I’m generally pro-market/capitalist but for different reasons than libertarian idealists who think the market will magically fulfill a function like weather service or environment more “efficiently.” Which means I’m pro-state in more cases, and *different* cases.
Conversation
First efficiency is not an end in itself by default. There are other concerns like robustness, worst-case capability, values etc. The efficient way to provision many things is to not provision them. The efficient solution to poverty might be to let them all die.
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Second, it’s far better to have an apathetic, incompetent, inefficient state bureaucracy fulfilling a function than a crony capitalist efficiently, competently, and passionately pursuing self-interest against the public good.
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One reason free marketers often hate Coasean economics is that to be a Coasean is to recognize a) social costs b) the principal-agent problem of having a few profit-oriented firms in charge of a function where their agency allows them to hide social costs.
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Imagine if the response to the forest fires was to privatize firefighting. You can bet the first thing the crony capitalists would do is drive legislation declaring non-approved unlicensed AQI meters illegal and take over the EPA. Control your comp metrics. Hide externalities.
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It would naturally be a consortium of PE types who also own private prisons and wilderness interface real estate who bid for the firefighting business. They’d figure out a way to keep rich areas clean and avoid instrumenting poor areas with sensors.
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And then of course they’d financialize it somehow and sell subprime fire-risk bonds on international markets.
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The low-tech inefficiency of state agencies is often a feature. They are slightly likelier to fail in ways that randomizecthe social cost fallout.
But really we need something better than markets and states for these social-cost-dominant problems.
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Any situation where it’s significantly easier to capture the upside and distribute the downside unevenly in hidden places full of people who can’t easily complain (crony oligarch high-capex sectors basically) needs a new kind of post-state/post-market solution.
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This is one reason I’m getting interested in low-cost networked sensors. Cellphone cameras have shown that low-cost sensor networks are the worst nightmare of both repressive states AND crony-capitalists.
More sensors, more widely distributed.
Sonic screwdrivers for everybody.
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