From: Charlie Stross (charlie@antipope.org)
Date: Wed Jan 21 1998 - 06:59:39 MST
On Tue, Jan 20, 1998 at 09:22:57PM -0800, John K Clark wrote:
> >Charlie Stross <charlie@antipope.org>:
> >What do you prefer to use?
>
> I prefer to use my personal opinion and tell nature to go to hell.
That makes two of us. (Although I tend to think in terms of altruism as
usually being a Good Thing, at least towards those who hold the same
opinion towards me, and act that way.)
Of course, this approach can cover a multitude of conflicting viewpoints ...
>>>Me:
>>>"government BAD, free market GOOD".
>
>>Explain that to diabetics who can't get reasonably priced medical
>>insurance cover
>
> Reasonably priced? You mean explain why everybody can not always receive
> medical benefits that are more expensive than the premiums they pay? I think
> it's sufficient to say that you can't get something for nothing.
Quite true. However, the whole point of insurance is _collective_ risk
cover -- from the customer's point of view. From the insurer's point of
view it's to make a profit by maximizing the return on money while
minimizing payouts. So there's a built-in conflict of interests.
Now, at this point the market is supposed to come into play, wave a
magic wand, and Make Everything Work Optimally. At least, that the official
truth I keep hearing from libertarians. (Warning: I Am Not A Libertarian --
although I have more sympathy for libertarian social ideals than for
conventional political ones).
> Exactly. If diabetics pay less than they should then non diabetics will have
> to pay more.
That's the 'market knows best' answer. I am not happy with it. It
subordinates ethics to market realities. (The ethical viewpoint being
"everybody should have access to equal treatment, in an ideal world" and
the market viewpoint being "you get what you pays for".) While it's
inarguably a description of a current state of affairs, it's not an
ideal state (which would probably be: nobody gets diabetes, grows old,
dies, or needs insurance in the first place) or even an optimal
one (everybody can afford insurance).
>>The market is good at looking after local problems. It's complete
>>crap at predicting the future
>
> And politicians good at predicting the future?
No. A screamingly obvious hole in our knowledge is how to reason under
conditions of uncertainty. There's no rigorous methodology available
for doing so (although 20/20 hindsight, in the form of Bayes' theorem,
comes in handy).
But I maintain -- the market is simply a mechanism for adjusting
resource imbalances on a local scale. One thing I notice a lot of
libertarians do is idealise the concept of the market, turning it into
a holy cow of economic dogma: as if the market is the _only_ way of
allocating resources.
It's a lot better than, say, Soviet-style central planning. But it's
got weaknesses, and I'm fairly certain that better resource allocation
algorithms exist, if only we are smart enough to identify them. What
constitutes a better resource allocation algorithm? Any way of reconciling
supply and demand that isn't vulnerable to the production and manipulation
of monopolies, doesn't encourage its core functional units to become Feudal
dictatorships -- corporation mini-states -- and encourages cooperative,
as opposed to defective, use of common resources. Oh, and it also needs
to encourage cooperation non-coercively, not by being a free market with
a coercive regulatory mechanism bolted on top of it. (In other words:
a system that encourages mutually beneficial exchanges and discourages
zero-sum games. Fun, huh?)
> The tragedy of the commons is just that, a tragedy, and unfortunately no
> system has a solution for it.
That's what I'm banging on about (above). Just because no system has
solved the problem, it does not follow that it is insoluble. And I see
a lot of extropian/libertarian thinkers seeming to blandly ignore it,
instead of fixing the defect. (The day some libertarian thinker dreams
up a non-coercive economic system that is not susceptive to the tragedy
of the commons is the day I become a libertarian.)
> There is no compelling reason why government
> should engage in projects that help most people most of the time, it's much
> more likely that they'd do things that help a very few people a lot but is
> slightly harmful to most. When the number of projects becomes large the harm
> is no longer slight.
There are exceptions. I live in the UK, where we have a national health
system. It's underfunded -- but then, we don't pay much for it; about
US $1000 per taxpayer-year that covers everything from antibiotics to
heart transplants. The advantage it has over the US system is that there's
no insurance industry; treatment is free at the point of demand, so
none of your healthcare budget is diverted into the insurance company's
back pocket. The disadvantage is that demand is potentially infinite --
leading to shortages. Ultimately an equilibrium is reached: I don't go
and pester my doctor about trivia because I know there's a long queue.
On the other hand, if I need emergency surgery in a hurry, nobody's
going to waste time asking if I've got insurance. The system's not
without shortcomings, but it's worked for more than fifty years on a
massive scale (annual budget around US $50 billion), so I'll assert
that it _is_ possible for a government to undertake a project of general
benefit to all its citizens [once in fifty years].
> Suppose I want to make $10,000, there are two ways to go about it. I can
> work to repeal hundreds of special interest laws, each one costing me a few
> dollars, or I can lobby for the passage of one more special interest law that
> will give me and my friends $10,000 and cost everybody else a dollar or two.
> The second method makes much more sense, it's far easier to pass one law than
> to repeal hundreds .
>
> This sort of lobbying won't work in the free market. If I want an executive
> at Microsoft to be promoted to a position of greater power there is only one
> thing I can do to help that come about, purchase the product that the
> executive has been advocating. Bribery will help the executive's bank
> account but it will not help his chances for advancement, it will hurt it
> because his boss will note that his decisions have been poor and do not made
> economic sense. The stockholders will note the same thing.
Alternative: a political system that is not amenable to bribery,
nepotism, or corruption and that follows the old dictum of kings that
"he who rules best, rules least". But that's another matter.
> And since that time "useful government" has created a sea of blood. It
> mystifies me when people go on and on about how evil corporations are,
> yes Microsoft can be arrogant and yes, it makes me mad when Windows crashes
> too, but at least Bill Gates doesn't shove his customers into ovens.
Does Windows crash? I wouldn't know -- I don't let it near any of my PC's.
;-)
-- Charlie
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