
What services would the perfect government provide? - rms
Lots of hackers are libertarians, because there is a lot of logic behind the free market. But I think it's a terrible idea to let the free market handle absolutely everything, as advocated by some libertarians. Free education is a great thing that society offers even if the system isn't perfect. The free market has completely failed with healthcare in the USA. We need police and fire protection. I'm glad that every road isn't a toll road.<p>Imagine an economically very free society with an average taxrate of 25%. What services should this government provide for free or subsidize?
======
gibsonf1
An interesting point on healthcare: can you name the major turning point from
the days of old when doctors made house calls to today? It is the
establishment of Medicare and Medicaid, which permanently distorted the entire
health care market. The government is very much involved with our health care
system, and the result is growing trouble in health care. Adding more
regulation will make it worse - history makes this point quite clearly.

I think government should provide our National Defense, the Justice System,
and Police.

~~~
Caligula
I would guess it was due to the previous difficulty of transferring injured
people when today it is easily done with ambulance/automobile/helicoptor.
Also, back then I imagine people would be far more reluctant to see a doctor
so the serious cases only that would possibly prevent people from going in.

Plus, a doctor can't do X-Rays at your house or use his fancy gear.

~~~
mhb
There were plenty of automobiles around in 1965. I think they even had
helicopters way back then.

------
wmf
I thought Hackers News was _not_ supposed to turn into Reddit.

~~~
rms
It hasn't, yet. How do you propose we make it work?

~~~
palish
It's a hard problem. One of Hacker News's greatest strengths is that no one
can downvote submissions. That will result in every story getting a fair
chance at the front page (no bury brigades). However, any general topic that
people find sufficiently interesting will get upvoted. And -technically-,
stuff like this isn't offtopic. We're hackers, and we find it interesting. But
this thread isn't really hacker related.

The only counterbalance to this right now is admins killing topics. Doing that
after a story has generated a lively discussion like this one might cause
users to revolt.

~~~
staunch
It's easy to get a big response about any topic people feel strongly about. I
don't think there's anything hard about killing this thread. I really wish I
could. Purely political and religious threads must be banned or this site will
quickly begin to suck. These topics are simply too divisive. They will pollute
the entire site.

Who cares about a "user revolt"? This site has a focus and that's what makes
it great. Those people can discuss this stuff a million other places. There's
only one place for hacker news.

~~~
palish
Users have rights. If the community decides something they've done is bad,
they can't get mad. If one person in the sky that they can't see decides
they've done something bad, oh boy will they get mad. And they'll take anyone
attached to that thread with them. You thought there was a lot of drama when
it came to public attention that editors edit titles? Just wait until they
start killing topics that have generated 30+ comments. And any drama that
comes from that (topics like "omg goodbye 2 u hackr news i are leaving") can't
be killed otherwise it would look like blatant censorship and would make even
more people mad.

A counterbalance to this sort of thing that works is a community action, not
an admin action.

A one way to implement the community action is to add downarrows. But when
someone downvotes a story, the story karma is unaffected. It's only when the
story has more downvotes than upvotes that the editors get the option to kill
that topic. So that way, the community has decided something is offtopic, but
the editor still uses his good judgment about killing a story. I don't see how
users could get upset under that sort of arrangement.

~~~
rms
Works for me.

------
jward
I believe the government should provide the following services:

1) Emergency services. These are things you don't really have time to
negotiate price on or do research for. Police, national defense, fire and
rescue, emergency medical. These should be handled by the government because
otherwise you could maximize your economic gain by taking advantage of those
in duress. "Your house is burning down and your daughter is still inside. Sign
here and agree to pay us $250,000 and we'll go get her."

2) Infrastructure, The government should own and operate various
infrastructures and provide rules and regulations for common use. Roads are a
great example of this as are the majority of airports. Another I would love to
see is 'bandwidth'. Have to government own the fiber that connects my house to
a central point. Then allow me to select any ISP and/or service that can be
delivered over that line. Ask yourself how much cheaper and better your
internet connection would be if more players than just Comcast could use your
cable line, and Verison had competition on its dsl service.

The reason I believe governments should look after these types of services is
that they can afford to make the capital heavy investments needed to provide
it, as well as provide a neutral platform for capitalist enterprises to
compete over and provide greater value. I also tend to put education here.

3) Public trusts. This has no real economic value, but I don't really trust
Haliburton with proper management of parkland or the like. Things with both a
very high monetary value and societal value should not be trusted to an
enterprise with a profit motive.

~~~
nostrademons
> Have to government own the fiber that connects my house to a central point.

What's the incentive for them to provide more, particularly since fiber lines
usually cut across constituent boundaries, yet don't cut far enough to make a
majority in Congress?

~~~
jward
I'm not sure what you mean by 'provide more'. The entire idea behind the
government owning the infrastructure and not the services that run on them is
to stimulate fair competition between private enterprises. I wouldn't really
want the government to do more than provide a usable signal to my jack.

Since I'm not a USian, I don't know what to make of your arguments about
congress and the like, but it worked out fine here in the past.

I live in Alberta and up until a few years ago the telecom was owned and
operated by the provincial government. It dropped copper to every house. I
don't see why fiber would be any different. Some provinces still run their own
telecoms.

~~~
nostrademons
Bandwidth consumption tends to grow, right? So eventually you fill the
existing capacity. Somebody's then gotta build more, or the system becomes
overloaded. I don't just want a usable signal, I want a _fast_ signal, and one
that gets faster over time.

One of the reasons we've got YouTube was that private fiberoptic companies
(stupidly) overinvested in laying new fiber cables during the dot-com boom.
When the crash came, the price of bandwidth fell through the floor. Then it
became economical to build video-sharing services and AJAX webapps and other
high-bandwidth apps.

In the U.S, our electrical grid is a regulated monopoly - not quite government
owned, but it functions effectively like it is. A couple years ago we had a
huge problem with blackouts and brownouts and a general lack of electrical
power. All the spare capacity in the grid had been used up, and nobody had an
incentive to build more. I worry that government-owned bandwidth will result
in the same problem.

~~~
Bogtha
> I don't just want a usable signal, I want a _fast_ signal, and one that gets
> faster over time.

But shouldn't the _government_ only be concerned with providing a _usable_
signal? If you want a _fast_ signal, then leave that to private enterprise.
You can pay them for a faster connection, and they can pay the government to
upgrade the infrastructure in a particular area.

------
AdamG
I've never been Libertarian nor a believer in the Free Market. I don't think I
really grasp the core concepts, though, because as I'm reading through Wealth
of Nations (among other things) I find the laissez-faire attitude is
incredibly naive.

Real markets are filled with things like marketing, fraud (two points, I would
argue, along the same continuum) and consumers who are not going to do what's
best for themselves.

My own view is that the government should provide a decent life - including
paying for meals and shelter if need be - for _every single person._ I'm at a
school where I'd rather not be, taking classes I'd prefer not to, because I
will need a degree to get a job. If I knew that the government (or rich
relatives, for that matter, although unfortunately I have none) would support
me if I were to fail at entrepreneurship, I'd drop out tomorrow.

Basically, the government should guarantee that it'll keep all people at a
basic level of human decency. This would allow all citizens to take risks,
which is essential in innovation.

Oh, and the government should handle most things that private insurance
companies do nowadays. The way I see it, people shouldn't have the choice to
not pay for some things. If we were to give people the option of not buying
health insurance, it would make us a very cruel and cold society to stand by
as the unfortunate souls who chose not to get insurance die of an expensive,
treatable diseases. The cultural cost to society is far too high.

Edit: Word choice, among -> along

------
Hexayurt
Biometric identity management.

You need a single namespace for human beings, which is cryptographically
protected so that the only entity which can link a person's reputation to
their biometric profile is a court of law. When there can only be one of
something - and there are good reasons for not federating biometrics databases
- then it makes sense for the government to offer that service, rather than
private enterprise.

On top of this, build a contract infrastructure - a set of technical standards
for digitally signed contracts - this could be free market, but the standards
body should again be unitary, so that contract standards are singular. Hence,
the standards body is quasi-governmental.

This is infrastructure which is essential to commerce, but - because of the
namespace issues - it cannot be entirely provided by the free market, which
would naturally tend to fragment the namespace. You can see an entire parallel
chain of development with DNS.

Power grid: do not offer, do not want. <http://smallisprofitable.org>

Similar approaches for water supply and sewage treatment: set standards for
those offering the services, sue those who fall below those standards, leave
it to the market. This stuff used to be unitary-provider 200 years ago, which
is why govt. still does it now, but technology has moved on.

I have a couple of not-read-for-prime-time papers on the concept I've been
working on for disaster relief called "State In A Box" that I can pass along
if you are interested: hexayurt@gmail.com <http://hexayurt.com/>

------
stuki
Police, courts and defense, with defense also including the 'most important'
vaccinations for all who enter, whether through ports or by birth. Some
reasonable upper bounds on the destructiveness of weaponry and toxins sold
over the counter are likely also necessary, even for purchasers who haven't
per se 'done anything wrong'.

There also need to be some regulation of how individuals use 'commons' like
air, water, electromagnetic and sonic spectra etc., as well as land use rules,
to avoid one person land locking others, parking their mile long yacht
alongside Golden Gate Bridge, blocking bay entry, and such.

Some minimum levels of diplomacy, aimed at providing Americans, both
individuals and organizations, 'fair and reasonable' treatment abroad would be
nice, as well, especially if backed by military muscle.

I'm sure there is more, but those are the ones I can think of right now.

------
nostrademons
I was gonna post a comment similar to this one on Reddit, but I didn't think
it'd be appreciated. I think I'll manage to piss off both the Austrian school
mises.org Libertarians and the I-always-get-screwed-by-corporations Liberals.

Free markets work when they transmit information with each transaction. When a
factory owner raises his prices to cover rising costs, he's encapsulating
information about _everything_ that's happened further up the value chain.
When a shopkeeper lowers the price he's willing to pay, he's encapsulating
information about consumer demand and everything downstream in the value
chain. If a new means of production becomes available that's more efficient
than the old one, there's a profit opportunity available for the aspiring
entrepreneur. And everybody has an incentive to pass on correct information,
because otherwise it's their own bank account that will suffer. This appears
to be the _only_ way to organize an economy efficiently.

Free markets _fail_ when transactions conceal information. For example, many
subprime loans were made to people who had no conceivable way of paying them
off, but mortgage brokers had every incentive to hide that information from
the hedge funds who bought them, and didn't have to shoulder the risk of
default themselves. Health-care patients have no way of knowing whether a
particular procedure is medically necessary and no incentive to find out,
because the insurance company pays for it. Microsoft customers had no way of
knowing whether Windows is the best OS, because there were no alternatives
(well, except Apple and Linux...pretend this is 1997 or so).

There's also the issue of transaction costs - it costs nearly as much money to
collect tolls as it does to just build the damn highway, so the "information"
that the customer sees is heavily distorted by the process of having to
collect that information.

So, based on this, I can derive some general principles for the role of
government:

1.) It should provide the institutional framework necessary for the market to
function at all, eg. contract laws and defense.

2.) It should rectify the "lemon problem", where sellers conceal vital
information from buyers or vice-versa, eg. consumer protection laws, implied
warranties, truth-in-advertising laws, full disclosure on mortgages, SEC
regulation, etc.

3.) It should prevent companies from leveraging a monopoly to enter a market.

4.) It should rectify externalities, where a firm takes something of value to
others but doesn't pay for it, usually because it's too difficult to arrange a
transaction. The classic example is pollution.

5.) It should provide goods and services where the transaction cost of
attempting to measure and restrict usage is greater than the actual value of
the service. Markets will never develop in these areas otherwise. A good
example would be roads.

Some concrete examples, which'll probably seem kinda out-there:

To start, I wouldn't have any taxes at all. Instead, the government owns all
land, and raises revenue by auctioning off leases on land, natural resources,
and pollution credits. These leases would be tradable, subdividable
securities, and would be subject to normal SEC prohibitions on disclosure and
insider trading. If you wanted to construct a skyscraper that you expect to
last 50 years, you'd buy a 50-year lease on the land. If you ended up selling
it after 20, you could sell the lease on the open market, but the land itself
would revert back to the government after another 30 years. The government can
also buy the lease back by paying market rates.

This helps the externality problem, because every time the voters want to
prevent something like a polluting factory, they have the legal ability to,
but they also have a precise dollar figure for how much it'll cost, in
economic terms. If people don't want oil companies to drill in the Arctic
National Wildlife Refuge, they can simply block the lease on drilling rights,
but it will cost them a few billion dollars. Then they can decide whether the
economic value to oil companies is worth more than the government services
they will receive from it.

As for spending itself - roads are an obvious one, because the transaction
costs of tolls are hellish. Defense is another one - I don't think we need to
spend quite so much as we do, but we do need a strong military.

I would _not_ provide free education, other than the basic literacy and civic
requirements necessary for democracy to function. You tend to get what you pay
for. Free education not only leads to bureacratic, uncaring schoolboards, but
it also leads to freeriding, uncaring schoolchildren.

Instead, I'd create rigorous public evaluations of all schools - not
necessarily tests (which generally reflect the politicians' biases more than
actually useful information), but statistics about where graduates end up,
satisfaction levels, evaluations from past students, etc. Then let people
choose - and spend their own money - on schools. Since people shouldn't be
denied education based on what their parents do, there should be loans
available - but through the private sector, not public.

Also, education has a problem in that it takes years for it to pay off, and
market conditions can change dramatically between when you enter and when you
exit. To insure against this, I'd create a tradable derivative called "salary
futures" (again through the private sector). This is not insurance on _your_
salary (that would have a huge moral hazard problem), but rather a promise to
pay the change in the difference between the average salaries of two
professions. These can be bundled into funds if necessary, to diversify across
the whole economy. So if you want to become an engineer but find that salaries
have gone way down by the time you graduate, your salary future will kick in
with the difference for X number of years, and then you can decide whether to
stick with it or retrain as a lawyer.

Health care is tricky because nobody wants to die, and if life really is
priceless, then people should be willing to pay infinite amounts of money to
avoid dying. Markets aren't meant to deal with infinities. I'd need to think
about this; I suppose if I actually came up with a workable solution I'd be
rich and famous and wouldn't be posting it on a glorified message board. ;-)

~~~
rms
Good ideas, but I still think that having no real free education will end up
destroying the lives of a large number of poor kids.

An unwed mother has a six year old boy that is only a burden to her. She
doesn't care about her son's future so she's not going to spend her hard
earned money on sending him to school. He goes to the free schools for the two
years it takes to learn how to read.

What happens next? The mother isn't going to take out a loan to pay for her
son's education. Does this eight year old have to decide if he wants to take
out loans to keep going to school? I don't think many economically oppressed
eight year olds would make the right decision.

~~~
nostrademons
I was thinking that free education would extend up through 7th/8th grade, more
for political reasons than for economic reasons. An educated citizenry is a
prerequisite for democracy. Without it the whole system risks collapse.

But primary school should teach things necessary to evaluate the claims of
others, not to prepare you for the working world, however. Reading, writing,
and rithmetic are obvious ones. But instead of branching off into
algebra/biology/geology/etc, I think they should teach probability &
statistics, economics and finance, the scientific method in general (with the
emphasis on the process, not on the findings), and a lot of history.

------
s_baar
Besides a lot of the safety stuff you mentioned, health care for orphans and
subsidized college education based off of merit and inability to pay (combined
with a co-op, if the education is expensive), not disadvantagedness. I have
always been surprised not only by libertarians not talking about this type of
stuff, but how mainstream anti-libertarian arguments don't focus on these
glaring issues.

------
stevedekorte
How about the service of giving back 4/5ths of that 25% and providing the same
services the government did when tax rates where in that range? (courts,
policy, legislation and defensive military)

------
gojomo
A death penalty for off-topic open threads?

Intellectual property rights preventing reuse of famous three-letter logins by
people without those initials?

~~~
rms
I don't believe in the death penalty or intellectual property rights. Thanks
anyways.

~~~
epi0Bauqu
I think this is by far the funniest comment/response that I have seen on
news.yc to date.

------
portLAN
Virtual Reality, where you can do and have anything and everything you want,
thus obviating real-world conflicts and mediating.

------
Darmani
First of all, there isn't much of a free market in health care. There is much
regulation, and the current model of requiring corporations give their
employees health insurance is flawed. Contrarywise, prices have fallen in
cosmetic surgery, the only medical field mostly left to the free market.

(And where did you get the entire that free education means government
education? There have been free schools in America since before there was a
country called "America.")

Second of all, an economically free society would likely have taxes nowhere
near 25%. That's higher than Hong Kong's income tax today, and much higher
than America's income tax when income tax was legalized.

I've decided that the bare minimum of government that must be had are the
courts (and the power to enforce their rulings). A libertarian society will be
highly dependent on contracts; society could not function if you knew a
powerful client could refuse to pay and ignore court rulings. I have trouble
visualizing a fair, for-profit court system. If competing court systems exist,
then how is the court system for a case chosen? Presumably, it would be
spelled out in the contract, which gives a perpetual advantage to the vendor.
Of course, the buyer could ignore the summons, but said court could force him
to arrive and would then rule that it was justified doing so (as it was).

Everything that is not a court can belong to the free market, but that does
not mean should. For example, you could purchase the privilege to drive on one
company's network of roads, but, barring some major advances in scanning
technology and some means of stopping trespassers, the need to enforce that
only paid cars use the road would be extraordinarily cumbersome. The best
private road system I could see would be to have a monopoly on roads in every
region; road companies could then make deals with neighbors for interregional
traffic and coerce developments into requiring residents to pay the road
company, at the risk of having the road company block access to the
development. However, I'm not sure I can trust a private monopoly more than a
government monopoly.

Law enforcement is also a good candidate for government control; however,
private police forces are not out of the question. There would probably be
less overhead to hire police to protect an area rather than individuals, so
police might not necessarily turn a blind eye to a homeless man getting mugged
(not to mention that said criminal should be caught for the same reason Animal
Control kills animals becoming accustomed to attacking humans). However, a
system where every five feet is patrolled by a police force with different
opinions of what an arrestable offense is is hardly ideal.

Fire protection, another commonly cited candidate for government control,
could actually work pretty well privately. A computer can easily check whether
a certain building is protected, and the benefits of competition will result.
However, one problem is that a fire on an unprotected building endangers
adjacent buildings.

~~~
rms
Free education doesn't have to mean government education. A system of vouchers
or subsidies could work. I'm not familiar with America's historical free
schools. Were they charities?

The 25% number is completely arbitrary. I picked a number that is lower than
what I pay today and gives the government a whole lot to play with. There's a
good chance we'd be better off with a sales tax or transaction tax instead of
an income tax, but it's not important for deciding what services the
government should provide.

------
curi
Why are you glad that every road isn't a toll road? You are imagining that
would cost you more, I think. But if you pay X dollars of taxes towards the
roads every year, and otherwise would pay Y dollars in tolls, why assume X<Y?
In general the free market does things more cheaply/efficiently -- why
wouldn't that be true of roads too?

Also, isn't is a bit ridiculous to call government schooling a success? It's
failing in a wide variety of practical ways quite apart from any philosophical
objection to the government deciding which ideas our kids are supposed to
learn.

~~~
nostrademons
Transaction costs. Toll collectors get paid shitloads of money. You also pay a
cost in lost time. If you get paid $50/hour and spend 5 minutes a day stuck at
a toll plaza, you're wasting over $4 in time daily, which is often 4 times the
monetary cost of the toll. Over a work-year, you'd spend nearly $1400 in lost
time while waiting for tolls.

~~~
mhb
Maybe competition between roads would reduce the time spent at tolls. Also,
presumably, unmanned toll booths would be used.

You may currently be spending more than $1400 to the government to pay for
government roads. With competitive incentives in road placement and size, you
might save more than enough time to offset the transaction costs.

~~~
nostrademons
Until the development of electronic transponders, there was a physical limit
to how quickly you can collect tolls. It may be somewhat practical now that
you have drive-through tollbooths, but there are a bunch of other problems it
creates. For example:

Roads are a high-fixed-cost-low-variable-cost industry. I posted on these at
Reddit - <http://reddit.com/info/2fquz/comments/c2fttk>. Everything that's
wrong with airlines will go wrong with roads, and more. I suspect that you'll
see massive overinvestment in roads as road companies try to capture market
share, then the huge number of intersections (all toll, remember?) will
_reduce_ driving efficiency.

Free markets solve a lot of things, but they don't solve everything. There's
no magic wand that makes them more efficient than a public solution. There
are, however, a series of incentives and information-transmission mechanisms
that usually give a free-market operator an information advantage over a
public operator, hence letting them produce more efficiently. If the
incentives point in the wrong direction, though, you get _less_ efficient
production.

~~~
mhb
You seem to be asserting that consumers are not better off with the airlines
deregulated. Although I hate air travel and everyone likes to complain about
it, I don't think you can argue that, as government has been removed from
airline regulation, air travel has become vastly more cheaper and available to
more people and that it is possible to reach many more locations by plane.

Similarly for another high fixed cost industry which you cite -
telecommunications.

Free markets might not solve everything, but they're almost always better than
the alternatives. As examples of the alternatives, consider the postal
service, government-run schools, Medicare and welfare.

~~~
rms
The governments subsidize airports through enormous amounts of land close to
cities at below market rates. Without this intervention, airfare would be much
more expensive. Do you think we would be better off if airports would have had
to purchase their land on a true free market or is it good for a government to
give airports cheap land?

~~~
mhb
It's hard to know. Presumably the system would look different today if the
government had not distorted it in that way. Perhaps if market incentives were
allowed to operate instead of the land being taken, we would all be flying
around in the jet cars we expected.

~~~
rms
I doubt it. Fossil fuel based flying cars are even more unsustainable than our
current cars...

~~~
mhb
You sound so sure. You don't think if the enormous amounts of subsidies the
government had spent on airports had instead been allowed to flow to
alternative transportation modes or energy research, things might be
different?

~~~
rms
OK, it is certainly true that things would be different in a better way if our
government would spend a sizable portion of the taxbase on energy research
instead of wasting it an utterly insane manner.

------
blored
A perfect government would only concern itself with monitoring currency and
prisons.

