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February 08, 2005

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» Free market protection agencies and the tragedy of the commons from Samizdata.net
Get into a discussion with any self-described anarcho-capitalist and it is only a matter of time before you are directed to David Friedman for an answer to the conundrum posed. I have generally considered such appeals to authority as tacit admissions o... [Read More]

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Scott Scheule

And further, wrong until someone can prove without a doubt that the state will tend do a better job than the private sector, in general.

As it happens, I'm more than willing to grant some leeway--it certainly need not be proven beyond the shadow of a doubt. Any general theorem showing that governments tend to correct market failures would be welcome.

You have interpreted my argument strangely:

My theory predicts that in general any positive outcome achieved by the government will be achieved by voluntary effort in the absence of government.

I did not argue that any positive outcome achieved by the government will be achieved by voluntary effort. That claim would be too strong. Rather I argued that there is nothing showing that governments will act in such a way as to improve market outcomes. That is, so far as I know, true.

Moreover, you seem to have mysteriously reversed the procedure. I did not "convert a particular instance - state funding of neuron research - into a general principle." Rather, I did the precise opposite: took a general principle and applied it to a specific case.

You're more than welcome to quote from any of my blogs, but I'd appreciate if, in the future, you'd send me an email or notify me somehow. It's only courteous to allow someone to defend themselves.

Frank McGahon

I did not "convert a particular instance - state funding of neuron research - into a general principle." Rather, I did the precise opposite: took a general principle and applied it to a specific case.

The thing about general principles as opposed to universal principles is that they don't necessarily apply in all cases. I'm quite prepared to believe that the general principle applies in this specific case (although I'm sympathetic to laissez-faire anyway) but you didn't demonstrate that it does. If you are trying to persuade someone who has an entirely different ideological outlook, such as your friend in this case, it is probably a waste of time to appeal to the general principle and hope that, this time, the scales fall from their eyes. Better to debunk any of the specific reasons why someone might think that the government might to a better job of funding scientific research than the private sector even if they accept that the government does a lousy job of, say, running an airline. Especially so if they haven't come around to accepting that the government does a lousy job of providing education and healthcare despite ample evidence littered around.

Scott Scheule

Perhaps not persuasive, but my goal was not persuasion: I was simply answering a question posed to me.

As it stands, the general principle is a universal one, so far as I know. There is no proof that governments reliably and on average improve market outcomes.

Frank McGahon

Perhaps not persuasive, but my goal was not persuasion: I was simply answering a question posed to me.

Which, bringing it back to my original point, is a "bad" form of "argument".

As it stands, the general principle is a universal one, so far as I know. There is no proof that governments reliably and on average improve market outcomes.

Those two statements aren't related. For the general principle to be universal, it follows that for every single instance the market will produce a better outcome than the government. This would be falsified by one single instance not comforming to that principle, not by proving the opposite.

I wouldn't be so foolish as to believe that governments reliably and on average improve market outcomes - generally I believe the opposite to be the case - but equally, I wouldn't be so foolish as to assume this principle to be universally true no matter how neatly my theory is constructed. Or put it another way: My classic liberalism merely requires the general principle to hold, If your anarcho-capitalism requires it to be universal how does it fare if a counter-example is proved beyond a reasonable doubt?

In fact, despite what might have obtained in Iceland a long time ago, there's very little reason to believe that the market outcome for security and dispute resolution would be an improvement on that provided by the government. Considering contemporary Somalia, there's even better reason to believe that it would be a significant disimprovement.

Scott Scheule

"Which, bringing it back to my original point, is a "bad" form of "argument"."

Only if you conflate an argument's persuasiveness and its validity. There are presumably many arguments that are non-persuasive, but still perfectly good arguments. And there are doubtlessly many bad arguments that are quite persuasive.

You may call my argument non-persuasive, at least with my liberal friend, Daniel. But it is still a valid argument.

"For the general principle to be universal, it follows that for every single instance the market will produce a better outcome than the government."

No. For the general principle to be universal, it must follow that no government ever acts in such a way as to reliably and on average improve market outcomes. Which is true.

"This would be falsified by one single instance not comforming to that principle, not by proving the opposite."

Of course.

"Or put it another way: My classic liberalism merely requires the general principle to hold, If your anarcho-capitalism requires it to be universal how does it fare if a counter-example is proved beyond a reasonable doubt?"

The principle would then of course no longer be universal.

"In fact, despite what might have obtained in Iceland a long time ago, there's very little reason to believe that the market outcome for security and dispute resolution would be an improvement on that provided by the government."

Except of course standard microeconomic theory about the dead weight losses provided by monopolistic industries. To the contrary, there is no reason to believe that government production would be an improvement on private outcomes.

Frank McGahon

There are presumably many arguments that are non-persuasive, but still perfectly good arguments. And there are doubtlessly many bad arguments that are quite persuasive.

Agreed on the latter, but a "perfectly good argument" which is (wilfully) non-persuasive is about as much use as a chocolate teapot. There's nothing edifying about an answer to a specific question which simply refers the interlocutor to your pet theory and asserts that the answer to the specific question derives from that - this is what marxists do, because their pet theory is circular and non-falsifiable. Your answer amounts to saying "My theory predicts that this example of government intervention will fail, therefore it will fail". This isn't a valid argument unless you have already demonstrated your theory to be perfect. It's rather like telling someone who has won the lottery that they haven't actually won it because your theory predicts there is a probability of 99.99999% that they didn't win it.

Except of course standard microeconomic theory about the dead weight losses provided by monopolistic industries. To the contrary, there is no reason to believe that government production would be an improvement on private outcomes.

Again with the conversion to the general principle which drains away all the relevant detail. The big difference between production of widgets and provision of security is that those who are able to provide security also possess the means of coercion. An appeal to "standard microeconomic theory about the dead weight losses provided by monopolistic industries" doesn't really answer the concern that competing private security agencies would resemble mafia or warlord groups. Now, there might be a good argument to explain why they won't, but distilling it back to the general principle won't suffice. The thing about these general principles, they have no intrinsic merit, they are only useful if they are informed by and predict actual phenomena. Thus, any sensible theory is provisional - accepted with the caveat that if the real world fails to conform with it, it is revised or junked.

Scott Scheule

Agreed on the latter, but a "perfectly good argument" which is (wilfully) non-persuasive is about as much use as a chocolate teapot... Your answer amounts to saying "My theory predicts that this example of government intervention will fail, therefore it will fail".

I can think of quite a few uses for a chocolate teapot, incidentally. At any rate, my answer does amount to just what you said, but I hardly see the problem in that. The theory of a heliocentric solar system also predicts the sun will rise tomorrow, therefore it will rise.

Of course there's a chance the sun won't rise tomorrow, and of course there's a chance the government will reliably and on average start correcting market outcomes--but we have no reason to believe such is the case. If we find data otherwise, then the theory will be refined.

I believe that answers your objection to private security as well. The laws of economics may suddenly fail to hold for some markets, and the lottery ticket you believe has just won the prize may turn out to be fraudulent, but I hold with the general principle--it is a general principle precisely because it is largely applicable--the removal of specific detail from the theory is what makes it widely applicable. There is of course always a chance it is wrong, but it provides the best default when we have no other information.

Complete certainty is, after all, not an option.

You overstate your case. We do have reasons to believe private security provision would be an improvement. We have basic economic theory. You may say that theory will not apply to this specific market, just as you can say we have no proof the sun will rise tomorrow. Nevertheless, it will.

The private market for security may be distinguished on the grounds you describe, and perhaps that distinguishing renders the theory inapplicable, which it may do (indeed, I believe in relevant ways it does render the market somewhat unique). But the theory is on my side--if you wish to carve out an exception, then the burden is on you, not me.

And incidentally, there are descriptions of why the private production of law and security would be improvements, even incorporating your caveats about possible mafias.

Frank McGahon

I can think of quite a few uses for a chocolate teapot, incidentally. At any rate, my answer does amount to just what you said, but I hardly see the problem in that. The theory of a heliocentric solar system also predicts the sun will rise tomorrow, therefore it will rise.

Yes, but heliocentrism is considerably more robust as a theory than you-didn't-win-the-lottery or the-government-cannot-do-anything. Further, heliocentrism is generally accepted, so for the purposes of any discussion one can refer back to it as a prop. Not so for controversial theories. And in case you are tempted to bait and switch by "controversial" I'm not talking about the theory that the market generally does better than the government but your stronger theory that the market will do any given thing better than the government.

Here's an example of that bait and switch:

and of course there's a chance the government will reliably and on average start correcting market outcomes

Despite the fact that I have made clear to you a number of times that this is not the issue under discussion, you still raise this strawman. The point is that while this principle may be generally true and while you have a neat theory which explains why it is true, that theory is not proved by assertion. You say there's no reason to believe that a government funded scientific research program will be more effective than that in the private sector. Just as there is no reason to believe that the person who won the lottery has won it - that act is extremely improbable. But if your contention about scientific research is true, it ought to be demonstrable in this specific instance and not just by referral back to the principle. There might be something relevant only to scientific research with long term payoffs (I'm not saying that there is, but you haven't considered the possibility). It might just be the case that the guy actually bought the winning ticket. The question is not proved by asserting the general theory no matter how neat but by examining the specific question.

There is of course always a chance it is wrong, but it provides the best default when we have no other information.

But this is my precise beef with your argument. You are ignoring the "other information" in favour of the theory.

And incidentally, there are descriptions of why the private production of law and security would be improvements, even incorporating your caveats about possible mafias.

I've read that, but I can top it. Private security under anarcho-capitalist-mcgahonism would also be an improvement but everyone would get a pony too!

Scott Scheule

I'm not talking about the theory that the market generally does better than the government but your stronger theory that the market will do any given thing better than the government.

A strange theory to talk about, because I never claimed that. If anything is an example of a bait and switch, then that is it.

From my original post: "[the proof that is missing is one showing] that the political marketplace will reliably and on average produce results that correct private sector failures."

Despite the fact that I have made clear to you a number of times that this is not the issue under discussion, you still raise this strawman.

It was however the claim I made in my original post. If there is another claim, it is not one I have made. I assumed in the commentary to a post of mine, we would be talking about claims I had made. A fair assumption, I believe.

You, on the other hand, have consistently tried to twist the wording of my original post so it appeared I was making claims I never made.

You paraphrased my post as saying:

My theory predicts that in general any positive outcome achieved by the government will be achieved by voluntary effort in the absence of government.

I never said any such thing. What I said in my original post was:

[What is lacking is] a proof that the political marketplace will reliably and on average produce results that correct private sector failures.

That is the claim I made in my original post. The strawman has been entirely your fabrication from the start.

The point is that while this principle may be generally true and while you have a neat theory which explains why it is true, that theory is not proved by assertion.

Of course not, but nor is the heliocentric theory of the universe proven by assertion.

Moreover, my complaint was not so much with a theory but with the lack thereof.

You are ignoring the "other information" in favour of the theory.

I am not ignoring anything. If you want to present proof that governments will generally and on average correct market outcomes, feel free. I promise to pay attention.

You say there's no reason to believe that a government funded scientific research program will be more effective than that in the private sector.

More specifically, I said there's no reason to believe that the government provided outcome will be more efficient that the private sector's.

You have provided no evidence to believe otherwise. Nor to my knowledge has anyone else. Thus I do not believe otherwise.

Perhaps there is some information that would prove the general theory false--and perhaps there is some information that the sun has been extinguished and will not rise tomorrow--but it is lacking.

Scott Scheule

Incidentally, the Catallarchs commented on the pony article, in the days before I joined. There's also a comment following it by David Friedman himself.

Euan Gray

Why is it seen as necessary to PROVE whether or not the state can correct market failure?

The state exists, as does the market. Sometimes the market fails. Sometimes the state attempts to correct market failure. It is not necessary to prove whether this will succeed or not, it is merely necessary to look at the real world and decide whether or not there exists any example of successful state correction of market failure. If even one such example exists, the claim that the state cannot correct market failure under any circumstances is patent nonsense, whatever any logical proof to the contrary might say. It is a fundamental weakness in the libertarian case (as it is in the Marxist case) that resort is made to logical proof and that this is held to end all debate, even if the real world provides contradictory data.

It will no doubt be asserted in response that when the market fails it only does so because the state has interfered in the first place, and thus that any successful state correction is only correcting a failure that the state initially caused. In such a case, it will be necessary for the libertarian to prove that all such instances of failure only arose because of prior state intervention. Since libertarians seem to like logic proof and indulge in it so often, one would imagine this would be trivial. I'm not holding my breath, though.

EG

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