Is there no one else on the planet who does not recognize the fundamental flaws inherent in being
“on the grid” ?

If you want power, get your own genset.
If you want water, recycle.
If you cannot manage your own sewage,
move to ——- or some other cesspit.
If you want communications get wireless.

Anything less makes you a slave to your own needs.

Anything that requires a physical installation on
what the statists refer to as public property is
merely a road to corporate serfdom.

Sure they do. They just attribute all such amok-running to the Opposition Party, whoever that may be, thinking that they themselves are somehow immune.

And when a sympatico government official does something undeniably horrible, then they claim that he only went wrong because he abandoned the True Form of the preferred governmental system (e.g., “Stalin didn’t represent true Communism.”).

I am with you on this meddling minded insanity. Looking at these and other posts, it occurs to me that excuses for intervention come when people try to get around the fact of scarcity. The assumption seems to be that abundance is the natural state of things and the government’s function is simply to restore the natural abundance prior to market distortion. It’s as if one were shooting the (market) messenger.

This seems to be why you constantly hear all sorts of lurid and paranoid hypotheses about possible outlier cases if the market were allowed to work unhampered. The real question they seem to be asking is “where’s the powerful force that’s somehow going to make all problems disappear in your model?”. Hence all state worship. No matter what various actual states have done and continue to do, they at least claim in principle to have the solution to everything. It’s merely then a matter of implementation or reform etc. None of the statists ever seem to invent various lurid hypotheses for state power run amok. Or even to consider actual examples! Other than the usual “couple of rotten apples” attitude…

The Supreme Court justice is an agent of the government, mind you, who resembles a garden-variety dictator the more that he decides to invent new legal theories on his own. He decrees what everyone shall do and not do (with greater and greater scope of authority as time goes on, apparently). A property owner commands no one, but merely expects others to refrain from interfering with his property. If these two men are the same, then language has no meaning.

The idea that you can use the same word — “holdout” — to describe both people is quite astonishing. Deeply confused and misguided, really.

This is the psychosis of engineers and technicians, that they think the entire world should be mallable to their dreams of optimal design.

Excellent point, Mr. Heinrich. But there is one profession that puts engineers to shame when it comes to megolomaniacal psychosis — urban planners.

Your statements are absurd. I’m not denyhing the laws of geometry. You’re simply constructing a strawman.

Your talk of “geometrically optimal routes” is meaningless. You fall into the neoclassical trap of thinking that interpersonal utility comparisons are possible. If someone doesn’t want a road built along their property — for whatever reason, it really does not matter, because it is their property rightfully — than that’s their right. Maybe they don’t want the road built along their property because they don’t like the name of the person who’s building it, or because it’s a Tuesday, or maybe they’re just a nasty person, or whatever. So what.

Regarding the holdout’s rights above and below, their rights extend only so-far as they’ve homesteaded property. You can’t build so near beneath them that it would collapse their property, and bridging above them would have to be done in such a way that it didn’t (for example) interfere with their growing of crops. Walter Block has discussed this in his works on private roads. Regarding rumbling below, it is debateable to what extent such is allowable, but there is only an argument against it if it is to such an effect as it interferes with their use of their own private property. And regarding any unseemlyness of a bridge above, you have no right to the “view” of your property — only what you’ve homesteaded.

I have to love the hypocrisy from someone so concerned about “freedom” in software, that you think you have the right to run other people’s lives and violate their private property rights, because you deem a certain road construction to be “more efficient”. It would be very efficient from the road-builder’s point of view if everyone just gave them the land they needed to build land on. So what? It certainly wouldn’t be efficient for those who’s land it is. And it certainly isn’t libertarian to support such emminent domain — it is despotism.

Your analogies are particularly misplaced. A hold-out — for whatever reason, nastyness, delusion, a vow of poverty, etc — is not in any way analagous to a thief. He is merely exercising his natural rights over his property. If you build a road over his property anyways, using some bs emminent domain excuse, you are the thief and the crook.

I could make a strong argument that the only one here who’s psychotic is yourself. What else do you call someone who has no respect for another’s private property, and is willing to violate it, merely so that some “optimical path” of construction might be satisfied? This is the psychosis of engineers and technicians, that they think the entire world should be mallable to their dreams of optimal design.

“Free To Choose” is not set aside merely for convenience. In order to ensure your own liberty, you must allow others the same liberty even to do that which is repulsive to you. No matter how strongly you feel about abortion(pro or con), there is someone else who feels just as strongly about censorship (pro and con), tariffs, unions, speed limits, dress codes, smoking tobacco or anything else, drinking alcohol or anything else, taking heroin or anything else, eating meat or anything else, etc etc etc etc.

The road to serfdom does not begin with little things. It begins with big things that “most people” may agree on.

Oh, that’s some fabulous reasoning right there. We don’t know what evil or irrationality is, but somehow we’re supposed to know who is a barbarian then deny them liberty? Give me a break.

David J. Heinrich wrote:

For one, there are many alternative routes. For another, at the very least, individuals have economic incentives to allow roads to be built along their property, as it would be convenient for them.

I’m not sure about the world you live in, but in the one I’m in at the moment, the shortest path is either a euclidian straight line, or a great circle route. There can be many “alternate routes”, just as you can go from LA to NY via Bombay. They will not be the most efficient. So the “market” in this case will produce a less than optimal, efficient outcome.

By extension, some optimal geometric paths might involve expensive construction, so you might want to route around a lake anyway, but holdouts might force the construction to take the more expensive path. And based on the Train-Sparks v.s. Burnt Crops principle, the holdouts have a right not to have rumbling below or obstructions above since that came with their property. Otherwise roads become automobile subways. This might potentially be better, but would be a lot more expensive.

As to the second point on economic incentive, I gave four examples of irrational or malicious vetos. It doesn’t matter if the economic incentives are infinite if people don’t respond to economic incentives.

I.e. it isn’t an economic hold-out, but some form of evil or irrationality – the psychotic who is detached from reality so can’t tell profit from loss, the malefactor who desires to interfere and cause problems for their own sake – the person whose rationality is subject to emotion – and the satisfied, ignorant apathetic who doesn’t care to think.

Liberty ought to tolerate a great deal of evil and irrationality (mainly because in this world we do not always know what is truly evil or irrational), but they ought not be given a veto over everything. If liberty treats the civilized and the barbarian equally it will not last long.

Let me propose a fifth example to reinforce the point – a cloistered monestary along the geometrically optimally efficient path where the occupants are under a vow of poverty so literally have no economic incentive. Being cloistered, they have no use for a footpath, much less a superhighway. You might be able to reason they could benefit others, but that would be an argument from socialism or altruism. The monestary might have been there since before the american revolution and isn’t going to move short of the parousia or violence.

As a pro-lifer, I’m really annoyed that they seem to consider the problem of abortion as one of the holdouts. A 47 million victim, 33 year holocaust, and all they can do is say wait for enough of the justices to die or retire. My main annoyance is they don’t seem to advocate the policy with Iran, Saddam, Osama, or the Taliban – they don’t mind preemptive violence with “collateral damage” in these cases. Nor do most libertarians propose waiting for the thief to die and then using their estate to compensate for the theft. They want to redress injustice more immediately.

Time is money. You can’t just wait for holdouts.

However, I can already hear the political classes’ response–we’ve de-regulated it. Nuts! What that means in reality is that there is a class of licensed intermediaries to whom the utilities MUST sell, and who may sell on to consumers at a discount to the producer price, but still in excess of the producer’s price to the intermediary. The profit resulting goes into the pockets of the intermediary, and the producer at best gets some marginal value from increased econmies of scale.

What’s wrong with this picture? First, of course, the intermediary’s position is legally mandated and subsidized to the degree that the producer MUST sell to it. In the absence of that subsidy, the intermediary in all likelihood would not have a viable business. In addition, the profits don’t flow to the producer…

Now here’s something else that frequently gets overlooked–profits, in financial terms, are not just a return to capital..the price for the rental of the equity, if you will…that in theory are proportional to the risks assumed. They are also the principal source of capital for the ongoing maintenance and growth of the business. To the extent that the profits are not flowing to the producer, the producer is less able to maintain, improve, and expand its capital infrastructure. And this is a particularly capital intensive business we are talking about.

No wonder, then, that the utility infrastructure is crumbling. That’s why I bought a generator for my house a couple of years ago…Ciao!

Yours is a great instance of theory and practice so clearly lining up. It’s always the politically favored of the regulated that ends up pulling the strings of the regulation to their own advantage. People are such dupes thinking some honest, altruistic and clear headed state bureaucrat keeps things on the up and up. What a con. Great anecdote!

Throughways carry traffic over longer distances at greater speeds. They are accessible from accessways at specific points, and are a specialized good (faster transit). The interstate highway system is a network of throughways. The internet backbones are also such a network, though the traffic is paid for by the accessway providers instead of the users.

It’s true that connecting property to more than one road at a time is materially ridiculous, but that does not make the providers uncompetitive. Competition happens from one “city” to another. If the city’s streets are run poorly and the price is too high then people will gradually move to a competing city (this is why there was an escape to the suburbs in North America). A privately-owned city would be interested to maintain competitive pricing even if it was poorly run, while a publicly-owned city just raises taxes and runs it faster into the ground.

The article states,

“No single individual possesses all the facts, and different individuals have different realms of skill and expertise. There are discrepancies in information. Applied to the utility market, this means that some individuals who are excluded from it by government force know valuable data that the monopoly managers do not. They might know about more economical techniques of obtaining electricity or processing water; they might have technical knowledge enabling them to design better electric grids or piping systems. They might even have tacit or inarticulable knowledge that helps them run a business on a day-to-day basis — knowledge that is difficult or impossible to put into words and communicate to another.”

But state monopolies do not prevent knowledgeable persons from gravitating towards and entering their fields of interest. Instead, they prevent profit seeking speculators from entering and leaving lines of production and stages of production. They eliminate entrepreneurship from quickly redirecting capital resources from less optimal uses to more optimal uses according to the consumer’s preferences as expressed through the price structure.

The article states,

“In Hayek’s view, the price structure of the free market is a potent tool for remedying the problem of imperfect knowledge and economizing on knowledge. Prices give consumers all the information they need to properly adjust their economic decisions — even though most consumers will never know the full details of the market disturbance that made the economic adjustment necessary in the first place.”

But more importantly, it is the entrepreneur who uses prices, specifically, the price spreads between factor costs and selling prices – his profit and loss sheet – to determine what lines and stages of production to remain in, expand in and leave. The process is a continuous cycle of speculation, investment and monitoring the profits resulting from this speculative activity. State monopolies hamper this.

The example given that

“…a natural gas pipeline might unexpectedly burst in Canada — unbeknownst to almost everybody in the United States. The decrease in the supply of natural gas will imply higher prices to be paid by local private gas providers. Most providers and consumers of natural gas will have never heard of the original mishap, but the new higher prices on natural gas inform them of the need to economize on it. Economic actors will now purchase less gas than they would have under the lower price.”

is correct, but neglects to show how it is the consumers who, through the structure of prices, will direct profit seeking entrepreneurs towards producing more gas again. In an inelastic gas market, consumers will withdraw resources from other markets and direct them towards buying gas. This will increase gas profits, and draw entrepreneurs into this market and away from others. In this way, reduced supplies which result in increased profits will induce increased entry to this market and therefore increased supplies and finally, a lowering of prices will tend to result.

Because of profits, losses and the arbitrage implied in entrepreneurship in a free market, the free market is always tending towards a consistent rate of return on investment – interest – across all lines and stages of production.

With a state monopoly, the distortion results not from the inability to attract or use knowledge, but in an inability for profit seeking entrepreneurs from entering and equally important, from leaving the market on the basis of profits and losses (consumer demand) alone.

Regarding your argument for why private road owners would face problems, this is simply the hold-out argument. It is wrong for numerous reasons. For one, there are many alternative routes. For another, at the very least, individuals have economic incentives to allow roads to be built along their property, as it would be convenient for them.

Of course, private road builders can always buy options to purchase the land, and do such along several possible paths for their roads. Private road builders can also tunnel under — or bridge over — land owned by others, because you only own what you homestead (or what you purchase that was previously homesteaded), and not a cone of the Earth going to the center of the Earth, and extending out into the heavens. They can also wait for these holdouts to die or move, as a longer-term option.

Given the possibility of private community covenants for the purpose of enhancing private life as well as private property values, the road problem becomes very easy to solve simply by the possibility of such covenants in the first place.

1. It isn’t some law of nature that it’s too expensive for private road owners to exclude those they don’t want on their roads. Furthermore, as a profit-generating venture, how to do such is up to them. Given modern technology, it is simply infeasible to say that it’s too expensive to exclude (or rather, retroactively punish/fine) those who aren’t licensed road users. Even assuming the Middle-Ages, given an adequately sufficient penalty, it still isn’t too expensive (you need only occasional policing of the roads, such that there is a very real possibility of being caught and paying an enormous fine).

2. Since anyone making an argument at all is already implicitly assuming the NAA (see argumentation ethics), I have no problems including those normative statements. However, even absent the libertarian dimension, mainstream economists are simply wrong (as in incorrect) to say that you need to have many firms to have competition, and that a situation with few or one firms (what they call “monopoly”) mean no competition.

3. Well, it seems to me that there is a fundamental distinction: you can either argue that it is acceptable to have States, or that it isn’t. If you’re going to argue that we shouldn’t abolish States, you have to accept some of the natural consequences of the existence States, which include democide, total war, communism, and fascism.

Economic law tells us that these aren’t merely accidental things. It isn’t an accident that there was a holocaust, or that GWB is going to war left and right. It is a praxeological law that one is more inclined to intiate aggression (ceteris paribus) when one’s aggression is subsidized by the taxpayers who are stolen from, because: (1) This person puts up no funding of the aggression. GWB is not paying one dime for the funding for our war in Iraq. (2) This person does not in any significant way bear the costs of the war: GWB isn’t the one fighting and dying.

Although this may sound extreme, it isn’t a condemnation of less radical supportes of the free market, or of minarchists. I will applaud anyone on any issue on which they support the free market / private property rights and oppose the State.

However, if you’re going to have a talk about the fundamental matter, you can’t have your cake and eat it too. Now, I’m aware that some think that the anarcho-capitalist position is impossible; that, absent States, we’d have Hobbesbian anarchy, chaos, disorder, etc. I don’t agree with this view, due to praxeological considerations as well as the very nature of man as a social being. However, granting that it’s true: I would pit the worst sort of world-wide Hobbesian anarchy on a world-wide scale against this last century of Statism, and say that the number of people murdered, tortured, assaulted, or otherwise abused would have been far less (by orders of magnitude) over the past century, than the death, torture, assault, etc that this past century under Statism.

Your point #2 is heavily loaded with normative statements about the “proper” understanding of monopoly and the neoclassical position, and you are clearly showing your Rothbardian anarcho-capitalist stripes (whether that is good or bad is up to the reader to decide). As to whether something is underprovided or overconsumed, you are exactly right that we need private property rights and a free market with accurate pricing signals to tell us this. But, whenever that institutional framework is difficult or impossible to achieve (such as I am arguing with public goods like city streets and sidewalks), then we know, even if we cannot measure the degree to which it exists, that resources will be misallocated relative to the market outcome. Historically, private roads were overutilized and underprovided, and travelers and shippers sought out other alternatives, namely water-based routes or railroads. My point is that when a service (such as road use) is non-excludable, you will have an increase in use and a disincentive for production in the private sector (what honest economists, Austrian or neoclassical, call “market failure”)leading to underprovision and overconsumption relative to the ideal market outcome, regardless whether or not we can actually pinpoint or measure where this “ideal” would be.

On point #3, you are arguing from an anarcho-capitalist normative perspective regarding the state, not a purely economic or cost-benefit argument, so our common ground no longer exists.

Finally, the previous post regarding the example of Standford University is a good analogy for how the neoclassical position on natural monopoly and the Austrian argument for private property and pricing signals can be resolved and integrated, in my view, and was really what I was getting at in my initial post regarding the article in question.

Consider four of the property owners along a critical section (it doesn’t make sense to have a serpentine road that has to wind three miles to go forward by one). One is a decompensating psychotic that is convinced, but the voices in his head are saying “no”. A second is a sadistic misantrope and realizes how everyone will benefit and enjoy the road, and he can cause pain simply by saying “no”. The third just buried “fluffy” in the back yard and can’t bear the thought of touching the grave. The fourth just likes to watch ESPN all day, doesn’t care about economics, your offer and just doesn’t want to talk to you no matter what the offer. All these would have perfect property rights, and even if you could convince 496 of 500 other owners, these would hold out and you cannot convince them economically. So what do you do?

If government forces the sale, then the property is stolen. There will NEVER be good title to the property. For if government were to redress the theft, they would have to give the property back to the original owner with full rights. The alternative is Kelo which is a greater evil. The annoying conclusion is the government must hold the (tainted) title to the property of the road. They can contract construction, maintainence, but they cannot sell or give away what they don’t properly own (they can only return it to the theft victims).

Roads are generally needed where everyone already own the property, so you can build a long and straight black-top, just not where anyone is.

Utilities have a similar problem. I don’t see the rural cooperatives – which are closer to voluntary organizations (the third dimension, more like Linux or opensource developers). There is the third possibility, and that might be the most appropriate for such monopolies.

The State and The (private) Corporation are not the only alternatives, though I think it would require state power to get the right-of-ways.

Private utilities are bad just as the church of England was bad when it was linked with the state (state powers used in promotion of the church, and church authority used in promotion of the state). But that need not be the case, but it would require a separation of public corp and state.

I’ve noted that a lot of corporations tend to like the state, so would probably build one if given the chance to exploit economic coercion. Corporatist Libertarians might not be different from Regime Libertarians.

I’ve also been to gated communities and business parks that are clean, well-maintained, and provide a full complement of utilities services.