like owning income-producing assets? Otherwise why would they go to the trouble and expense?

Also, re the cost of ongoing maintenance: are you saying that privately owned roads don’t need maintenance, while publicly owned ones do? Isn’t it the case that all roads fall into disrepair, and that whoever is responsible for maintenance should maintain them?

Maintenance costs would be approximately equal. And with private roads you would add the cost of the profit margin, while with public roads you wouldn’t. Plus, with any toll road, whether public or private there is the not inconsiderable cost of toll collection.

Shay: You’re right, you do have to prioritize costs when making needed repairs. But when the roads fall apart it’s analogous to having your car break down. You can’t go to work without it, so fixing the car takes precedence over most other repairs. Likewise a community or a state can’t operate without functioning roads.

And J Murray: Yes, you can install and operate your own road. No one’s stopping you. Every jurisdiction is subject to just the same restrictions on road design and construction as would private operators be. They hire engineers and obtain permits, etc, just as you would have to. A problem you will run into, however, is obtaining your right-of-way.

Rights of way can be very expensive. That’s the real reason why there are virtually NO private roads. Governments alone have the resources to create new ones, as a rule.

michael July 22, 2010 at 4:03 pm

I’ve gone back to take a closer look at your comments, JM. And I can’t see where a single statement you’ve made is valid. Here’s a sampling:

“Yes, some repairs can be useless.”

Not the case in today’s economic climate. Road repair funds are very limited at the state level (which is where most road projects take place). There’s not enough money even to fix up all the heavily travelled roads that are falling apart. So no, highway departments do not make useless repairs. What most do is practise triage.

“Why spend money repairing a road no one uses?”

No one repairs a road no one uses. Such a road would have no wear, and would not need repair.

“Why build a road no one uses?”

We live in a dynamic society. Both the population and the economy are expanding. And back when the expansion was rapid, unlike today, there were some “roads to nowhere” built to get ahead of the coming demand for them. All such that I’m aware of are today filled with traffic. And they were built back when construction costs were cheaper and money more abundant. So building such roads in anticipation of future need has proven to be a prescient idea.

“All work has to serve a final purpose and we don’t know if that final purpose is valuable or not without there being profit or loss.”

The purpose is use. And the only roads not seeing heavy use today are very old roads in economically shrinking areas of the country. One can pinpoint these areas by looking up a map of the nation listing counties with shrinking population. Try it– such a map is easy to locate.

If you wanted to quantify profit and loss, you could examine only those areas where they were building no roads, or repairing none. See for yourself whether the economies in ALL those areas is not currently shrinking.

Then you could confirm the reverse by finding those areas where street and highway construction budgets were the highest per capita. And for good measure, those areas putting the greatest investment into new water and sewer lines. I think you will find that those are all areas undergoing very rapid economic expansion. Thus there exists a very direct link between utilities construction and economic expansion.

I could go on, but you get the drift. The questions you raise are all amenable to analysis. They are none of them axiomatic truths.

mpolzkill July 19, 2010 at 8:24 am

My god. This is like the 400th subject Michael has jumped into in a near complete ignorance and after about the 387th time having his head handed to him (sometimes it’s just too boring for anyone to respond at all). And here he is yet again, coming up with the most elementary, wrongheaded objections as if we’ve never heard them a thousand times, and still laying them out in the most condescending way. I think he’s approaching legendary status.

Donald Rowe July 19, 2010 at 12:07 pm

What is the square root of two?
cordially,
Don

mpolzkill July 19, 2010 at 12:23 pm

1.4 something? One-for-one? Haha. Thanks for the brain exercise, anyway, Donald. I think your joke might be good but it’s gone over my head I’m afraid. Am I the target of the zinger? It’s like the poker joke, “if you look around the table and can’t tell who the sucker is, it’s you.”

Donald Rowe July 19, 2010 at 2:15 pm

You are no target of mine and there is no zinger. If michael is approaching legendary status, then what about all the rest of the bloggers at Mises.org who fail to understand what his problem is and meet it head on. Are they not aspiring to their own pedestals. What patient goes to his doctor to report that he has acute lymphoblastic leukemia and Graves disease and asks for a script for the cure. michael would not likely persist with his posts here if he were not in serious conflict and searching for resolution. Even if he is a psychotic who gets his jollies tweaking the posters here, the better assumption is that he is on the level. That way you have the opportunity to exercise and extend your skills at explaining just what anarchy is all about. It is a fair assessment that either there is a serious deficiency in the explaining department, or there is a flaw or two in the concept of anarchy as presented. A glance at the numbers will show several orders of magnitude fewer anarchists than non-anarchists. Telling, I think. Listen to your patient. Identify and define the problem, formulate a plan of action, execute that plan, then look at the results. If it worked, you’re done. If not reformulate and try again.

This site is an excellent demonstration of anarchy in action, for michael and others. Anyone can jump in and say ’bout anything. It is well to bear in mind that it is you who are in control of your posts, and they are a reflection of yourself, not someone else or something external.
cordially,
Don

P.S. Not that it is important, all positive numbers have two solutions for their square roots.

michael July 19, 2010 at 3:32 pm

Donald: Here’s my problem. Economics, if it is to be regarded as a repository of established knowledge, has to conduct itself as a science. That is, it can’t just come up with theories that possess internal consistency and appear to explain things. It has to test those theories, to see whether they can be falsified. And all I’m doing is asking for that kind of testing.

So far, no one seems to be giving me instances that support the idea (for example) that there’s something intrinsically the case with publicly funded roads that make them cost more than privately funded ones. And I’m still asking for that proof. What I’m getting instead look to me like specious arguments. And the more I persist in asking for evidence, the specious-er the arguments get.

In fact I am constantly amazed that people with large vocabularies and a decent command of the language can just blithely ignore the fact that belief alone is not enough. That’s why I liken the folks here at Mises so much to the Marxists.

I’m sure the theories make a whole lot of sense. But so did his. And when his were tested in the laboratory of reality, they didn’t do well. He assumed that the economy would run better if the needs of the entrepreneurial and investing class went entirely unmet. And he was wrong.

Now people here are telling me it’ll run just fine if the needs of the working man go unmet, and only the needs of the medium of exchange are considered. And I really don’t have to run the experiment. It does not pass the sniff test.

BTW you’re one of the two reasonable people here I referred to. I’ll be looking for your magnum opus whenever you get it to publishable form. Thanks for identifying the argument and taking it seriously.

mpolzkill July 19, 2010 at 5:20 pm

So, you got what his concern is, right Don? That non-scientists are rejecting brilliant scientists like him.

And you see his imagined miracles of Democracy referenced again and again. Another great mystery that has been mentioned from time to time: how people too stupid to do much of anything seem to only be smart enough to pick the best men to run their lives.

Havvy July 20, 2010 at 11:23 pm

1.414….off the top of my head.

mpolzkill July 19, 2010 at 2:56 pm

Well, you got me there, Donald, I’m not a good teacher (or “doctor”). I sincerely believe it is the job of the Statist to defend their meddling, though (and *without* corralling our children into their day camps at gunpoint). I believe that this clown is no “patient”. I believe that Magnus just did an awesome job (and I did a fair job over a week ago using many of the same points) demolishing his arguments, but that this joker will ignore everything that really hurts his Statist case, flee and come back later to another forum as if he never learned a thing other than new ways to try to get around the facts.

What do you think ails this “patient” anyway? I believe what’s mainly bothering him is that not everyone wants to partake of the rituals of his God, Democracy. He is a preacher merely casting his seeds in the rockiest soil imaginable (and he’s casting them here, I’m sure, because of his world-class out-sized ego)

A glance at the numbers will show several orders of magnitude fewer Thelonious Monk fans than Brittany Spears fans. Telling, indeed. A glance at the numbers will show several orders of magnitude fewer people on mountain tops than on coasts and in river valleys.

If it were 1831 would you council Nat Turner that he hadn’t done a good enough job selling his ideas?

No utilitarian case will ever be strong enough for masses who don’t care to stand on their own without the beneficence of a thieving sugar daddy for life. And finally, [whew], all comments directed at this buffoon are for personal entertainment and for the possible benefit of some hypothetical kid reading this who hasn’t yet been fully corrupted.

michael July 20, 2010 at 8:28 am

mpolz: I haven’t offered any comment in response to your last handful of diatribes, as they seemed unnecessarily combative and tending to lead away from the light. But I don’t like leaving you out of the conversation. So here’s an olive branch, and a great money-making idea.

Read this article, which gives an excellent list of the pros and cons of private road construction in the US:

http://en.wikipedia.org/wiki/Free_market_roads

Then go out and drum up some money. Build a road. Show us how it’s done.

We do have a handful of private roads in this country, showing there is no serious bureaucratic impediment to opening one up for business. But we don’t have very many of them– showing us that it’s probably a poor way to make money. So my suggestion is, rather than just hanging around here and rattling your bars, why not find a place that needs a road… and provide it?

Boy will I look dumb when you get rich.

mpolzkill July 20, 2010 at 9:08 am

Amateur propaganda artist, this line of yours was already demolished here. You think you can just ignore that? Your techniques don’t work here. Give it up, you look like a fool.

You don’t have to be combative, you fascists believe you’re safely on top. You’re not quite as sure as you used to be though, are you. That’s why you’re here. Too bad you got your royal ass kicked.

And thank you, so much, condescending prat, not interested in getting rich. I’m not an engineer, or a financier, or the head of a very large construction company, but I do work in construction and have a lot of time off thanks to your comrades. In my spare time (which I do enjoy) I try to think of any way I can to get you all off of our backs. If enough of your inferiors wake up and grow up, then, who knows what will happen? I’m not an economist, and frankly I don’t care what happens, as long as your agents aren’t stealing my money to murder foreign women and children anymore.

michael July 20, 2010 at 9:20 am

Something further, mpolz. In this passage you achieve something approching wit and insight:

“I believe what’s mainly bothering him is that not everyone wants to partake of the rituals of his God, Democracy. He is a preacher merely casting his seeds in the rockiest soil imaginable (and he’s casting them here, I’m sure, because of his world-class out-sized ego)..”

In matters egotistic, I am rather well endowed. But more to the point, I have a method here that goes beyond mere proselytizing. It’s not that I want to convert YOU to MY philosophy. I merely want to show you the shortcomings of your own. What I have to peddle here is not just another philosophy, but a useful method for determining whether pure rational constructions have any applicability to the real world. (See below, in my comment to Bala, for a fuller explanation.)

Nor is democracy my god. I find it to be a useful check against antidemocratic attempts at a takeover. And as lackluster as I find our government as it currently functions, I doubt there will be significant improvement if it passes from the hands of the voters into those of a small sliver of radical malcontents. I do, however, richly insist that your voices be heard.

As for the wisdom of the general public, not to mention that of those who get off their duffs to vote, you put it very well here:

“A glance at the numbers will show several orders of magnitude fewer Thelonious Monk fans than Brittany Spears fans. Telling, indeed.”

Especially since T Monk’s music, if you try to judge such a thing objectively, is so much better in originality, subtlety of expression, density and structure. The plain fact is that a majority of mortals, with whom we must share the planet, prefer simplicity and recognizability in their music. They want something they already know and can whistle to.

Some years ago I caught John Hicks, down at Twins Lounge in DC. He was at the time one of the two best piano players on the planet, IMO. (The other was Kirk Lightsey.)

At the time, the rage across the planet was a girl group called Spice Girls. To me, their product was forgettable… but they did have a talent for accumulating large sums of money and notoriety. Anyway, guess how many people Hicks astounded with his music that night?

Eight tables.

A master. You should listen to him, if anything’s available on QuickTime or another of the available players. Or just buy a CD to have the experience. So while I do believe that a government only governs well when it governs through the consent of the governed, I also believe that most of them aren’t all that bright in some areas. Some crucial areas, in fact, as well as the less crucial area of being able to comprehend real music.

mpolzkill July 20, 2010 at 9:56 am

That’s right, to clarify, you are a preacher of the Jim Baker mold. And his chances would be as good hawking his wares here. Since the demise of the scam of the “Divine Right of Kings”, Democracy has taken over as the Ancien Regime’s vehicle of choice to control (befuddle, cheaply sate and pacify) the masses. The masses do not need to be as low as they are though. For starters they could stop screaming for blood the few times your foreign victims make a successful return strike and they could stop begging for and receiving stolen goods through your government.

You remind me of Kolya, in “The Brothers Karamazov”. I can’t remember exactly how it goes, but the precocious child is passing a very old peasant and mockingly says to him, “what do you know, old man?”. The peasant gives him a start when he replies, “more than you.”

Many Nazis were very cultivated, it’s why Stanley Kubrick made the password “Fidelio” in his “Eyes Wide Shut”. Yes, Hicks is from the old great school. Never heard of Kirk Lightsey, listening to one of his Monk interpretations now, thanks. Andrew Hill just died, but before that he was on my list of two with Cecil Taylor. I was at the Lincoln Center when the establishment finally gave Taylor his due. It was one of the greatest experiences I’ve ever had; other than the torrent of cretins leaving throughout his performance and shining the hallway light in my eyes.

michael July 22, 2010 at 4:05 pm

I think your comparison is unfair. I have better hair than Jim Baker.

And you seem to have a distinct ‘master race’ air about you. By any chance would you be one of those “cultivated nazis”?

mpolzkill July 22, 2010 at 4:49 pm

Blonde hair?

Hey TT, take a look at this post by this budding freedom lover here who’s just looking for a little tlc and direction:

http://blog.mises.org/13211/catallactic-unemployment/#comment-700905

Take that in with my assurances about the hundreds of his posts supporting almost every Federal social program that is mentioned on this site. Now, who would have fit in better in a place like this, some one like me or someone like this prodigious troll:

http://newzeal.blogspot.com/2010/01/werthmann-on-how-totalinarianism-came.html

Magnus July 19, 2010 at 8:31 am

I drive on the roads. How can you say I don’t know when they need repairs? That’s idiotic.

You do realize that this website is devoted to ECONOMICS, right? Nothing you have EVER posted here even discusses economics at all. It’s as though you live in a permanent bubble of fallacy, ignorance and a stubborn insistence that your trivial personal experience somehow matters to anyone.

What J Murray was aptly saying is that neither you nor anyone else has ANY IDEA whether spending money on roads (and thus preferring that expenditure over every other possible expenditure) is optimal, beneficial, economically justified. Or when, where or how much. These are economic decisions that must be made, because a dollar can only be spent once.

Nor do you know if the road is being built or maintained with the proper materials and techniques, as opposed to deciding if some other approach is more profitable or less wasteful in the long or short run.

Nor do you know if the location and general design are actually wanted, optimal, preferred, economically beneficial, etc.

You have no way of knowing these things because the people who USE the roads are NOT customers. They do not pay to use them. They pay because the government puts a gun to everyone’s head, and then you use the roads without a specific charge.

As a result, there is NO CONNECTION between the source of REVENUE for the road-building and the actual USE of this economic good. There is no causal relationship between profitability and expenditure. There is no INFORMATION on which to base any of these decisions. No one has any way of knowing if making any of about a million possible changes would produce a more profitable or more wasteful road.

If you, michael, had EVER shown any indication that you have even read the basic, foundational treatises to which this website is dedicated, you would know that what we are describing is called the Calculation Problem. Mises thought it up. We talk about it all the time.

You, however, spew fallacy after fallacy, demonstrating your ignorance and refusal to do even the minimal amount of basic reading necessary to even participate in these discussions. You’re not merely wrong. You are not qualified to even throw your hat in the ring.

You are a troll. You have no demonstrable interest in these topics. Your apparent reason for coming here is that the stone-cold reality of Austrian Economics has intruded on your safe, insulated, comfortable little world of error and superstition and hard-defended bias, and it irritates you enough that you feel the need to argue with it.

mpolzkill July 19, 2010 at 8:46 am

Ouch. Oh yeah, Magnus reminds me, Karl’s Plank was probably to make more people dependent on and beholden to the central authority.

michael July 19, 2010 at 9:06 am

The subject I’m discussing is the ignorance of academic economists who know nothing about anything outside the classroom.

I’ve spent an entire career studying the bottom line, and how to achieve a good balance of interests to the mutual benefit of self, the customer and my employees. Not one of you has apparently ever had that kind of experience. All you do is to give mechanically rote answers learned from some book, ones that only make sense when you don’t examine all the assumptions. And when I point out to you the shortcomings of such an approach, instead of looking into the questions I pose you just yell and holler.

All my efforts may be to no avail, I’m thinking. So far you’re still impervious to evidence from beyond your textbooks, and believe that as long as the theory sounds elegant, it need not correspond to any practical reality. So dwell, if you like, on your “calculation problem”. I’m sure it’ll tell you all you need to know about highway construction costs, the total savings to aggregated individuals who all depend on reliable and affordable roads, and the preferability of privately owned toll roads– which no one in the country other than those posting here appears to prefer.

You’re right to examine those things I tell you for possible error, superstition and bias. That’s how scientific inquiry proceeds, through critical examination. For god’s sake, why then don’t you try doing the same with your gurus: Mises, Rothbard, etc? They actually appear to know very little about how the real world actually works. For example

“You have no way of knowing these things because the people who USE the roads are NOT customers. They do not pay to use them.”

Sure we do. Every American knows where the proceeds of federal and state gasoline taxes go. And we also know that other tax moneys are used to build and maintain our roads. And whenever not enough money has been spent on maintenance, road users are the very first to shout that we need to be spending more money on the road grid. It’s ours. We’ve paid for it. We need to have it on good repair. We’re the customer.

On to another more specific point: “What J Murray was aptly saying is that neither you nor anyone else has ANY IDEA whether spending money on roads (and thus preferring that expenditure over every other possible expenditure) is optimal, beneficial, economically justified.”

Thousands of studies in this area have just confirmed the obvious. The costs of maintaining a grid of state-provided streets and highways, fleets of millions of privately owned cars and trucks, and the billions of gallons of gasoline required to make our transportation grid run are truly horrendous. Yet no one has come up with a more efficient and less costly system for getting ourselves and our goods from here to there, from farm or factory to market.

So until you come up with a better idea you do need to face the fact that the grid we have is a required one. Otherwise we’d be hauling carts full of grain along muddy tracks to market, and having problems like providing fodder for our mules. Or, paying horrendous amounts in tolls.

The publicly funded grid is the one that works best for the public’s use and convenience. Otherwise every time I turned a corner, I’d have to pay yet another tollbooth operator yet another toll. Such a system would be even less efficient than having a Soviet commend-driven road grid. Even a moment’s thought, unless one is an Austrian, would suffice to demonstrate that.

But I’ll listen to your arguments. Please try to offer ones that are not just theoretically based.

mpolzkill July 19, 2010 at 9:19 am

[paraphrase of Michael] “We (corporatists) run the world, now show me an example of a different world.”

I would never doubt your possible expertise in being an engineer of a society like this.

You grew up in an area that originally sprang up in a different way then the one I’m from. Why don’t *you* take a closer and longer look at a place like say Bellflower, California. (That would probably save us ever having to hear your imbecilities again, come to think of it, haha)

I know, I know, you lefties have some new ideas about how to help those poor savages, and these ones are sure to work.

Artur July 19, 2010 at 10:00 am

The fact that you pay for it does not make you a customer if you don’t pay for it voluntarily and can decide not to bough that product.

Eric July 19, 2010 at 10:55 am

Micheal: In case I missed it,

Just curious, in what profession have you spent a career which makes you an expert in economics?

On the topic of roads. Sometimes it’s difficult to see how well roads could be maintained when all you have is one road builder in an area. The only way to see what competition might do is to compare roads in different states or countries.

But even in the US, when you travel from state to state you can see there is clearly some that are shabby and others that are better (or worse than shabby).

I’ve driven in Europe, and the difference between Germany and France was amazing. Just crossing into France you suddenly felt the road change. It felt like I was back in the good ol US. It felt like I was driving on sandpaper. Now it’s true, German roads are public, but my point is that there are great differences in quality. The best roads I’ve driven on in the US were toll roads (e.g. the PA turnpike and the Atlantic City Expressway).

With today’s technology (or technology that would be rapidly developed if we truly had private roads) it’s rather easy to collect tolls.

Nobody said that you’d have to pay for tolls on a per mile basis. You could do it with monthly passes. Or electronic readers, etc. The big point is that there’s no incentive for anyone to come up with a better idea than I just did (and I know much less about this than some expert would – and I just came up with a few ideas).

In Amsterdam, they have great public transportation. You don’t have to pay every time you get on a tram, you don’t even SHOW your pass (they are weekly, or any number of days you want) every time you get on. They simply have people who do random checks and if you get caught without a pass you are charged something like 10x the going rate. This reduces the amount of work needed to see that people buy passes. Something like this could be used with private roads in the US.

If you want to really understand how it would be done, check out either Rothbard or Walter Block here on this site.

michael July 19, 2010 at 3:56 pm

“Just curious, in what profession have you spent a career which makes you an expert in economics?”

Eric: Doesn’t my every point go to the fact that ideologically driven economic students don’t necessarily know very much about road construction and maintenance? My career has been spent in property management, construction, repairs and maintenance. Anything associated with building things, maintaining them or repairing them is something I’m experienced in. As is just about anything having to do with real estate sales, values or investment issues. Equally significant is that I’ve had long experience in meeting a bottom line… which doesn’t seem to play any part in the thinking around here. Everyone I’m talking to seems to be some airy academic with no understanding of actual operational realities. I don’t think there’s a one, other than me, who’s ever had to meet a payroll. At least that’s what their comments tell me. Everyone’s a theoretical academic.

Plus, no one knows how to refute me. I may very well be wrong in some things. And if so, I’d be happy to bow to superior knowledge. Instead, all I get is shallowly expressed dogma and insults. I really don’t get the impression that more than one or two people here even know the first thing about economics. Their comments tend to be half-baked, and certainly not scientifically rigorous.

I have raised several points that must be addressed if the debate is to progress. The first is, if there’s evidence that publicly funded construction projects are intrinsically more expensive and more poorly designed than privately funded ones, let’s see it.

The fact that we don’t have any private roads to speak of in the United States just tells me that in this area the private sector can’t compete. And despite what you may think, I’ve found that in most areas the private sector can do a better job. Just not in this one.

Magnus, above, has these comments to make:

“What J Murray was aptly saying is that neither you nor anyone else has ANY IDEA whether spending money on roads (and thus preferring that expenditure over every other possible expenditure) is optimal, beneficial, economically justified. Or when, where or how much. These are economic decisions that must be made, because a dollar can only be spent once.”

I’ve made such decisions over a span of many years. And I can say that public money can either be well spent or poorly spent, depending on the quality of the project management. Generally speaking, though, whenever roads are badly designed, overbuilt or built with suboptimal materials, there’s graft involved. You can certainly have graft in the system.

When are repairs economically justified? Anyone with tires and a suspension can tell you that.

“Nor do you know if the road is being built or maintained with the proper materials and techniques, as opposed to deciding if some other approach is more profitable or less wasteful in the long or short run.”

That’s why people pay guys like me, to answer those questions.

Bala July 20, 2010 at 12:15 am

” Instead, all I get is shallowly expressed dogma ”

Conclusions obtained through a systematic process of reasoning that starts from a base of axiomatic concepts do not constitute dogma.

” and insults ”

Your refusal to understand the point I have made above makes you deserving of all the insults that people throw at you.

The real problem is your insistence that Austrian Economic Theory is dogma. Learn why you are wrong and then you will have few problems. As I said on another thread, read Human Action. Even you can get enlightened.

Bala July 20, 2010 at 12:20 am

” When are repairs economically justified? Anyone with tires and a suspension can tell you that. ”

More stupidity (as usual). The person who has to judge the economic feasibility of repairing the road is the owner of the road and not the owner of the vehicle that plies on it. All that the owner of the vehicle can judge is how comfortable the ride is. If he is a person like you (with the experience of doing such repair work), he may also be able to judge if repairs are necessary. His judgement will be purely technical. Economic feasibility, however, is a different matter altogether.

michael July 20, 2010 at 8:52 am

Thanks, Bala, for providing a good summation of the crux of the matter. I know you’re reading me correctly when you say something like this:

“Conclusions obtained through a systematic process of reasoning that starts from a base of axiomatic concepts do not constitute dogma.”

But when you base your unitary philosophy solely on axiomatic concepts, what you get is precisely that: dogma. That is, there exist axiomatic concepts in this world that run directly counter to those you’ve decided to embrace. Therefore the conclusions those concepts lead to have equal validity to those you prefer. It’s a logjam in which one person’s opinions are just as good as another’s.

The way to break such logjams is to verify the validity of those concepts through rigorous testing. This approach was first pioneered a very long time ago, by Democritus. When he encountered a belief that others considered to be a ‘given’, he attempted to falsify it– to prove it wrong. And he began his project with the examination of the axiomatic concepts embraced by one of the most widely regarded gurus of his day, Empedocles.

http://www.visionlearning.com/library/module_viewer.php?mid=49

And if he was successful, it was proven wrong. While if it was unsuccesful, the verdict had to be “not yet disproven”. Which, in fact, is the status of all currently accepted scientific theories. The theory of gravity, for example, has not yet been disproven. Although we have people currently working on that problem.

Since Democritus made his very convincing arguments, the forward wing of humanity has preferred the path of scientific inquiry to that of the implicit acceptance of premises that proceed solely from logical foundations. Logical foundations are excellent at doing what they do: providing coherent hypotheses about the world. But they are not adequate to proceed to the next step: empirical verification through observation and experiment.

This is one advantage one has when he is educated not merely in a state-supported public university, but a liberal arts college no less! I suggest you might have benefitted from the advantages afforded by such an education.

BTW Democritus, as you will have noted, still was unable to fully demonstrate the falsity of Empedocles’ view, or the correctness of his own, because the apparatus required to study atomic structure had yet to be invented. That took another 23 centuries. But he was the first who pointed in the right direction; that is beyond the realm of pure reason into the experiential realm.

I hope you will be able to make some productive use of this quick sketch. I’d hate to be known around here as being merely a wrecker.

mpolzkill July 20, 2010 at 9:18 am

The way your agents break such logjams is with guns. The way they do it is the way Dick Cheney did it in Iraq, you loathsome person. (and please stop whining, you have forfeited any claims to being treated with civility due to the company you keep)

michael July 20, 2010 at 9:33 am

I was just telling Dick the other day, up at the retreat, that when he comes back to power he ought to start some more wars. Yemen would be a good one. A war we wouldn’t be able to fight our way out of for another twenty years!

Ka-ching! the wheels on that cash register would really start to overheat.

mpolzkill July 20, 2010 at 10:04 am

Because that is about 90% true that makes it somehow funny? Or I guess it’s the 10% false.

Under your system that you hawk, every four years the military industrial complex gives the masses a choice between two executive officers. You actively support this system, the system is yours. The system is rotten to the core and while I like to joke around, there just isn’t anything funny about it.

Bala July 20, 2010 at 11:02 am

Hey numbskull…. oops!!! I mean, hey michael,

” But when you base your unitary philosophy solely on axiomatic concepts, what you get is precisely that: dogma. ”

Your bucket of crap is overflowing. You need a whole tank to contain it.

Axiomatic concepts are self evident aspects of reality. They are the base of all our knowledge. To say that knowledge based only on axiomatic concepts is dogmatic reveals your insanity.

Incidentally, what else can be the base of knowledge, if not axiomatic concepts?

” That is, there exist axiomatic concepts in this world that run directly counter to those you’ve decided to embrace. ”

Oh!! That’s very interesting. My axiomatic concepts are existence, identity and consciousness. In economics, it is human action. “Man acts” is the base of my body of knowledge. All action is purposeful striving towards ends and involves the application of means towards ends. Acting means to prefer. To prefer is to choose one end over another and consequently one set of means over another.

Now, please point out the “axiomatic” concepts that you think are “contradictory” to these. I am waiting to show how they are non-axiomatic. So, please show them.

michael July 20, 2010 at 1:13 pm

man acts in his own self-interest. Man also acts selflessly on occasion. Man acts purposefully. Man has also been known to deliberately act randomly, or ‘absurdly’. Man questions his existence. Man also often acts with total certitude that he knows The Answer.

I could offer a hundred more. But these should appeal to you, judging from your quasi-existential world view. There’s just nothing you can say that’s universally true.

It follows that everything you say has to be filtered by reality. It has to pass testing. And this is true nowhere more than in the field of economic thought. That’s why I constantly proceed from the specific. I know of no universals.

mpolzkill July 20, 2010 at 1:17 pm

“I know of no universals.”

Then stop voting for and shilling for those who believe them to the point they kill those who disagree.

Bala July 20, 2010 at 8:17 pm

michael,

You are really quick to show the extent of your vacuousness. You have no understanding of what the term “axiomatic concepts”.

” man acts in his own self-interest. Man also acts selflessly on occasion. ”

Neither of these is axiomatic. Neither of these is one of my axioms. So, I don’t know who you are shooting at.

” Man acts purposefully. Man has also been known to deliberately act randomly, or ‘absurdly’. ”

The first comes close, but the correct statement is “Man acts”. The very definition of action is that it is “purposeful”. You seem incapable of seeing the obvious difference between “action” and “involuntary movements”.

The second is absolutely hilarious. Acting “randomly” or “absurdly” does not mean without purpose. It just means that you find it random or absurd. See how quick you are to make your whims into “axioms”? Your insanity is near completely proven.

Axioms are self-evident aspects of reality. The second one is NOT self-evident. It is the meaning you have attached to the observation that man acts (axiomatic in nature).

” Man questions his existence. Man also often acts with total certitude that he knows The Answer. ”

Neither of these is axiomatic. Neither is self-evident.

So far, you have completely failed to show “contradictory axioms”. There are 2 reasons for that. Firstly, reality abhors contradictions. Secondly, your problem is that you are mistaking non-axiomatic propositions for axiomatic concepts. The second is also the reason for your entire body of “knowledge” being complete nonsense and your talking like an insane man.

michael July 21, 2010 at 11:10 am

Here’s the heart of your problem, bala:

Your axiom: “..the correct statement is “Man acts”. The very definition of action is that it is “purposeful”.”

Clearly that’s not so. It’s just the assumption your mind makes when you think about it. But in fact action is inherent in every living organism. They act because they can do no other. That’s just the way they’re built. The mitochondria provide energy and the tissues convert it into mechanical energy. THAT’s why we all act.

It’s possible to overthink such concepts drastically. I took one philosophy class, and found it to be just idle, vacuous speculation. Biology is much more to the point.

If you have a genuine economic theorem you would like to assert, put it through the wringer of real-world experience. If no one can disprove it, it has to be accepted as not yet disproven.

Bala July 23, 2010 at 4:18 am

” Here’s the heart of your problem, bala:

Your axiom: “..the correct statement is “Man acts”. The very definition of action is that it is “purposeful”.”

Clearly that’s not so. ”

I said ” the very definition of action is that it is “purposeful” “. How does this

” It’s just the assumption your mind makes when you think about it. ”

refute that? I mean how does this statement refute my point that all action, especially human action is “purposeful”? Are you saying that there is human action that is not driven by purpose? Please identify some such action.

” But in fact action is inherent in every living organism. They act because they can do no other. That’s just the way they’re built. ”

How does this refute the point that “purpose” is built into human action?

” The mitochondria provide energy and the tissues convert it into mechanical energy. THAT’s why we all act. ”

This is the thermodynamics of what makes it possible for us to act. It explains how a living being generates the energy required for action. It does not give the “purpose” of action. “Purpose” is always something that is sought to be achieved and has to chronologically follow the action, not precede it.

” If you have a genuine economic theorem you would like to assert, put it through the wringer of real-world experience. ”

I have a serious problem with your insistence on the “wringer of real-world experience”. You seem to be deliberately ignoring what I said. I am forced to conclude that you are worse than a troll.

I said your empiricism is hare-brained and explained why it is so. What do you mean by coming back with it without refuting what I had said?

Once again, not one part of Austrian Economic Principles can you disprove with data from your precious “real-life experience” because every such bit of data is from an interventionist economy and not from a free market.

Please tell me how you test out a theory that explains the working of a free market in an interventionist economy. Does the fact that data from the real world does not match some predictions of a theory that explains the mechanics of a free market discredit the theory even though the data was not from a free-market? Are you really this dumb?

michael July 23, 2010 at 2:12 pm

So then, bala, all your theories are unsupported by any body of data? Because they’ve never been tested?

O-kay. I don’t have any theories to expound. I only present conclusions based on demonstrable data. If you think that’s somehow not as good, something vital has gone missing from your own education.

Bala July 23, 2010 at 9:42 pm

” So then, bala, all your theories are unsupported by any body of data? Because they’ve never been tested? ”

No. There is a lot of data that supports the conclusions of Austrian theory. Refer Russ’s posts on the other thread. All I am saying here is that your attempts to “refute” the theory by taking up data is utter nonsense.

” O-kay. I don’t have any theories to expound. ”

That was obvious from moment 1. You do not have a structure to your thoughts. Random recognitions, random recollections, random correlations, correlations mixed up with causation, mind-boggling arrogance to boot. That sort of sums up your approach.

” I only present conclusions based on demonstrable data. ”

Data do not lead to any conclusions. Only a theory can and does.

” If you think that’s somehow not as good, something vital has gone missing from your own education. ”

Yeah!!! I have not been had and laid waste to. I somehow escaped all the indoctrination. Magical, isn’t it?

Daniel July 19, 2010 at 9:21 am

I stopped replying to him explaining how things work, since he’d either ignore it, not understand it (whether purposefully or not I do not know or care) or just outright “straw-man” it.

Now I just link him to whatever relevant sources there are (books, articles, etc). No muss, no fuss. I don’t waste much time [repeating myself] and if he really wants to understand reality it’s really up to him.

mpolzkill July 19, 2010 at 9:30 am

Definitely, Daniel, but this *is* the closest you will ever get to kicking our royalty in the butt. You can look at it that way and it can be fun from time to time.

michael July 19, 2010 at 9:52 am

Daniel, I don’t recall that you’ve convinced me you do know how anything works. Your approach, as I recall, is as academic as any of the others here. Correct me, please, if I’m wrong.

My plumber, who probably knows more about how to run a company than any of the posters here ever will, has a saying: “Distrust a society that values its philosophers over its plumbers. For then neither their pipes nor their theories will hold water.”

I have every expectation that your theories are internally logical and consistent. Other wise you wouldn’t believe in them. But can they be used as a guide to improving the transportation grid? Not without more than you’re showing me here.

Everyone here advises that if I were just to read Mises, it would all become clear. And I’m sure that’s so. When you read nothing BUT Mises, all questions have simple answers. And you come to believe he’s some sort of genius.

It was the same way with Marx. Those who once read nothing but Marx came away convinced that he was a genius. Remember how that worked out? That’s why I’m less than eager to hand over this country to your ideologically driven care.

My advice: read everything and listen seriously to everyone. Then put together your own best synthesis, based on the life experiences of yourself and others around you. That’s much of what I’m doing here, gaining the supposed wisdom others have gleaned from their experience of life.

And I don’t always show it. One of my flaws is that I give what I get. When I’m offered rudeness I regrettably return more rudeness… even though it’s likely counterproductive (that’s what makes it a fault and not a virtue). But I do listen to all your comments. And with the two interlocutors I’ve found here who are both polite and informative I return courtesy and diligence to the points they raise.

Would that we could conduct the entire dialog that way! Just suffice it to say in closing that those things you read in books don’t always work out well on the ground. A year in private industry’s worth four in the classroom.

mpolzkill July 19, 2010 at 10:24 am

* “in a different way *than* the one I’m from.”

Troll, no one could say anything as rude as your constant refrain that we are too stupid to run our own lives. Nothing could be more arrogant than your constant refrain that in fact *you* and your fellow Yankees are the ones qualified to do it.

Inquisitor July 19, 2010 at 12:35 pm

“Your approach, as I recall, is as academic as any of the others here. Correct me, please, if I’m wrong.”

Seems the troll is angry that his anecdotal evidence is simply dismissed as such.

frank July 21, 2010 at 3:31 am

” A year in private industry’s worth four in the classroom.”

And four years with your head up your ass is worth one al fresco. You keep saying this – I’ll bet almost no’one posting here is an academic. Do you think you’re the only person in the world to have run a company?

This is just a ploy to prevent you having to make good arguments – you are simply an embarrassment. If I weren’t being dragged into hell by a country full of deluded idiots like you, it’d be funny. It’s not though.

michael July 21, 2010 at 11:15 am

frank: The issue is, everyone here just comes up with assertions that are unsupported by any evidence. And when I ask them for some backup, they can’t provide anything other than academic dogma. I’m only recommending that they find actual support for their assertions, not just logical postulates, if they want to enjoy any credibility out there in the world of non-Austrians.

Give it a try. You be the first.

Donald Rowe July 19, 2010 at 11:43 am

Hello michael,
“Even left me enough excess blacktop that I could resurface my driveway at no expense [to me].”
Just a suggestion for a minor edit. No need to reply.
Cordially,
Don

michael July 19, 2010 at 4:03 pm

Good point, Don. But I think I actually saved the guy money.

If all you need is 10-1/2 yards of asphalt for a job, you buy twelve. That’s so if you run short you don’t have to stop work and pick up more, which costs money in needless down time.

Let’s say at the end of the day, though, all you used was 10-1/2 yards. That means you have a yard and a half left over, and have to pay a dump fee to go dump it. Plus it takes you an hour extra to go to the dump.

Enter Michael. “Hey buddy. I’ll take that stuff off your hands for free.” He got a good deal and I got a good deal.

Donald Rowe July 19, 2010 at 5:33 pm

I didn’t want to take up the bandwidth, but we are on the same page with that. Also, a concrete delivery can make that point firm up.

But that is really irrelevant the substance of the discussion.
Cordially,
Don

Inquisitor July 19, 2010 at 11:43 am

“Bla bla. ”

Sums up Michael’s posts mostly.

Old Mexican July 19, 2010 at 9:23 am

Re: Michael,

Posit a dumb premise… then demolish it. Since there’s no one out there recommending that US Census jobs be made permanent, this is kind of a dumb approach to writing an article.

That’s not what the article is about. It’s about the State touting “job creation” when the jobs created are non-productive.

Instead, just pay people for doing work that needs to be done.

I have no beef with that – as long as YOU pay for the work YOU need to have done, and leave my wallet alone.

The census needed [sic] to be performed– at least that’s been our position since 1790.

No, things do not have needs. Only people have needs, and so far, I don’t believe people have the act of counting every citizen alive high up there in their “things I need” list.

And thousands of road building jobs are currently being federally funded. Which are also jobs that need doing.

Why would that be? How would you know that people need more roads? The State touts road building because of the razzle-dazzle effect they have, not because people really need thousands of miles of ribbons of tarmac to run their cars between the East and the West. Airplanes and trains are far more efficient for moving people either very fast or very conveniently.

You simply accept this “need” as truth. This is called Begging the Question. You *think* they are needed because people use them NOW, the same way coral polyps use sunken ships to latch on: Because they are there, not because the coral needed sunken ships.

michael July 19, 2010 at 4:08 pm

Census data have a great many good, practical uses. Developers, for example, need the demographic data to forecast needed housing starts.

For 200 years we’ve seen the sense in having a nonprofit entity (i.e. the government) provide such data to meet the needs of commerce.

2. “How would you know that people need more roads?”

Duh. Ever been in a traffic jam? A chronic one, one that occurs five nights a week? It’s not rocket science. In fact it’s a common topic of conversation. There’s hardly anyone who doesn’t know it when existing road capacity runs short.

Old Mexican July 19, 2010 at 4:33 pm

Re: Michael,

Census data have a great many good, practical uses. Developers, for example, need the demographic data to forecast needed housing starts.

Well, good for the developers! Why is it MY business to subsidize market intelligence for them?

For 200 years we’ve seen the sense in having a nonprofit entity (i.e. the government) provide such data to meet the needs of commerce.

What’s with this “We” business, Kimosabe? Why would it be the business of government to feed commerce free information? Saying that government is a non-profit entity is putting a spin on things: Government just takes, it does not exchange.

Duh. Ever been in a traffic jam?

Duh. Ever heard of “Tragedy of the Commons”?

michael July 20, 2010 at 9:50 am

“How would you know that people need more roads? The State touts road building because of the razzle-dazzle effect they have, not because people really need thousands of miles of ribbons of tarmac to run their cars between the East and the West. Airplanes and trains are far more efficient for moving people either very fast or very conveniently.”

Times change, Mex. That was certainly the case back when our road grid was being built, in the fifties and sixties. The country was flush with profits, and our economy was rapidly expanding. But now nearly all the states are under water, dependent on a nearly destitute Union to make their budgets whole. Road building projects have been put off indefinitely for inadequate funding.

And it doesn’t take very long before one starts to see holes in the tarmac. The state I call home has been called, for good reason, the “good roads” state for many years. Yet now, if you travel at dark and in the rain, you can encounter almost anything. Lack of funds is behind it.

Without such funds, businesses based on maintenance and repair go into mothballs. Which isn’t as hard for them as it is for their employees. Asking them to put their families up in mothballs is really asking too much. The choice becomes whether to fund them for a while as wards of the state, or just watch them starve or rob banks, according to their natures.

You would be correct to say that railroads, etc, once provided valuable alternatives to travel via personal gas-powered vehicles. But the decision was taken back in Eisenhower’s time to go with cars and highways, allowing the rails to rust. And we can’t get back there from here; it would be prohibitive to try to restart the rails as mass transit. Europe is doing better than we are in this regard, with their bicycles and mopeds, and functioning bus and light rail lines.

At any rate, change will one day be imposed on us. Because the true driver of price inflation will turn out to be the cost of gasoline, not any expansion in the money supply (little or none of which ever hits the street). And when gas goes above five or six we’ll begin thinking about alternatives in earnest. Agreed?

mpolzkill July 20, 2010 at 10:22 am

I already suggested that we really can sympathize with the difficulties and the thanklessness that goes along with being the proud parents of 300,000,000 brats, yutz. You ever consider actually following what anyone is saying here? No, that wouldn’t work for you.

J. Murray July 19, 2010 at 7:42 am

12 statisticians can perform the same job as 700,000 census workers, get it done faster, and be more accurate.

Private businesses have their own census, it’s called the phone book. And it’s updated annually instead of once every 10 years. If a business relied on a 10 year rolling census for planning, our economy would be in much worse shape than it already is.

michael July 19, 2010 at 8:14 am

Twelve people could do the work of 550,000 census workers (at the height of employment) and get it done faster? That is, they could knock on every door in the country and ask a few questions? There are only about a hundred million front doors. If they each conducted one thousand interviews a day, that would take them 8,333 days to just complete the preliminary info gathering. Or 23 years. Yet you say they could do it in something less than the four months it actually took.

Where are these wonder workers? I’d like to hire them.

As for the phone book, some people have three or four numbers. Others aren’t listed at all– they either have unlisted land lines or just cell phones, which aren’t in the book. Plus, some households have one person. Others have twelve. That’s no way to count the number of people living in this country.

J. Murray July 19, 2010 at 8:34 am

Again, failure of public education showing through.

We don’t need to go door to door. We don’t need interviews. We don’t need to bother people at home. There are thousands of ways to judge population in the nation by using a whole of 12 people. This is how private enterprise does it all the time. When Coca-Cola decides to buy advertising space on a television channel, how does it know what the viewership will be? Did Coke send people, as you say, door to door over hundreds of millions of people, interview thousands of people? No, they used statistical sampling techniques.

Data on population is being collected all the time from numerous sources. We can count already calculated carbon production. We can count electrical usage. School enrollment. Tax receipts. Wal-Mart’s business revenues.

The Census also assumes we need an exact, to the man, count of everyone living in the area. This is a fool’s errand given that they only “count” at a very specific point in time. One of the rules of the Census taker is to go around to neighbors asking how many people lived in a vacant house prior to a set period of time. They are then counted as “residents” in that neighborhood. The data is already wrong the moment it’s collected.

A census is only necessary for getting a good idea of how many people are currently living in the nation, not getting a perfect measure of something that wildly fluctuates daily. It’s not a tool to figure out racial makeup, how much money you make, or the other silliness beyond “five people live here”.

And the ultimate proof, Mr. Out of Touch with Reality? That’s the number of people typically hired by companies that do that sort of thing on a regular basis. Time and time again, the statisticians get results that are almost on-target with the official Census Bureau numbers and do it annually instead of once every 10 years. 12 people are already doing this in a company like Johnson and Johnson or General Electric. And the reason I defer to their results being supeiror is they’re being paid large sums of money for that kind of research while government work tends to be less valuable on the whole.

Shay July 19, 2010 at 10:23 am

Yes, the same way that an idiot would count every penny in a bucket, taking an hour, while someone a little brighter would weigh it and divide by the average weight of a penny, taking a minute.

Eric July 19, 2010 at 12:09 pm

Micheal: What was that career you worked in all your life?

Doesn’t seem like you invented things or tried to find more efficient ways to do things. Sounds like you had a government job.

Am I correct? I’m not trying to insult, I too had a government job for 3/4ths of my life. It dulled the senses. In order to keep my mind fresh, I had to look elsewhere, which is why I studied economics for the last 10 years, while I slowly drifted into retirement mode at my government job.

michael July 19, 2010 at 4:12 pm

“Micheal: What was that career you worked in all your life? Doesn’t seem like you invented things or tried to find more efficient ways to do things. Sounds like you had a government job.”

You would be flat wrong, Eric. I’ve worked all my life in the private sector, save for a couple of years carrying mail when I was young. And as a manager concerned with issues of construction, maintenance and repair & replacement, the bulk of my career entailed finding better and cheaper ways of doing those things that needed to be done.

Who was to say those things were needed? There was always consensus on that, or the project would be shelved.

And did I ever invent anything? Yes, every time I was faced with a problem I hadn’t encountered before. I’m solutions oriented.

Old Mexican July 19, 2010 at 9:56 am

Re: Michael,

Construction costs are the same regardless of who’s paying the bill.

Before you mentioned that “I’ve spent an entire career studying the bottom line, and how to achieve a good balance of interests to the mutual benefit of self, the customer and my employees[...]“, yet you assert the above. You should know that construction costs are NOT the same, and they DO entirely depend on who’s paying the bill. Either you are guessing (meaning, you have never estimated a job), or you are not very good at what you do.

And crooks can occur either in the public or the private sector.

Comfort for fools. The BIG difference between private sector crooks and public sector crooks is who’s footing the bill.

Plus, governments commonly use private contractors for road projects.

Comfort for fools, again. So the government pays someone to do it. And? How do you know the job was correctly scoped, budgeted and estimated? What incentive does a bureaucrat to save money, when it comes from looting the taxpayers?

That is the main focus of Lew’s article: That government jobs cannot be productive, simply because bureaucrats have no incentive to procure productive investments since it’s not their money.

Matt Palmer July 19, 2010 at 10:40 am

Old Mexican,

I think this recent news from Tucson reflects much of what you are saying.

http://azstarnet.com/news/local/article_26dee8d6-9240-11df-9b2a-001cc4c002e0.html

“More than $600 million in road projects are in jeopardy because of current and projected cost overruns, missing local match money, bond interest and because most of the road projects were not fully funded when they were pitched to voters in 2006, an Arizona Daily Star analysis found.”

“The RTA hired a contractor to estimate project costs for all of the proposed transportation projects in October 2005, while creating the plan that was later put to voters. Those estimates were $250 million more than they showed on the May 2006 ballot.

Hayes said the local governments agreed at the time they should — and could — deliver projects at less than those estimates, so the numbers that appeared on the ballot were reduced based on their word. In reality, many projects have cost more, not less.”

In this case, in order to make this project more palatable to voters, they just lied about the expected costs. When those estimates prove false, they start to raid money set aside for other uses. As for the citizen “customers”, they only have one choice: http://www.wavlist.com/movies/023/liar-tailpipe.wav

Old Mexican July 19, 2010 at 4:24 pm

Re: Matt Palmer,

Good article. Thanks for the link.

michael July 19, 2010 at 4:29 pm

Absent graft or incompetence, construction expenses are fairly fixed. Anyone with competence in a given area can calculate anticipated costs, and reject bids that fall outside those parameters.

Plus, whether the job is financed publicly or privately it gets subbed out to private contractors. Local and state road departments as a rule only carry enough crew and trucks to make spot repairs and to plow the snow. When they have a major construction project they hire the same people a private builder would.

“That is the main focus of Lew’s article: That government jobs cannot be productive, simply because bureaucrats have no incentive to procure productive investments since it’s not their money.”

It’s fashionable to be cynical, but only occasionally accurate. How dedicated public servants are is a factor of the integrity of the people hiring them. I’ve seen very good and I’ve seen very bad.

The incentive consists in their personal integrity and dedication to the work. Plus, if they’re being judged by a diligent boss, they go in fear for their jobs if they’re not good at their work. Without going into names, there are some states where state and local construction is “mobbed up”. In others that’s not the case.

The incentive political appointees have to correctly budget, estimate and implement large projects is known as the polls. That’s where the people who appointed them get thrown out of office if they run too loose a ship. And in this state at least, I know for a fact that that can happen in a heartbeat. We’re not very forgiving of our public servants when they display incompetence in spending our hard-earned money.

mpolzkill July 19, 2010 at 4:44 pm

My very favorite: when a Statist calls those who resist his bull and his guns “cynical”. This coming from the dirt bag who constantly invokes “Huns” or whatever other bogeyman he can think of to try to greater frighten those naturally afraid of foreigners and discomfort. He probaby learned all this from a master cynic: the godfather of this dirt bag’s party, the idol of the latest criminal-in-chief, and maybe the greatest crook of all time. This man is even in Webster’s under cynical, albeit in an unwitting way:

“Cynical: contemptuously distrustful of human nature and motives <those cynical men who say that democracy cannot be honest and efficient — F. D. Roosevelt"

Old Mexican July 19, 2010 at 4:45 pm

Re: Michael,

Absent graft or incompetence, construction expenses are fairly fixed. Anyone with competence in a given area can calculate anticipated costs, and reject bids that fall outside those parameters.

That does not mean costs are fixed, only that you’re relying on past purchase history for certain items, like labor and materials.

Plus, whether the job is financed publicly or privately it gets subbed out to private contractors.

You don’t get it, do you? You say this as if the results were the same, but they are not. Publicly financed only means that the project is financed with loot (what some people call euphemistically “tax payer money”). Privately financed means that people took money from their OWN pockets. Who’s going to be more careful with the project costs? Who cares if the “publicly financed” job was given to a private contractor?

The incentive consists in their personal integrity and dedication to the work.

How sweet. In my line of work, the incentive is getting my ass fired if I waste the company’s money.

The incentive political appointees have to correctly budget, estimate and implement large projects is known as the polls.

Darn it if that is not enough incentive to stop a political appointee from fudging the numbers!

Right.

Jay Lakner July 19, 2010 at 11:06 pm

Michael,

There are 4 types of spending.

Type 1: You spend your own money on yourself.
In this situation you have complete knowledge of the quality of the item you wish to buy and also of how much money you are willing to spend. You also have great incentive to go to extra effort to make sure you get a good deal. Hence you find the ideal balance of quality/cost/effort.

Type 2: You spend your own money on other people.
In this situation your own personal preference is to minimise costs. The quality of the item will tend to be lower than in a type one situation. Since it’s your own money you are spending, you are willing to go to a reasonable amount of effort to get a good deal. Quality is low, costs are low and the deal will be reasonable.

Type 3: You spend other people’s money on yourself.
In this situation you wish to maximise quality. Costs becomes an irrelevent consideration. Also you have no incentive to search around and get a good deal. Quality goes up, costs go up and the final exchange will not be a very good deal (ie with greater effort put in, you may be able to purchase the same item for less money).

Type 4: You spend other people’s money on other people.
In this situation you have very little incentive to lower costs. You have very little incentive to maximise quality. You have no reason to go to any effort to secure a good deal. In other words, the item bought will be of arbitrary quality, arbitrary cost and pretty much guarunteed to be a poor deal.

In which category does most government spending fit?

michael July 20, 2010 at 10:02 am

Nice analysis, Jay. I would put government spending into Category Five: collective decision making.

Example: I belong to a community resource council that does various forms of volunteer work for the prison system, one of our public assets that’s perpetually unpopular, thus underfunded.

We donate labor, intelligence and occasionally our own funds to drum up income to put toward worthwhile projects. Collectively we decide which projects are worth funding, and which approaches are most likely to achieve our goals. We proceed according to parliamentary rules. Then when we arrive at a decision held in common, we put our shoulder to the wheel.

A democracy works in that same fashion, only with a single difference: instead of each citizen participating directly (an unwieldy approach when your population is in the hundreds of millions), we designate representatives, to act in our stead. And we agree to fund the programs they enact through legislation, by the fact that we choose to remain in this country, under their jurisdiction.

It’s voluntary. And any time we are unhappy with the job our designees are doing for us we’re not just allowed to, we’re encouraged to, dump them and find better ones.

I would fit government spending into this fifth category. An informed citizenry forms the base level of decision-making, and a responsive legislative body forms the secondary level.

mpolzkill July 20, 2010 at 10:15 am

I’m just in awe, the way you can spew such crap. I’m sure I’m not the only one with my head involuntarily shaking after reading this malarky. What do you do for the “prison system”? What sort of projects?

I could actually live with a Republic, I partly agree with you on the emotional needs of most people. Problem is this Republic has been hijacked, it happened a long time ago. It actually had fundamental flaws from the beginning, chief among them being that a republic can not be anywhere near this large.

michael July 21, 2010 at 11:19 am

“I’m just in awe, the way you can spew such crap.”

That is in fact exactly the way a democracy works. And we’ve found no better way to conduct the mutual affairs of millions of people. Whenever the state is weak, large, armed and ruthless groups take over. They then form the next state.

I’ll work with the one we already have, thank you.

michael July 20, 2010 at 1:26 pm

Mex: Estimates may be high, low or right on target. People have all sorts of ulterior reasons when they make estimates– or, they can just plain be bad at it. Costs, of course are another thing. For any large job there will be a fairly tight range of actual costs.

I’m a supporter of the open bidding process. And if you were to ask me whether I supported current practises such as sole sourcing, or cost-plus bidding, I would say they’re a ripoff of the public’s funds. Such practises invite abuses, and their adoption is a sure sign that the mission of government has been subverted from above.

The notion that governments must by their nature always be wasteful of the public’s money is, however, fallacious. That that’s so common in our time just tells us that we’ve wandered away from the mission as it was suggested to us two centuries ago by our founders. Good government requires constant watchfulness on the part of an enlightened public.

mpolzkill July 20, 2010 at 1:34 pm

“the mission of government has been subverted from above.”

Eternal putz, or bald-faced liar, that’s what you’ve got here, Donald. For months now he pretends that *all* he hears from everyone is claims of corruption.

Magnus July 19, 2010 at 10:32 am

Every American knows where the proceeds of federal and state gasoline taxes go. And we also know that other tax moneys are used to build and maintain our roads. And whenever not enough money has been spent on maintenance, road users are the very first to shout that we need to be spending more money on the road grid. It’s ours. We’ve paid for it. We need to have it on good repair. We’re the customer.

You are truly dense.

I excuse people who lack the raw brain power to comprehend these ideas. It is understandable that they cling to their fallacies, the way that a drowning man clings to a life preserver.

But not you. You have the capacity to understand this point, I just know it. You understand enough about science to describe what a fallacy is. Therefore, you are capable of grasping this basic point.

But you choose not to. Instead, you HIDE behind a pitiful defense mechanism — that we’re all a bunch of ivory-tower academics, but you are Mr. Real World.

What you don’t get is that (a) it’s irrelevant what experience any of us may have, and (b) your assertion is simply false. I have been an entrepreneur since I was 12. I have built and run dozens of businesses, some that worked and some that didn’t. There are lots of people here with similar backgrounds.

Unlike you, however, I appreciate and try to apply the good ideas that I occasionally find in “some book.” That’s what smart people do, so I try to be like them.

As for your persistent error about roads and the Calculation Problem, the point you are missing again and again is simple — TAXPAYERS ARE NOT CUSTOMERS.

In a business (as I am sure you know), one spends money to make money. With regard to every dollar spent (which can be spent only once), you are either contributing to a RETURN of money (i.e., spending in order to generate revenue), or you are not (i.e., wasting capital).

Every expenditure contributes to this “bottom line,” for better or for worse. That is economic calculation in action — analyzing every expenditure, comparing it to EVERY OTHER possible expenditure you could be making, and determining which ones are actually contributing to revenue and profit, and which ones are merely a loss, and using those comparisons to guide your decision-making process.

And, one hopes, it’s a good idea to be able to do this with more than just a guess. It helps to use numbers, so one can identify the expenditures that merely break even, and separate them from the ones that yield a profit, and tell the big profit-makers from the little ones, and distinguish all of them from merely flushing cash down the toilet.

Government can’t do this.

Economic calculation is such a simple, intuitive, automatic process that you probably never even noticed it, but Mises showed how governments can’t engage in this simple act of economic calculation.

Why?

Because government gets its money by force. People do not buy their use of government roads with voluntary payments.

What would Starbucks look like if it got $50 million every year, with pre-scheduled annual increases, regardless of which particular products it actually delivered, how its stores were designed, where they were located, how it priced its products, what services it offered, and how it trained its employees. Let’s say it got its money from taxation instead of paying customers.

Even with the best of intentions, how would Starbucks know if it needed to offer free Wi-Fi or not? That’s a cost. Does offering it contribute to Starbucks’ profits, or is it a waste of money better spent on other things, like a new kind of cookie, or a new training program?

If Starbucks got $50 million every year, whether it offered Wi-Fi or not, it would have NO WAY OF KNOWING if free Wi-Fi was leading to more profit or less. It would have no INFORMATION on which to base the Wi-Fi decision. Any choice it made about Wi-Fi would become a mere GUESS, and after it made its guess, there would be no way to follow up to determine if it guessed right or wrong.

As it happens, Starbucks can try out free Wi-Fi, as an experiment in some stores, and then see if it increases or decreases profits. Economic information guides economic decisions.

Government can’t do any of this. It gets its tax money whether it builds a road everyone wants, or if it builds a less optimal road. There is no economic information in the entire funding-and-building process that will tell a government if it should build a road (as opposed to anything else it could possibly do with that money), and if it builds a road, tell it what kind of road is best, WHERE to build it, what design to use, what materials to use, what maintenance schedule to use, etc.

There’s no economic feedback mechanism in government building projects. The only feedback that exists is not economic, but POLITICAL. As a result, all governmental decisions end up being made not on the basis of economic criteria, but on political criteria. This is why government building projects always and inevitably devolve from being ECONOMICALLY sound to being POLITICALLY expedient.

That’s why the US government hired so many census workers — it makes political sense to do that. Economically, as J Murray pointed out, it can be done more accurately for far less money, but POLITICALLY, the Obama administration needed to pretend that more people were gainfully employed than actually are.

This information vacuum is the reason why all governmental enterprises experience ever-rising costs, and ever-lowering quality, and they continue to deteriorate until they reach a point of political embarrassment. Schools, prisons, roads, the census, the post office, etc. It’s all the same, because the economic processes are always the same — there is a vacuum of economic information whenever you sever the connection between revenue and productivity.

But this is basic Austrian Econ stuff. And you’ve bored me for the last time. Either you will decide to do a little reading (and more importantly, some thinking about what you are reading), or you will continue to make a fool of yourself.

At the very least, read Bastiat’s essay on the SEEN and UNSEEN. Maybe then you will at least stop basing all of your conclusions only on what actually happened, and open your eyes to considering what could have happened, which is what matters.

mpolzkill July 19, 2010 at 10:45 am

Magnus, please don’t quit, I always love your posts; wow. I just wanted to add as a further kick you didn’t need: also imagine this Soviet Starbucks has a damned good chance of getting *larger* pre-scheduled annual increases the *more* “customers” they dissatisfy or enrage.

J. Murray July 19, 2010 at 1:22 pm

A better name would be Comrade Coffee.

mpolzkill July 19, 2010 at 1:44 pm

[Hat tip]

There could be Yakov Smirnoff “commercials”: “At Comrade Coffee our scones take bite out of *you*.

Matt July 20, 2010 at 3:26 pm

Loved that post Magnus. Very well said. Simple and concise. Thanks

Eric July 19, 2010 at 12:37 pm

Your starbucks example is a good hypothetical; today we have an example with GM that might make your point as well.

These toads are going to offer up the Chevy Volt. This is a tiny little gas efficient car, sort of like a prius. It will be able to go some 30-50 miles on just battery alone.

GM admitted it can’t make these for less than $40,000 each. But who cares? They are going to be subsidized by the government – because NOBODY would buy them if they had to pay full price. And if it costs them $40k to make, what is the true cost, after delivery, showroom, salesmen, and tax and license etc. Maybe $50 out the door. In CA, that would be $5k in sales taxes alone.

Meanwhile, there is likely to be a new prius for 1/2 or 2/3 the price coming down the pike that’ll out perform the Chevy Volt before GM even gets the Volt out the doors. And Toyota will make a profit. I’m guessing we will see high tariffs on these too.

Inquisitor July 19, 2010 at 12:43 pm

Nice, you could make an article out of this. :p

michael July 19, 2010 at 4:36 pm

For all your vilification, Magnus, you haven’t refuted my comment. I still maintain as being quite obvious, that taxpayers demand of their representatives that they keep the public’s roads in good order. And at a reasonable cost. If those public servants don’t perform, we eject them from office.

You ought to read the paper, especially the letters to the editor. This is a common preoccupation among citizen taxpayer/road users. That is, the state of the roads and state expenditures.

As for census data, it can’t be approximated just by counting telephones. You need to send out questionnaires, and then go to the homes that don’t return them. Otherwise your guesses are too far off to be demographically useful. Also, they serve a very concrete purpose for private industry, in providing population projection data. Developers, marketers and planners everywhere have need of such data. So it’s worth the extra money good data gathering requires.

Matthew Swaringen July 19, 2010 at 6:41 pm

michael, provide proof that taxpayers are good at “ejecting them from office”? On the contrary politicians are good at pandering to the point where we hate the bunch of them, but love our own. We don’t blame the guy going through our district ineffectual though he may be, since he’s constantly talking about how it’s all those other guys in Congress that make it where we can’t get what we want.

Rather than getting rid of him when he’s bad, we do it because some other guy is better at conning… I mean… convincing people. The good politicians waffle more than the bad ones, and are able to schmooze their way around despite constantly contradicting themselves. Tell me I’m wrong on this. Be honest, are you saying you’ve found politicians in general to be these great paragons of virtue who are always consistent. I always thought the funny thing about Senator Kerry’s run for president is how people made him out to be a flip-flopper, as if you couldn’t find the same argument to apply to just about any politician that’s ever been elected.

“You ought to read the paper, especially the letters to the editor. This is a common preoccupation among citizen taxpayer/road users. That is, the state of the roads and state expenditures.”
One wonders why it’s a “common preoccupation” when I hardly think at all about the state of my computer purchases or groceries because I know exactly what I personally spend on those things, and it’s what I chose to spend. With roads, I’ve got no idea how much of my money goes to them, and if I knew I might think it pittance or I might think it insane.

michael July 20, 2010 at 1:36 pm

“michael, provide proof that taxpayers are good at “ejecting them from office”? On the contrary politicians are good at pandering to the point where we hate the bunch of them, but love our own.”

Taxpayers are very bad at that, Matt. We have really been dumbed down. The national dialog is at its usual low (we only think it’s an all-time low because today’s dumb behavior seems more egregious than any we can recall off hand).

A majority of taxpayers vote according to simple name recognition. You’re thinking their ideas have something to do with it? No-oo. It’s the number of times their names are repeated by election day.

That why money trumps other forms of speech. It can plaster a neighborhood with little signs, bearing nothing but a person’s name. And normally the guy ends up winning. We’ve had terrible recent examples of that where I live, a guy no one knows, new to the area, but with powerful outside backers. On election day we know nothing about him but his name. Yet that’s enough.

So I appreciate fully the flaws inherent in democratic means. I would just challenge you to describe an undemocratic way of appointing leaders that worked out better. And as you will reply that firing ALL our supposed leaders would be the best course of action, I’d invite you to contemplate those who would come in their wake. Think ‘French Revolution’.

mr taco July 20, 2010 at 4:02 pm

“Taxpayers are very bad at that, Matt. We have really been dumbed down.”

hmmm public education ?

Magnus July 19, 2010 at 7:33 pm

For all your vilification, Magnus, you haven’t refuted my comment. I still maintain as being quite obvious, that taxpayers demand of their representatives that they keep the public’s roads in good order. And at a reasonable cost. If those public servants don’t perform, we eject them from office.

You ought to read the paper, especially the letters to the editor. This is a common preoccupation among citizen taxpayer/road users. That is, the state of the roads and state expenditures.

What a joke.

You’re not even trying. Yet again, your comment proves beyond any doubt that you are not even remotely conversant in the topic. So, since you have nothing to say, like the kid who hasn’t done his homework all year, you fall back on pitiful irrelevancies, just to pretend you’re participating.

You honestly want to equate these two forms of informational feedback mechanism? –

1. Taxpayers getting to vote once every few years, on only the narrowest of questions: a binary choice of Crappy Politician A or Crappy Politician B, as early-onset-dementia geriatrics occasionally crawl out from their government-funded libraries long enough to write meaningless, fist-waving letters to the editor that no one under age 70 even reads,

versus

2. Hundreds of millions of people making economic decisions every second, in real time, about how they will choose to spend every single dollar, and how they will produce to earn a dollar, every single all of which effects all of the economic choices of every other producer and consumer.

Governments don’t even pay attention to Mechanism 1, genius. They pay attention to their supporters, and the supporters of their opponents, such as banks and large corporations, who own the political system.

Mechanism 2 is private businesses operating in free markets making decisions based on the instantaneous, real-time spending choices of millions of customers and potential customers.

The former has no concern or ability to gather economic information. So, it uses political information, like your pitiful “letters to the editor,” but more often pays closer attention to corporate mega-media companies with paid salesmen acting like journalists.

The latter is the source of economic information, used in the economic calculation process, which you have wholly failed to even address, and you obviously have never heard of and do not understand.

michael July 20, 2010 at 10:21 am

“In a business (as I am sure you know), one spends money to make money. With regard to every dollar spent (which can be spent only once), you are either contributing to a RETURN of money (i.e., spending in order to generate revenue), or you are not (i.e., wasting capital).”

Good observation, Magnus. So you would classify spending public funds on the highway grid as being a waste of capital? An expenditure with an inadequate return?

If that’s your view, I can’t change it. Go with God.

Re your recommendation that I read Bastiat’s That Which is Seen, in fact I have done so, but a long time ago. And not just the first chapter, on those pesky broken windows. It pretty much goes like this:

“It is the same with a people as it is with a man. If it wishes to give itself some gratification, it naturally considers whether it is worth what it costs. To a nation, security is the greatest of advantages. If, in order to obtain it, it is necessary to have an army of a hundred thousand men, I have nothing to say against it. It is an enjoyment bought by a sacrifice. Let me not be misunderstood upon the extent of my position. A member of the assembly proposes to disband a hundred thousand men, for the sake of relieving the tax-payers of a hundred millions.

“If we confine ourselves to this answer – “The hundred millions of men, and these hundred millions of money, are indispensable to the national security: it is a sacrifice; but without this sacrifice, France would be torn by factions, or invaded by some foreign power,” – I have nothing to object to this argument, which may be true or false in fact, but which theoretically contains nothing which militates against economy. The error begins when the sacrifice itself is said to be an advantage because it profits somebody.”

http://bastiat.org/en/twisatwins.html#disbanding_troops

In other words the essay proceeds from pillar to post. He posits observations and then modifies them by finding exceptions. The direction of this line of inquiry is to (hopefully) ultimately cover all the bases.

Which I like. But to me, the world is infinite in breadth. No matter how all-inclusive you hope to be, you’ll always find more instances, and ones that disprove any absolute deductions from observation you may have made thus far. It’s a commendable task… but I think ultimately a futile one. The decision as to whether or not to disband an army is a contextual one, based on a hundred variables. (One being affordability.) It is more properly phrased as being “how many” troops one is to disband.

The same, of course, with the decision as to whether to employ finite capital in fixing broken windows. And as a lifelong fixer of broken windows, I would employ both self-interest and reason in recommending that you do. To skimp here will prove penny wise and pound foolish, come winter.

In sum, I agree with your recommendation. We should all be reading both more and more broadly. Little is served by reading something you’re already inclined to agree with. True learning comes with contemplating novel ideas. Particularly those with which you tend to disagree.

I would therefore return the favor, and recommend that you open up Tom Paine’s Agrarian Justice:

http://www.thomaspaine.org/Archives/agjst.html

mpolzkill July 20, 2010 at 10:37 am

Your side has absolutely corrupted the public, you almost all believe in the absolute rule of the majority and the resultant empire absolutely sucks, and will definitely fall, and soon. There are still a few wishful thinkers around here that argue for reform or to turn your empire back to republic; I for one am just trying to find a way to do any small part in preserving the works of people like Bastiat and Mises for the survivors.

You have been so humilitated on the “Broken Window Fallacy”, but you forever double down! Kind of like your agent Obama in Afpak. Ego: it makes you both morons.

Michael putting “The Broken Window” behind us like Obama put the age of racism and the age of dirty politics behind us:

http://blog.mises.org/13211/catallactic-unemployment/#comment-700843

The Kid Salami July 20, 2010 at 11:27 am

Anyone else have a burning desire to say this to Michael?

http://www.youtube.com/watch?v=YYxkMwPewNo&feature=related

michael July 20, 2010 at 1:59 pm

I’ve re-read the clip you gave, mpolz. And I don’t see any difference. If the baker has the window replaced, both he and the glazier benefit. If he spends the money someplace else, two people still benefit. If he invests the money, there is an obvious benefit. And if he merely sticks it under his mattress, it’s still there for his later use.

‘Splain to me again how option number one is somehow worse than the other three. Should we all just abandon our homes once enough windows get broken? That would benefit home builders… but not ourselves.

mr taco July 20, 2010 at 4:04 pm

michael you still cannot see the unseen consequences that is why you think going
to war is profitable

The Kid Salami July 20, 2010 at 4:42 pm

“If the baker has the window replaced, both he and the glazier benefit. If he spends the money someplace else, two people still benefit. If he invests the money, there is an obvious benefit. And if he merely sticks it under his mattress, it’s still there for his later use.”

My god – you are RIDICULOUSLY STUPID. You just don’t get it do you – scarcity. There is only so much stuff to go around, so when a resource is used for a broken window then it can’t be used for some other item on the task list that maybe was planned before the window broke. So, if the window had never broken then we’d be one task higher up on the list. You really really really are an unconscionable ball breaker.

Gerry Flaychy July 20, 2010 at 7:09 pm

Now let’s look at the problem from the standpoint of the baker alone.

Is it more advantageous, for the baker, to intentionally, on purpose, break all his windows and spend X dollars to repair them; or is it more advantageous, for him, not to break them intentionally, on purpose, and spend those X dollars to buy other useful things instead, thus increasing his wealth?

michael July 21, 2010 at 11:32 am

Magnus, you draw attention to this statement by your use of boldface: “there is a vacuum of economic information whenever you sever the connection between revenue and productivity.”

A government, to be legitimate in the eyes of its people, needs to provide something in return for what it charges its customers. (They would be the citizens.) And ours, manifestly, does. It provides a relatively stable gridwork of laws and enforcement, plus a judicial system that at least attempts to be fair to everyone, large and small. It may not work perfectly but it has the capacity for improvement through citizen participation.

It provides national security. Probably too much right now, but that’s preferable to not having enough. And it regulates commerce to the degree that most of us aren’t without rights, existing in conditions of wage slavery. So a majority among citizens see its utility and seek to give it their support.

You’re free to disagree. In fact I encourage you to act on your convictions– that’s what every other citizen either does or should be doing. I just don’t think your best philosophic efforts are going to bring down the government. But let’s get back to your point:

“..there is a vacuum of economic information whenever you sever the connection between revenue and productivity.”

The connection is that we do get something and we do pay for what we get. If you don’t like the deal, it is severable. Create a place where you don’t have to pay The Man. Go independent. Get out on your own. Vaya con dios. We’ll stay here, as we still think, based on the economic information we all evaluate, that we’re getting a decent deal.

André July 19, 2010 at 12:16 pm

As a libertarian – at least, that’s how I consider myself – I don’t think we should just tell this michael guy to shut up and read this and that. I think he’s trapped into few fallacies, that’s certain. But after all, he’s just asking for concrete examples – and I think that’s good thing. It’s always helpful to challenge our own mental structures and come up with concrete examples to contrast objections. His portrait of “academic knowledge” vs. “real life” sounds a bit fascist to me, and I cannot stomach it very much – but again, we are all here to learn something, no?

About that road business, I am afraid things are a bit more complicated than how J. Murray puts it – even if I am sure he got the best private education on the market. If you don’t like your plumber or you don’t like the way he fixed your pipes, you just call another one next time. There’s plenty of them at reach, probably all quite busy. With roads is different. If you don’t like one particular road – you don’t have another choice. Sure, you can take ANOTHER ROAD, but then the route becomes different, maybe awfully longer. My point is that, even if there is no such a thing as a “plumbering space”, there is definitely a geographical space, with all its physical limits. And if I privately owned the only road from a place A to a place B (together with all the land in between), then there is really no difference between my condition and a state monopoly. I could just sit and let the road rot, asking whatever toll to my “customers” – people would still HAVE TO drive thought my road.

Of course, one could say, what if there’s just ONE plumber in a certain town, too far from civilization – he could behave also as a monopolist. But again, anyone can become the next plumber, without violating anyone’s property rights (including the ex-monopolistic plumber). You cannot do the same with roads – unless you occupy with force some part of the space between place A and place B – in the example above. That’s why I think the private-roads-issue is not as simple as some here might think. It’s clear that public roads cost more than what they produce for “customers” (yeah, they are not customers – I know), but I am not as confident on the possible solution.

As for somebody hired to collect data for a statistical institute, I can just remind that statistics are have been invented, historically, just to serve the state – so they cannot but drain resources to the productive part of society in order to let the big fat parasite (“our” government) coordinate at best its efforts to leech from the rest of us. So, nobody really have to do such things and that’s the end of the story.

That also remind me that any data should fit a theoretical framework, a vision of the world that would employ such measurements to predict reality and therefore do something useful (that’s the scary part). So, in order to be USEFUL to the state such statistics would require a scientific framework that not only does not exist today, but most likely never will (for a whole list of reasons that would be too long to examine). It’s like employing someone to study hard, and determine how many angels would fit on the tip of a pinhead.

mpolzkill July 19, 2010 at 12:38 pm

Andre, of course roads aren’t simple, that’s why the government shouldn’t be in charge of them. The only things they do well are *very* simple. Scare people, rob people, kill people, and spend the proceeds (and *some* good can’t help but occur with the billions thrown around).

No one can ever say how a free market in roads in the modern world would work out. That *is* a problem. Look at the the other forums right now where fearful people argue for the State to protect “IP”. There is no sure way to assuage the fears of the State’s superannuated children.

“We are all here to learn something, no?”

No. Michael is here to run his mouth, defend the State and be a real cutie-pie. I don’t know what percentage of his hundreds and hundreds of increasingly disingenuous posts you’ve read.

J. Murray July 19, 2010 at 1:33 pm

Actually, I came out of one of the worst public school systems in America. The Los Angeles public school system. It took a few years of deprograming to get back to reasonableness.

True, out of the consideration of prudence, going private roads today would be difficult. City planning is designed in such a way that assumes only one owner and maintainer of that road exists. However, it still doesn’t change the fact that our transit system is in sore need for a total privatization absent of government control. It operated on such a system prior to the large scale nationalization of the road system in the 1930s. America managed to privately generate lengthy highways without any kind of public funding prior to that.

Roads, much like anything else our government does, is something that was picked up a few decades after the private system was in full swing. Government just road private system coattails on the idea then took it over carte blanche. Railroads, airports, highways, power generation, all of these were originally private enterprise inventions that were nationalized under the guise of “public good” or otherwise heavily regulated and subsidized in favor of a very select group of operators. And all of them can easily be released back to the private market with little impact on our daily lives.

Walter Block has a great book on the subject which includes a history of the private road system before our government got its grubby, inefficient hands on it.

michael July 20, 2010 at 10:42 am

JM: Block’s Privatization of Roads and Highways is something I’d like to read… but copies start at $16.50 on Amazon and I’ve already got some hundreds of books on my to-read shelf. So it might be a while before I come across a cheap one.

Meanwhile I’m looking at my Gallup’s Highway Atlas for 1934– and I find a majority of our county, state and federal highways were already not only there, but paved. Impressive. The only thing is, I can’t find more than a couple of short stretches across the entire US and Canada that are marked “privately maintained”. Ferries, yes. But even the majority of toll bridges would appear to be publicly funded, probably through the use of construction bonds.

Anything you could offer from Block’s book would be useful. I may find one in a thrift store or library book sale (it’s on my life list). But it might take a while.

Slim934 July 20, 2010 at 10:51 am

Block’s book is a free download on Mises.org.

mpolzkill July 20, 2010 at 10:54 am

http://mises.org/books/roads_web.pdf

Happy skimming for State propaganda opportunities.

michael July 20, 2010 at 2:55 pm

Thanks for the address. Block’s book does come up with a couple of good reasons why roads should be publicly funded:

“Jackman, writing of England
in the mid-1830s, referred to the argument “that [only] those who
used the roads should [financially] sustain them,” saying:
But the fact is that it was not alone the carriers, but the public
as a whole, that reaped the benefits from good roads, and therefore
the upkeep of the roads should not be a charge upon those
who used the road, but upon the public treasury, for all derived
the advantages from them. It was, therefore, inevitable that in
time the turnpike gates should be taken down and a more equitable
method adopted to secure the end desired.

“The American Henry Clay wrote that it is
very possible that the capitalist who should invest his money in
[turnpikes] might not be reimbursed three per cent annually
upon it; and yet society, in its various forms, might actually
reap fifteen or twenty percent. The benefit resulting from a
turnpike road made by private associations is divided between
the capitalist who receives his toll, the land through which it
passes, and which is augmented in its value, and the commodities
whose value is enhanced by the diminished expense
of transportation.”

One reason roads used to be privately maintained in the olden days is that land costs were so much lower. A farmer would benefit from just giving you a strip of land near his property. Not the case any more. Acquisition costs would eat up the viability of any private road project.

Also: in colonial times tolls were considered a damn nuisance. Everybody wanted public roads. That’s why we went to the public system.

G8R HED July 20, 2010 at 5:03 pm

michael – “A farmer would benefit from just giving you a strip of land near his property. Not the case any more. Acquisition costs would eat up the viability of any private road project.”

This claim is not valid as michael cannot speak for all farmers. Not only are farmers individuals with their own opionions about their own land but also individual with respect to what they perceive as benefit. Benefit for some may be monetary, in terms of receiving just payment for a portion of his land, or benefit may be his own personal satisfaction in cooperating with current or potential neighbors.

A current example is farmers who donate or sell portions of their farm for private roads in private developments.

Knowledge
Preference
Perception

Michael – you cannot claim to assign or predict what any of these are today for any particular individual nor can you assign or predict what any of these will be for any particular individual tomorrow. If you think (honestly) about it you will see that you cannot even predict these for yourself.

Therefore, what you claim to know regarding the privitization of roads ‘in olden days’, about ‘land costs’, and ‘farmers’ is invalid as an argument. What you are stating is merely your opinion and has nothing to do with reality. All your statement concerns is your perception of what others may or may not have a preference for. What you know tomorrow could change all of that.

Inquisitor July 19, 2010 at 11:18 pm

He’s not here to learn, though, like mpolzkill noted. Just to whine, troll, who knows what. Logic bounces off him like bullets off a bulletproof vest (or to put it another way, he’s got his fingers stuck in his ears and refuses to listen.)

Gil July 20, 2010 at 10:56 pm

“He’s not here to learn”

Ooooo! That sounded like a one-sided assertion!

Nathan Reed July 19, 2010 at 12:44 pm

Most roads in the US are: 1) Planned and routed by government, 2) Funded by government, 3) Designed by government, 4) Financed by government, 5) Constructed by government, 6) Per government developed standards, 7) Signage by government, 8) Maintained by government, 9) Permitted by government, 10) Patroled by government.

Result: 40,000+/- dead per year. Sure would not want to consider any alternatives. Unless you happen to be one of the dead. Details, oh but details.

J. Murray July 19, 2010 at 1:33 pm

Exactly. Any other company that regularly kills 40k people a year would be put out of business rather quickly. Private enterprise would be forced to create a road system that mitigated accidents and deaths to avoid losing profits. Govermnets just create the infamous I-95 here in Florida, the deadliest stretch of road in America, and never does a thing about it.

Gil July 19, 2010 at 10:56 pm

Since the overwhelming number of car accidents are caused by driver error and/or negligence – why should the road owner be liable? It’d make more sense for potential drivers to sign a waiver for car accidents.

J. Murray July 20, 2010 at 5:29 am

According to whom? Those sudies are usually done by the road owner, ie government. Why would they fault themselves?

Gil July 20, 2010 at 10:58 pm

Since when accidents aren’t caused by the drivers? Some car hit a pothole, flips a dozen times and burst into flames? Nope, every time a car accident it was because at least one of the drivers was acting irresponsibly.

michael July 19, 2010 at 4:49 pm

Normally it’s not the roads that are at fault. Overwhelmingly it’s bad drivers who kill people. After that, mechanical malfunctions in the vehicle. I’ve driven in most states, and haven’t seen any really bad roads in recent decades.

Why isn’t the annual death toll still 50-55,000 instead of 40,000? It used to be. But government-mandated seat belts, air bags and other safety standards have brought the toll down over the years. And meanwhile, signage and traffic lane lines have gotten better. And road grades are banked properly, as wasn’t always the case.

“Over 95% of motor vehicle accidents (MVAs, in the USA, or Road Traffic Accidents, RTAs, in Europe) involve some degree of driver behavior combined with one of the other three factors (equipment failure, road design, inadequate roadway maintenance). Drivers always try to blame road conditions, equipment failure, or other drivers for those accidents. When the facts are truthfully presented, however, the behavior of the implicated driver is usually the primary cause. Most are caused by excessive speed or aggressive driver behavior.”

http://www.smartmotorist.com/traffic-and-safety-guideline/what-causes-car-accidents.html

Inquisitor July 19, 2010 at 11:21 pm

I wonder what one would expect of gov’t funded studies into road accidents. The conclusion that its own poor planning and roads are to blame? lol

Oh but wait, it’s mandated certain safety measures. So. What. Private road-owners could too… But I am sure the govt’s “Objective” studies have revealed otherwise, oh so factually.

Gil July 20, 2010 at 11:01 pm

Why? Because a private road owner would take a driver who caused an accident to the legal cleaners and making that person too afraid to get behind the wheel again? Not to mention such a punishment would send shivers up other drivers causing everyone to drive safely on private roads?

Nathan Reed July 20, 2010 at 7:33 am

Gov owns the roads. Gov regulates the roads. Gov licenses the drivers. And now Gov even manufactures the cars. At what point is Gov going to accept some responsibility. Answer: Never. If we could just get rid of those pesky drivers. You know. Those idiots that actually use the roads. They are the ones causing all the problems. What an idiotic argument.

michael July 20, 2010 at 10:45 am

It’s all a big plot.

Follow the money.

mr taco July 20, 2010 at 6:08 pm

yes and that money would lead to the federal reserve

mr taco July 20, 2010 at 4:06 pm

so should we execute those violaters michael
in front of a crowd

Allen Weingarten July 19, 2010 at 1:42 pm

I appreciated Llewellyn Rockwell’s view that “The point of employment is not just jobs: it is productive and economically viable jobs.” On might derive this from Say’s law, namely “production creates purchasing power equal to the produce (or supply creates demand). In other words, economic development derives from production, where jobs & consumption are to be analyzed within that perspective. I further agree that supports to the economy, such as health, education & insurance mechanisms are to be handled by the private sector.

On the other hand (since I am not an anarchist) I submit that there is a role for government, namely that which is necessary for some form of survival. This includes an army, police force, system of laws, and that which poses an emergency (which for whatever reason is not manageable by private industry). Here, governmental activities are not gauged by profit & loss, but by necessity. Allow me to clarify. In a factory the value of its performance is calculated by the products produced. Suppose then that a fire breaks out. There would then be employees who stop work so as to extinguish the fire. This is necessary, although it is a loss to production.

We may note that anything that provides value, must continue to exist (i.e., survive) so as to do so. Yet whereas its survival is imperative, it is not measured by its contribution to value. Now I recognize that most things that government provides are not imperative, but insofar as there is justification for them, it is not on the basis of delivering value, but on preventing the destruction of something needed to deliver value.

mpolzkill July 19, 2010 at 1:48 pm

Lockheed Martin stockholders and GM pensioners couldn’t agree with you more, Weingarten.

Magnus July 19, 2010 at 1:59 pm

Suppose then that a fire breaks out. There would then be employees who stop work so as to extinguish the fire. This is necessary, although it is a loss to production.

Your economic analysis is false.

Diverting employees from normal production to fire-response is only considered a “loss to production” when you compare:
A. the normal, non-fire productivity rate with
B. production during the fire-response time period, which is lower than A.

However, the relevant metric is to compare:
B. production during the fire-response time period with
C. production that WOULD be going on if the factory were allowed to burn to the ground (i.e., zero), which is lower than B.

When employees stop production and successfully put out the fire, Scenario C never comes into existence. In Austrian terms (or at least per Bastiat), Scenario C is what is “unseen” — the result that you do not ever see, because some economic decision has caused it NOT to occur.

Under this (correct) economic analysis, stopping to put out the fire is a net gain of productivity, not a net loss.

The company manager who sees this economic truth will eventually out-perform any market rivals that insist on comparing A to B, instead of comparing B to C.

Allen Weingarten July 19, 2010 at 3:37 pm

Magnus, you are presuming that survivability and performance are essentially the same. Yet these are not differences of degree, but differences of kind. Apparently you deny the difference between a group of wagons traveling to a destination, and forming a circle when the Indians attack. Yet the former measure of performance is miles travelled, while the latter is one of life or death. It is true that if the wagoners survive, they can travel, but it requires a different approach to do so. Perhaps another example will clarify. A student needs to learn from an instructor to do well on an exam, but if he becomes ill, he needs a doctor. Would you judge the doctor in terms of how well the recovered student will do on his exam?

Magnus July 19, 2010 at 4:31 pm

Magnus, you are presuming that survivability and performance are essentially the same.

They are both economic problems. Non-survival = zero productivity.

I am saying that your premise — the way you are choosing to measure a “loss to production” in your first example — is fundamentally flawed. It fails to describe the economics of the factory-is-on-fire problem. That error leads you to your flawed conclusion that Statist solutions to economic problems are sometimes better than solving them privately and peacefully. Not true.

If you measure a “loss to production” by only looking at the pre-fire and the during-fire end states, then you are not measuring the economic reality accurately. As a result, you cannot make the correct economic decision.

Instead, to get to the economic truth, you have to measure the entire economic situation accurately, by comparing ALL of the relevant end states. This means that we must consider:

A. the pre-fire situation (maximum production),
B. the during-fire situation (reduced production) and ALSO
C. the extinguished-fire situation (production is lower than if there were no fire at all, but higher than if the fire were ignored and allowed to burn uncontrollably).

We can arrive at the correct decision (put out the fire) using private, ordinary, business-oriented, productivity-measuring, economic calculation methods — the most economically sound response is to use some workers to put out the fire, even though doing that results in a temporary loss of production, because (more importantly) doing so results in a NET INCREASE in production, when that course of action is compared to the zero-production level you’re going to experience after the factory is gone.

Therefore, your criterion of “necessity” (which you use to justify Statist solutions to economic problems) has no economic relevance or validity.

Hazlitt covered this in his book, Economics in One Lesson. To understand economics, you have to look at the big picture, not the narrow criteria you want to consider. You have to look at a situation as it affects ALL people, over a LONG time frame.

Many people commit the basic error, as you did, of examining economic questions (Do we reduce productivity to put out a fire?) by only considering SOME people and an artificially SHORT time frame. It turns out, putting out fires is an economic problem, and is best solved by using profit-oriented, private, non-Statist methods.

Allen Weingarten July 19, 2010 at 5:20 pm

Magnus, we are not communicating. I have not presumed to measure production, but assert that it is not be measured. Rather it is one thing to survive, and another to produce. The example I gave was aimed at showing that *it is not sensible to treat survival by the criteria of production*. As one final example (since you did not address the wagons or the student), consider the purchase of a book. One aspect is how well it teaches the material; the other is how long the book will last. The former requires an author who knows the subject; the latter is how well the pages and the binder are constructed. You appear to argue that the measure of the latter is by the criteria of the former. Then you criticize my assumption about the way to measure the contents of the book.

Matthew Swaringen July 19, 2010 at 5:43 pm

He did address it. He’s said you are using a false dichotomy. Your refusing part of the situation on your analysis because you think it’s not relevant when it is imminently relevant

Matthew Swaringen July 19, 2010 at 6:22 pm

What I mean is, you keep saying that surviving is one thing and producing is another, when they are both intricately tied together. This is precisely why Magnus gives you the AB, BC scenario. You cannot discount survival as an important phenomenon for producing value.

A simple illustration of the point that business can understand this is that it pays for maintenance costs on it’s equipment. Why do this if business can’t understand the value of having that equipment keep operating (survival) vs. the value that the equipment produces while it’s in operation? Good businesses absolutely demonstrate this. And bad business will fail in free market society as they fail to take everything into account as they should.

It is not a huge extension of this principle to realize that business has every reason to see that it needs defense, policing, etc. to also be successful. It also needs to take care of whom it employs, ensure that customers/employees have a way of reaching the business (roads, parking), etc. because without any one of those things it cannot function efficiently.

Allen Weingarten July 20, 2010 at 12:47 am

“What I mean is, you keep saying that surviving is one thing and producing is another, when they are both intricately tied together.”

The fact that both are “intricately tied together” does not refute that surviving is one thing and producing is another. *That is precisely the nature of a dichotomy.* Perhaps the clearest mathematical formulation is in linear programming, which differentiates between the constraints and the objective function. They are integrally connected, but one cannot be treated in the same way as is the other.

Other examples include: mind/body; analytic/synthetic; subjective/objective; theory/practice; realism/nominalism; Yin/Yang; means/end; a priori/a-posteriori; metaphysics/epistemology. Here, the The components of a dichotomy, while metaphysically inseparable, are epistemologically distinct.

So of course a business needs to have things survive as well as perform. And so does a country, which is why it has both a government and a culture.

Allen Weingarten July 20, 2010 at 6:21 am

I have claimed that there is a difference-in-kind between survival and performance, which differentiates the gauges for government and culture. This has been countered by the view that there can be no such difference. OK, let us contrast our views about the BP oil spill. Mine is that when industry has caused harm, our legal system should process suits of those who have experienced loss, against those who are sued. I presume that Matthew would treat this instead as a production problem, where the leaders of BP need to fire those who have hampered the production of oil, and hire replacements who will do a safer job of delivering oil. Of course he might say something different, but since he has not addressed the previous examples I gave, he might not address this one. His logic however is that the problems of the BP oil spill are to be addressed in a way that is no different from how the matter of production is handled.

Gerry Flaychy July 19, 2010 at 8:42 pm

“Census jobs perform no market function…

The point of jobs is for people to work towards providing goods and services that are valued by the marketplace.”
_The article

http://www.census.gov/mp/www/cpu/order.html

If we can order, and order, census products, and also pay to get some, that surely means that they are valued by the marketplace.
And thus we can say that census jobs perform market function, contrary to what the article says.

Peter July 19, 2010 at 10:09 pm

If someone set up a murder-for-hire company, and it managed to advertise without getting shut down, there would be customers paying for that too. Does that make it a valid “market function”? Of course not.

(Of course some “census products” are wanted…but those that are both wanted and legitimate (unlike murder) are precisely the ones that would be provided in a free society without any census anyway!)

Gerry Flaychy July 21, 2010 at 11:07 am

There is valid in a moral sense, and valid in an economic sense.

J. Murray July 20, 2010 at 6:15 am

Sure, the government may “sell” copies of the census, but that doesn’t mean it’s valuable. The government sells all sorts of things. They sell the various tomes that make up the sections of the CFR for $60 each (60 or so to make a full CFR set). These aren’t valuable, but are purchased for the sole purpose of keeping government off the back of business.

I can guarantee you that no one buys those census reports. They don’t have value. Why would I want to know what the population of a city was on April 15, 2010? By the time the report is even ready, it’ll be over a year out of date. I can buy a statistical report from a private entity that can tell me what it was last month AND give me accurate projections as to where it will be over the next year.

The point is, our government sells a lot of things. All they do is slap a price tag on something and decide that someone can buy it. Again, without a profit or loss mechanic, we have no idea if that product is valuable or not. The report costs are buried in the general budget, the sales aren’t reported, and we have no idea whether or not it’s a worthwhile effort. There’s more to say that they’re being sold because some bureaucrat’s job is reliant on producing a report for sale, who will protect his position no matter what. Whether or not it’s sold is a whole different matter, and we can’t tell that because if the census report data is rejected by the market, we won’t know it becuase they’ll still be offered up for sale anyway.

michael July 20, 2010 at 10:57 am

More and more frequently now, new road projects are being funded by bond issues– NOT out of cash-strapped state budgets.

Does this make a difference? Bonds are purchased voluntarily. This would seem to be the ideal solution: decision making by cash subscription.

Donald Rowe July 20, 2010 at 11:13 am

michael, to quote you from July 20, 2010 at 10:45 am
“It’s all a big plot. Follow the money.”
Yes indeed, follow the money and find out.
cordially,
Don

michael July 20, 2010 at 4:37 pm

Right. So what we have now is a majority of new roads being funded privately by subscription. These would tend to be badly needed, or maybe just wanted, arteries in rapidly expanding areas of population density.

The taxpayer doesn’t pay a dime for these. He does, of course, continue paying for patches and resurfacing of existing roads.

mr taco July 20, 2010 at 6:17 pm
michael July 20, 2010 at 6:31 pm

Not that familiar with those highways, my edible friend. But a lot of mistakes were made back in the 1960s. Detroit was one such– an urban renewal plan with a vengeance. The newer highways have gotten much better than that.

Here’s an article you might find interesting:

http://www.mesalek.com/colo/other.html

Those are some major non-state highways in Colorado, and the first two I’ve driven a number of times. The Central City Parkway is a developer’s road, just like the ones they put in subdivisions. It’s an eight mile access road. Owner: Central City.

The second is Pena Blvd– the access road to Denver International. Owner: the City of Denver. The interesting one though is the proposed Prairie Falcon Parkway Express. It exemplifies some of the issues awaiting anyone wanting to create a truly private road.

Gerry Flaychy July 21, 2010 at 10:54 am

According to the census bureau:

“people from many walks of life use census data to advocate for causes, rescue disaster victims, prevent diseases, research markets, locate pools of skilled workers and more.”
http://2010.census.gov/2010census/why/index.php

“residents themselves have used census data to support community initiatives involving environmental legislation, quality-of-life issues and consumer advocacy.”
http://2010.census.gov/2010census/why/community-benefits.php

J. Murray July 22, 2010 at 5:07 pm

Self-promotion. Anyone can say anything about themselves. Where is the huge outpouring of support by the private community over 10 year old reports?

Gerry Flaychy July 22, 2010 at 6:55 pm

Self-promotion: every business do that. That doesn’t mean that they make a false representation each time that they say something !

Gerry Flaychy July 20, 2010 at 11:34 am

“valued by the marketplace”

Marketplace is made of peoples. If some of them use something, good or service, then it is “valued by the marketplace”. It is not even necessary that they pay to use it when they use it.

mpolzkill July 20, 2010 at 11:44 am

And in this world it’s not even necessary that they want it made or done when they are forced to pay for it.

Franklin July 19, 2010 at 8:45 pm

I’ve long suspected the insistent Michael is actually the alter ego of Jeffrey Tucker — the Shaolin master disguised in the bandit’s garb, purposefully testing the commitment of his monastic students.
Ever see them in the same place at the same time?

michael July 20, 2010 at 10:48 am

You know me too well, Grasshopper.

mpolzkill July 20, 2010 at 11:13 am

That *is* funny, but how could Jeffrey be this lame? And why would he almost never go to the “IP” battles? And our commitment to what? Feeding trolls? I always mean to give it up, but it can be so damned fun sometimes.

Gerry Flaychy July 19, 2010 at 10:43 pm

“The bureau hired some 700,000 workers to collect data.

That inflated the jobs number for a while.”
_The article

If to hire them, the government has to get the money from the taxpayers, then those last ones will not have that money to hire workers or spend it to create jobs.

Thus, while a certain number of jobs are created in one place, there is more or less an equivalent number that is not created in another place. This is just a permutation.

So we cannot say that it necessarily “inflated the jobs number for a while”.

Daniel July 20, 2010 at 12:12 am

But you forget “the multiplier effect” of government spending :P

Gerry Flaychy July 20, 2010 at 11:40 am

“the multiplier effect” is acting in both places, whatever who is spending that money, taxpayers or government.

Daniel July 20, 2010 at 3:28 pm

That was actually a joke, hence the :P

Keynesianism is nonsense (and I’m not Daniel Khuen or whatever)

james b. longacre July 20, 2010 at 5:38 am

does a fake job get fake pay?

mpolzkill July 20, 2010 at 11:15 am

Not if you’ve got the guns.

Magnus July 20, 2010 at 2:12 pm

Good observation, Magnus. So you would classify spending public funds on the highway grid as being a waste of capital? An expenditure with an inadequate return?

Do you have some kind of reading comprehension problem?

I do not understand how you can genuinely fail to understand what all of us have been saying to you about this topic for 3 days, and which is one of the BASIC concepts that this website is devoted to. You keep returning here, again and again, like an annoying case of athlete’s foot, but have no apparent interest in actually talking about what we’re talking about.

To answer your question: No, a thousand times no. I would NOT classify spending “public” (tax-derived) funds on the highway grid as being an expenditure with an inadequate return.

I would classify spending “public” (tax-derived) funds on the highway grid as being an expenditure with no return at all.

A “return on investment” is spending that produces income.

In contrast, government road-building expenditures do not yield a return because the State’s revenue is not money that people voluntarily spend in order to use that highway. There is no return because the government’s road-building choices do not determine its revenue.

Instead, the government gets its money from taxation. Taxpayers do not choose to pay the arbitrary tax rate that the government imposes in order to be able to use a particular road. People pay regardless of whether they feel they are getting their money’s worth or not, regardless of whether they use Road A, B, C, or D; and regardless of whether they would have paid even more to use Road E that was never built. The CONNECTION between paying for Road A and actually using Road A is severed.

This is done on purpose. If each taxpayer only paid for what he actually used, then a lot of government projects would be instantly recognizable as wholly uneconomical.

Since there is no nexus between a State’s expenditures and a State’s revenue, the government can only GUESS as to whether, where and how to build roads, more or less randomly.

And since these road-building decisions cannot be made based on economic information derived from profit and loss (i.e., positive and negative returns), they end up being made POLITICALLY. The State’s roads get build according to the State’s interests, and not according to the preferences of paying customers.

Get it now?

michael July 20, 2010 at 4:44 pm

A waste of capital, then… as I said. So you spent a half page just agreeing with me.

Public roads do serve a public good. And around here they only put in new ones where the public is demanding them. Plus, major new road construction is done now through bond issues– that is, with private funding.(Developers put in the smaller streets.) So what’s the problem?

We need the roads. We have the option of whether we want to invest in their construction or not– that is, pay for them. And we get the benefit when they’re completed. Plus, of course, contractors profit and workers get to work… and taxpayers don’t have to pay a dime.

I forget now… what was your point?

Oh yes. “The State’s roads get build according to the State’s interests, and not according to the preferences of paying customers.”

Magnus July 20, 2010 at 5:18 pm

A waste of capital, then… as I said. So you spent a half page just agreeing with me.

Troll. Adios, sucker.

billwald July 20, 2010 at 8:28 pm

My side sewer broke. The city engineer crew who fixed the the city’s half of the job did a good job and I dug my half myself. Would the taxpayers been better served if the city had put out an RFP for the job or signed an annual contract with a private contractor? I doubt it.

If I was in a private community and the side sewer broke would the condo assoc. have been more efficient or economical than the city engineers? I doubt it.

Software Jobs August 7, 2010 at 2:01 am

I am not able to view your RSS feed URL. Could you please help me?

Dave Vita August 11, 2010 at 9:21 pm

Government getting out of the way!? Not this government. The more you try and make sense of it the more it makes you think, something is very wrong. Thank you for you simple common sense. DV

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