Where is the Libertarian explosion coming from?

P. Breathnach

Eliot Rosewater wrote: »

Obviously. However I have tried to make the point here that the problems in government don't stem from the particular administration (Fianna Fail in Ireland's case) but rather the system itself, which strongly favours interest groups and appears to have a tendency to get larger as time goes on.

I don't think you, or anybody else, has made the case convincingly. It's easy to find things that have gone wrong either through accident or malfeasance; it's equally easy to find good things that result from the type of government that we have.

Kris Kristofferson captured an important point in the title of a song: "The Law is for Protection of the People". I buy into that. It's a much more appealing idea than the "nature, red in tooth and claw" model offered by libertarians.

It does not follow from the imperfections of the present system that any other system is necessarily better. The libertarian model (if one can call it that) that some people advocate here is, at best, unproven. Some libertarian-type ideas have been implemented in the past, but it looks to me as if the libertarian lobby acknowledges only the benefits (like economic growth) but denies the costs (such as deprivation for the majority, extreme deprivation in very many cases).

Additionally, the way in which government provides education in this country means that we have to take whatever they give us, which restricts choice and, ultimately, quality. This monopoly is far worse than any potential Ryanair monopoly people use to criticize liberal economics. All the alternative solutions proposed here are still working within that framework that gives Teachers' Unions and other interest groups such as the Gaelgoirs too much clout, attempts a one-size-fits-all school system and is motivated by political gain.

Do you actually know if Irish education is of poor quality? Or are you simply swayed by DF's polemical attacks?

Anonymous1987

Eliot Rosewater wrote: »

Obviously. However I have tried to make the point here that the problems in government don't stem from the particular administration (Fianna Fail in Ireland's case) but rather the system itself, which strongly favours interest groups and appears to have a tendency to get larger as time goes on.

I agree. But it seems that Libertarians blame the government for everything without exception. "Democracy is worst form of government except all those others that have been tried".

Eliot Rosewater wrote: »

Additionally, the way in which government provides education in this country means that we have to take whatever they give us, which restricts choice and, ultimately, quality. This monopoly is far worse than any potential Ryanair monopoly people use to criticize liberal economics.

I don't see how it is worse, monopolies are inefficient just as governments are inefficient. A Government monopoly limits choice but government can introduce competition and choice also. Consider Ryanair and Aer Lingus. Ryanair is cheap (if you book far in advance) but the service is terrible. Aer Lingus has reasonable service but isn't so cheap. Personally I find that arrangement much better than Ryanair becoming the only firm.

Eliot Rosewater wrote: »

All the alternative solutions proposed here are still working within that framework that gives Teachers' Unions and other interest groups such as the Gaelgoirs too much clout, attempts a one-size-fits-all school system and is motivated by political gain.

I don't see how replacing government with the private sector would make things much worse. Wages tend to increase in service industries, rarely decreasing, even in the private sector. Just look at accountants and solicitors fees. We cannot be guaranteed that private schools would provide a better service especially if they are in receipt of a guaranteed subsidy from the government. I would be more in favour of subsidising the student and letting him/her decide (or the parents). I think government has a role in filling the gaps in access to education at the very least.
It is unfortunate that we must all learn Irish and I agree this should be changed but there is quite a large variety of subjects taught at leaving cert level.

silverharp

Anonymous1987 wrote: »

I don't see how it is worse, monopolies are inefficient just as governments are inefficient. A Government monopoly limits choice but government can introduce competition and choice also. Consider Ryanair and Aer Lingus. Ryanair is cheap (if you book far in advance) but the service is terrible. Aer Lingus has reasonable service but isn't so cheap. Personally I find that arrangement much better than Ryanair becoming the only firm.

have you not answered your own question? the 200lb gorilla gets fat, new firms come in and undercut or offer a premium service compared to what is available. its also difficult to see how one could get a monopoly in airlines under a liberal regime? Imagine if in this example Ryanair tried to "abuse" its position and charge €500 to fly to London (like aerlingus in the 1970's ) other businesses would come together and setup a new airport if necessary.
I must say I'd prefer to take my chances with a market solution compared to knowing I am going to be fleeced or treated badly having to use a state run airline or airport which will charge more or provide a poorer service 99% of the time.

P. Breathnach

silverharp wrote: »

have you not answered your own question? the 200lb gorilla gets fat, new firms come in and undercut or offer a premium service compared to what is available. its also difficult to see how one could get a monopoly in airlines under a liberal regime? Imagine if in this example Ryanair tried to "abuse" its position and charge €500 to fly to London (like aerlingus in the 1970's ) other businesses would come together and setup a new airport if necessary.

Life doesn't work like that.

There are many monopoly situations where there is no reasonable entry for competition. Do we need two West Links, or two Dublin-Cork rail lines?

Then you have rational monopolists. If Ryanair had a monopoly on Dublin-London, of course it would charge more than if there were competition. If a competitor ventured into the market, Ryanair (which has deep pockets) would cut prices until the competitor was driven out of the market, then increase its prices again. [It's worth remembering that Ryanair actually needed government assistance to establish itself on the Dublin-London route.]

Society can not rely on the market to prevent monopolists exploiting their position.

I must say I'd prefer to take my chances with a market solution compared to knowing I am going to be fleeced or treated badly having to use a state run airline or airport which will charge more or provide a poorer service 99% of the time.

The usual trick of rhetoric substituting for hard fact. A monopolist will fleece you or treat you badly if he can increase his profits by doing so (your favoured example of Ryanair almost revels in treating people badly; certainly, treating people well is not part of the business plan). And I am sure you have no factual basis for your "99% of the time".

Eliot Rosewater

P. Breathnach wrote: »

I don't think you, or anybody else, has made the case convincingly. It's easy to find things that have gone wrong either through accident or malfeasance; it's equally easy to find good things that result from the type of government that we have.

I have brought up public choice theory a number of times on the thread; no one has responded I *think*. It's easy to see that when a lot of power is vested in government certain groups will want that power and politicians looking to get re-elected will want to give them some of that power. Reality has, unfortunately, lived up to the theory.

P. Breathnach wrote: »

It's a much more appealing idea than the "nature, red in tooth and claw" model offered by libertarians.

Styling it so is only to engage in mere rhetoric, I'm afraid.

P. Breathnach wrote: »

the libertarian lobby acknowledges only the benefits (like economic growth) but denies the costs (such as deprivation for the majority, extreme deprivation in very many cases).

The "libertarian lobby" has attempted to explain some of these things, but many of them (such as the provision of private charity) are regularly dismissed out of hand: if you can't cause something directly then its effect is ignored. I would try to explain some of these things, but I'd be only wasting my time and boards.ie's electrons, I think.

P. Breathnach wrote: »

Or are you simply swayed by DF's polemical attacks?

No; why would you assume such a thing?

As someone studying a maths degree I take an interest in how maths is taught at all levels. The second level Irish maths course is in a continual state of being "dumbed down". This recent Project Maths programme is a part of this, as is the new and expansive "log tables". Everyone doing the Leaving Cert knows that the further back you go the harder the papers get. I'm quite open to the possibility that this trend is restricted to maths, but I'm assuming that it isn't.

There's also the issue of business leaders expressing doubt in the ability of our graduates, the recent controversy regarding grade inflation (an international problem, admittedly), and that fact that Ireland has either 0 or 1 university in the top 200 in the world, depending on which list you use.

But coming from a libertarian, these claims are immediately suspect, I suppose.

Eliot Rosewater

Anonymous1987 wrote: »

A Government monopoly limits choice but government can introduce competition and choice also. Consider Ryanair and Aer Lingus.

I see your point, however the government monopoly on education is far more serious than any potential monopoly on air travel. The latter I can live with out; the former, no one can.

Anonymous1987 wrote: »

Ryanair is cheap (if you book far in advance) but the service is terrible. Aer Lingus has reasonable service but isn't so cheap. Personally I find that arrangement much better than Ryanair becoming the only firm.

And as long as there are a sufficient number of passengers who have the same idea as you, Aer Lingus will exist. But if there isn't, then the resources required to run Aer Lingus will have to be made up somewhere else. And this is where we enter the territory of "I want something, and if it's unfeasible to provide it, I want society to pay for it for me."

Anonymous1987 wrote: »

I would be more in favour of subsidising the student and letting him/her decide (or the parents).

Agreed, a sort of "money follows the customer" scheme similar to Fine Gaels health plan, that offers both private sector efficiency with opportunity for all. However, will you get trade unions, and by extension a government, to agree to a system where teaching suddenly becomes competitive?

Scofflaw

It seems to me that both laissez-faire markets and the state can produce inefficient monopolies. The real question, surely, is which is worse for the customer, and which is harder to break?

If we take the example of a company which establishes a monopoly by good service and low prices, then exploits the monopoly by poor service and high prices, I'd agree with P. Breathnach's point that any attempt by a rival to enter the market can be met by the company using a monopoly-acquired war chest to undercut the competition while they are small. The only people who can realistically expect to take on such an entrenched monopoly are companies that are extremely rich, and which can survive the initial market entry phase. However, to survive that phase will involve running at a loss for an extended period of time, something which then requires monopoly-level profits to compensate for afterwards. The most likely outcomes are, therefore, a change of monopolist, defeat of the challenger, or a cartel with an agreed division of the spoils. None of those outcomes is beneficial to the consumer except for the brief period of market entry - and in the absence of competition there is absolutely no incentive whatsoever to provide anything above piss-take levels of service and price.

If we take, on the other hand, the example of a state monopoly paid for by taxes, where the organisation again responds to the monopoly status by offering poor service and high prices. Clearly there will be no 'market challenger', and the privileged workers and their families form a voting interest that will oppose change - and will likely be supported out of sympathy and self-interest by other similar workers. However, the workers are unlikely to ever constitute the majority of the voting population (and if they do, then they are the electorate they are 'exploiting'), so even while the government panders to these workers as a voting bloc, they must do so with one eye on the rest of the electorate, and will lose votes by allowing services to degenerate past certain levels. It is always possible for a 'reformist candidate' to shake up the cartel between government and state monopoly - something, indeed, we have seen repeatedly.

Now that suggests to me that the first of these two cases is worse for customers and harder to break (without regulation, that is). In the latter case there is always some element of balance provided by the votes of the non-monopoly electorate, and always the possibility of reform for the sake of reform. The only time when there is virtually no possibility of reform is when there are no votes in reform, which comes about when the voting public are disinclined to pay attention to public services. In the case of Ireland, that happened during the boom years - people dug their hands in their pockets to buy a more expensive private service if they found the public service inefficient, and didn't mind the government 'improving' the public services simply by giving them more money without any reform. Of course, when the money turned back into acorns and oak leaves, we found we had a bit of a problem, but I don't think replacing public monopolies with market monopolies is a solution to that problem.

cordially,
Scofflaw

P. Breathnach

Eliot Rosewater wrote: »

... The "libertarian lobby" has attempted to explain some of these things, but many of them (such as the provision of private charity) are regularly dismissed out of hand: if you can't cause something directly then its effect is ignored. I would try to explain some of these things, but I'd be only wasting my time and boards.ie's electrons, I think.

Of course private charity as a means of dealing with deprivation is dismissed out of hand. All we need to do is reflect briefly on human nature, and look at present or past societies with great income inequality, and we can see that charity doesn't go anywhere near solving the human problems.

No; why would you assume such a thing?

Because you do not point to hard evidence.

As someone studying a maths degree I take an interest in how maths is taught at all levels. The second level Irish maths course is in a continual state of being "dumbed down". This recent Project Maths programme is a part of this, as is the new and expansive "log tables". Everyone doing the Leaving Cert knows that the further back you go the harder the papers get. I'm quite open to the possibility that this trend is restricted to maths, but I'm assuming that it isn't.

When I studied maths (long before you were born, I suppose) people said the same sort of thing. That sort of claim is made everywhere, about just about every subject taught in schools. And the claimed rate of decline is precipitate. It's always unmeasured, unevidenced. Were even the more moderate claims true, then my Primary Certificate would be worth more than your Leaving Certificate (history note: the Primary Certificate was an examination taken at the end of Primary schooling; vanity note: I got 100% in maths -- it's been downhill ever since).

There's also the issue of business leaders expressing doubt in the ability of our graduates,

It was always thus, and always will be.

One way to improve the quality of our graduates would be to revert to the norms of my university days, when only about 4% of the population got the chance of undertaking degree studies. Relatively few of that 4% were outside the top tenth or so of their age cohort.

Similarly, we could improve average standards in secondary schools by excluding more than half of the population from them (which I think was the case when I was in secondary education, but I don't have, nor can I find, data).

the recent controversy regarding grade inflation (an international problem, admittedly),

Grade inflation proves nothing about student standards. It's no more significant than measuring temperature in Celsius rather than Fahrenheit.

and that fact that Ireland has either 0 or 1 university in the top 200 in the world, depending on which list you use.

Or 2. How many should we have, in proportion to our population and economic development? I think 1 or 2 seems about right.

But coming from a libertarian, these claims are immediately suspect, I suppose.

Claims backed by evidence stand, no matter who states them.

Scofflaw

Eliot Rosewater wrote:

... The "libertarian lobby" has attempted to explain some of these things, but many of them (such as the provision of private charity) are regularly dismissed out of hand: if you can't cause something directly then its effect is ignored. I would try to explain some of these things, but I'd be only wasting my time and boards.ie's electrons, I think.

Claims regarding the replacement of welfare by private charity are dismissed out of hand because most people are aware of some well-studied problems, which can be briefly summarised as "charity is too under-funded, too localized, too mismatched and too ill-suited to replace welfare". For a longer version see here. The gist of it is that charitable donations would need to be multiples of current levels - which isn't a given - that rich communities would have rich charities and poor communities poor charities - after all, charity begins at home - and that charities usually have other aims than charity.

Further, most people are pretty repelled by the idea of dependence on charity, which is not unreasonable, since charity is optional, and gives the whip hand to the dispenser of charity, be that a private individual, an institution, or a community - charity can be, and regularly has been, used to enforce the wishes of the dispenser against the recipients.

Most people prefer that they pay their taxes when employed, and are therefore entitled to their dole when they are unemployed (unless, like me, you're self-employed). The Department of Welfare (whatever its current name) may require that you are looking for work, but they don't require that you are God-fearing, or sober, or grateful.

cordially,
Scofflaw

Permabear

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BluePlanet

Isn't this an example of libertarian encroachment into the minds of our young people?
They have choices and are choosing to not pursue maths.

Maybe we should use the levers of Government to force our children into pursuing maths but that doesn't sound like a libertarian position.

Insofar as the other criticism of unqualified teachers, that sounds like poor Regulation.

Private schools probably are no better in this respect, with excepting their discriminatory enrollment policy where they get to cherry-pick only the bright students.

Permabear

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Permabear

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BluePlanet

I just don't see this desire for maths that you presume exists.

Rather I see bored teenagers whom expect teachers to be "entertainers", parents that expect schools to socialise their kids.

When darling little Johnnie comes home with a D, it's automatically the school's fault, not the fact that little Johnnie spent his day secretly texting mates instead of doing assigned tasks.

Permabear

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BluePlanet

In other words, you see parents conditioned by government social programmes their high wages and lavish lifestyles that they are disconnected from the social well-being of their children.

donegalfella wrote: »

If Little Johnnie is texting on his mobile phone instead of doing his assignments, then yes, that actually is the school's problem. But why should Miss Smith get overly exercised about Johnnie? She's in a union. She gets paid the same regardless of whether Johnnie gets an A or a D.

Actually yes it is the schools responsibilty, afterall mobile phones are not allowed in classrooms. However the consequences of taking action to prevent and disipline children has become a political football - Schools/Dept of Education/Media/Parents, all fighting separate corners.
Some parents it turns out actually want their kids to have mobiles on thier persons at all times, should they need to get in contact.

Why should you care donegalfella, if little Jonnie is texting or not?
Surely by engaging these activities instead of studying he is exercising a freedom that fits nicely into Libertarian thinking.

Anonymous1987

silverharp wrote: »

have you not answered your own question? the 200lb gorilla gets fat, new firms come in and undercut or offer a premium service compared to what is available. its also difficult to see how one could get a monopoly in airlines under a liberal regime? Imagine if in this example Ryanair tried to "abuse" its position and charge €500 to fly to London (like aerlingus in the 1970's ) other businesses would come together and setup a new airport if necessary.
I must say I'd prefer to take my chances with a market solution compared to knowing I am going to be fleeced or treated badly having to use a state run airline or airport which will charge more or provide a poorer service 99% of the time.

The European Commission has prohibited, on the basis of the EU Merger Regulation, the proposed takeover by Ryanair of Aer Lingus. The acquisition would have combined the two leading airlines operating from Ireland which currently compete vigorously against each other. The Commission concluded that the merger would have harmed consumers by removing this competition and creating a monopoly or a dominant position on 35 routes operated by both parties. This would have reduced choice and, most likely, led to higher prices for more than 14 million EU passengers using these routes to and from Ireland each year. The Commission's investigation and market test of remedies offered by Ryanair demonstrated that these remedies were inadequate to remove the competition concerns. In particular the limited number of airport "slots" offered was not likely to lead to competition sufficient to replace the competitive pressure currently exercised by each airline on the other. The Commission therefore concluded that the concentration would significantly impede effective competition within the European Economic Area (EEA) or a substantial part of it.

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/893
Setting up a new airport would involve a substantial entry cost would it not? These barriers to entry can help to maintain monopoly positions. Monopolies may collapse eventually however in the mean time businesses and consumers may face high prices, poor quality of service and limited choice.

Permabear

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Scofflaw

BluePlanet wrote: »

I just don't see this desire for maths that you presume exists.

Rather I see bored teenagers whom expect teachers to be "entertainers", parents that expect schools to socialise their kids.

When darling little Johnnie comes home with a D, it's automatically the school's fault, not the fact that little Johnnie spent his day secretly texting mates instead of doing assigned tasks.

Nor do I see government intervention crushing the ability to do maths in, say, Singapore or Japan.

Once again the libertarian technique is to ignore all other possible explanations and variables, and come to the answer that government intervention is always the problem.

cordially,
Scofflaw

BluePlanet

donegalfella wrote: »

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I'm sorry to report that your assumption is mistaken.
Little Johnie and his friends have parents that are loaded. They are too busy with their own lives and careers to pay much attention to their kids.
So they are dumped on the school who's duty it is to look after them like it's a creche.

But as a Libertarian why are not not celebrating all the little Johnnies about the country? They make Libertarian decisions to not pay attention at evil State Mandated schools. In class he's quietly texting his mates, something that is not disrupting the other students so is not infringing on anybody's rights. If he fails math, it is merely a consequence of his own choices. That freedom to make choices is sacrosanct in Libertarian society.

The school is a Statist prision, but his own mind while daydreaming, remains free.
Failing maths too, is another freedom. The freedom to fail, it's the bedrock of Libertarianism.
In fact if all little Johnnies fail math everywhere, it would be the complete destruction of Statism. Math has no special importance to Libertarians, placing it on a pedestal has the appearance of Statist mandates and "building a knowledge economy" - a Statist dictat. Failing maths would be the rejection of conventional education and testing, it's a Libertarian dream.

Infact the author of whom you are so quick to quote is a proponent of Unschooling - allowing children to learn through their natural life experiences, including child directed play, game play, household responsibilities, work experience and social interaction, rather than through a more traditional school curriculum. Unschooling encourages exploration of activities led by the children themselves, facilitated by the adults. Unschooling differs from conventional schooling principally in the thesis that standard curricula and conventional grading methods, as well as other features of traditional schooling, are counterproductive to the goal of maximizing the education of each child.

So you see, little Johnnie is not a failure at all, he's only displaying a glimmer of that natural Libertariansim in all humans. It is truely the State that is failing Johnnie, first by shouldering the responsibility of providing an education, then by failing to tighten the screws enough to put manners on him (stop him from texting, confiscate his phone etc).

\sarcasm

silverharp

Anonymous1987 wrote: »

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/893
Setting up a new airport would involve a substantial entry cost would it not? These barriers to entry can help to maintain monopoly positions. Monopolies may collapse eventually however in the mean time businesses and consumers may face high prices, poor quality of service and limited choice.

I was trying to imagine the worst case scenario where a dominant airline would buy out the airport or pay the airport to refuse other airlines to land there. To be honest I dont see this as even possible as in a normal market situation the airport would want a diversity of users, similar to a shopping centre. It might like an achor tenant but it wouldnt be in its interest to only have one customer. Plus the act of trying to supress competition would actually take the airline's eye of the ball.
On the flip side, even though Ryanair would like to built its own terminal, its been prevented from doing this by a state monopoly supllier of airports.

Akrasia

donegalfella wrote: »

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No I'm not. I'm merely challenging the assertion that more choice is always a better thing. There is certainly a curve there where too little choice is bad, there is a point of optimum choice and then a point where additional choices make people less happy or paralyse their ability to make a decision.

here's a good summation of the ideas involved

A classic 2000 supermarket study involving choice of exotic jams showed that although more shoppers were attracted by 24 varieties of jams in one stand, only 3% of them bought any of the jams displayed. On the other hand, 30% of the shoppers who stopped by the stand that offered only 6 varieties of jams bought some jams (Iyengar).

The same choice paralysis appears just as likely elsewhere. A recent study found that participation in 401(k) plan among employees dropped as the number of investable funds offered increases. This aversion to extensive choices is particularly puzzling when employers match at least 50% of employees' contribution. People are literally throwing money away (Jiang et al).

Apparently, too many choices can lead to decision paralysis due to information overload. The need for more information to make a good decision is simply overwhelming. Additionally, subsequent studies found that people are actually less satisfied with the choices they make if selected from a larger number of options even when the extra choice effort leads to better results. There is lingering doubt that the choice is better than the foregone alternatives (Schwartz).

http://opus1journal.org/articles/article.asp?docID=90

Macha

Akrasia wrote: »

No I'm not. I'm merely challenging the assertion that more choice is always a better thing. There is certainly a curve there where too little choice is bad, there is a point of optimum choice and then a point where additional choices make people less happy or paralyse their ability to make a decision.

This is a great short video about the paradox of choice by Barry Schwartz, a psychologist:

http://www.ted.com/talks/lang/eng/barry_schwartz_on_the_paradox_of_choice.html

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Scofflaw

donegalfella wrote: »

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I suspect he's making the point that choice is not a reason in itself.

cordially,
Scofflaw

Permabear

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Scofflaw

donegalfella wrote: »

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Fair point, but the mere existence of choice isn't really an argument for anything.

cordially,
Scofflaw

Eliot Rosewater

Scofflaw wrote: »

If we take the example of a company which establishes a monopoly by good service and low prices, then exploits the monopoly by poor service and high prices, I'd agree with P. Breathnach's point that any attempt by a rival to enter the market can be met by the company using a monopoly-acquired war chest to undercut the competition while they are small.

Thanks for the lengthy analysis. I think we were discussing airline flights. I think what you wrote depends on a firm being able to establish a monopoly. For example, Ryanair may be able to establish a monopoly on airline flights from Cork to Dublin, but airline flights aren't what really matters, more so means of traveling from Cork to Dublin. Ryanair are in constant competition with Irish Rail, private transport and buses (though not so much the latter!). Even though Irish Rail have a monopoly on train travel, they still offer €10 tickets because they are competing across the wider travel market.

Monopolies are also always competing with the alternative of nothing. Ryanair offer €10 flights, because otherwise people will spend that €10 in the local pub. It's a myth often propagated (not be you!) that monopolies or virtual monopolies can charge whatever they want, but they can't. I think this is especially true in the case of Ryanair.

It does provide food for thought though, and it would be interesting to see what sort of criteria are laid down for when to intervene in monopolies. I realize at the moment it's a lot to to with prevention rather than remedy.

Scofflaw wrote: »

However, the workers are unlikely to ever constitute the majority of the voting population (and if they do, then they are the electorate they are 'exploiting'), so even while the government panders to these workers as a voting bloc, they must do so with one eye on the rest of the electorate

Yes, but when voters go to the polls they have to vote on a wide variety of issues. So even though cutting HSE staff's pay would be preferred by a majority, those preferences will only be one component in the voting decision. On the other hand, when HSE staff go to the polls their pay will be the sole issue, hence the net vote loss. In other words, some sectors of the electorate weigh policies different, and so it's probably better so see it in terms of these weights.

Scofflaw wrote: »

I don't think replacing public monopolies with market monopolies is a solution to that problem.

Agreed. However the alternative to the government's monopoly on education isn't a private monopoly at all: the alternative is wider choice.

Scofflaw wrote: »

For a longer version see here.

I read that; thanks very much again! I don't disagree with public charity ideally, but my central problem is how easily it turns from "let's help these genuinely needy people" to "who's the next group of people whos votes we can get". I think it's too bloated in Ireland. It's also a primarily one way system. Despite the fact that the cost of living is going down, cutting the OAP is still out of the question.

I think the best kind of welfare is that which provides direct opportunity, such as free education. The problem with a thing like child benefit is that it party accentuates the problem it's designed to solve by incentivizing having children.

Macha

donegalfella wrote: »

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I'd say personality also comes into it. I tend to research in great detail every purchase & option from which hotel to book to which is the best mascara. But I can imagine people who aren't so bothered or who aren't as comfortable using the internet would feel differently.

There's an example given in a good book called 'Nudge' where some economists are sitting around a friend's living room, eating crisps. They're over for a dinner party & waiting for dinner to be served. One of them asks for the bowls of crisps to be taken away before they ruin their appetites and being nerdy economists, they all start talking about how they could possibly want this to be so because surely maximising choice is the best way to make them happy.

Eliot Rosewater

Scofflaw wrote: »

Nor do I see government intervention crushing the ability to do maths in, say, Singapore or Japan.

I think that's the equivalent of me saying "Look, here's one place where a monopoly isn't acting the maggot, hence your previous analysis is wrong".

I've tried to argue against the public monopolies on the basis of public choice theory, and I've tried to describe why the system as a system doesn't create the best outcomes for society.

Permabear

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Macha

donegalfella wrote: »

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Yes at it's fine when it comes to holidays but what about pensions and mortgages etc? I think the government should work to oblige companies to minimise the search costs involved. Because companies sure won't do it by themselves.

donegalfella wrote: »

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Yes but even though they wanted the future reward more, they weren't able to stop themselves from eating the crisps! Humans have weaknesses and failings and not being able to stop eating a bowl of crisps placed in front of them is one of them. And therefore they had to have the bowl of crisps removed, thus reducing their options.

silverharp

taconnol wrote: »

Yes at it's fine when it comes to holidays but what about pensions and mortgages etc? I think the government should work to oblige companies to minimise the search costs involved. Because companies sure won't do it by themselves.

Well here is another example buying a car. You could legislate that there should only be 10 models and 5 colours , sure who'd want any more choice then that? On the flip side I enjoy the choice as a consumer and when buying a car its down to buy a couple of car rating magazines. I make an informed choice. As regards financial products I see no difference. It is possible to buy good information and to be honest anyone commiting 100K to 500K on a particular product ought to do their own due dilligence and buy in some help if needed

taconnol wrote: »

Yes but even though they wanted the future reward more, they weren't able to stop themselves from eating the crisps! Humans have weaknesses and failings and not being able to stop eating a bowl of crisps placed in front of them is one of them. And therefore they had to have the bowl of crisps removed, thus reducing their options.

the problem is you reduce the learning experience. I'd prefer to have made the mistakes I have made along the way and learn as I go then to have most hazards taken out of my path. Plus in many situations the choice is not so clear or the legislation is being used to cover up a more fundamental legislative problem or policy.

Macha

silverharp wrote: »

Well here is another example buying a car. You could legislate that there should only be 10 models and 5 colours , sure who'd want any more choice then that? On the flip side I enjoy the choice as a consumer and when buying a car its down to buy a couple of car rating magazines. I make an informed choice. As regards financial products I see no difference. It is possible to buy good information and to be honest anyone commiting 100K to 500K on a particular product ought to do their own due dilligence and buy in some help if needed

That depends on the quality of information available, which is why I said that I think the government has a role in reducing the search cost.

silverharp wrote: »

the problem is you reduce the learning experience. I'd prefer to have made the mistakes I have made along the way and learn as I go then to have most hazards taken out of my path. Plus in many situations the choice is so clear or the legislation is being used to cover up a more fundamental legislative problem or policy.

It's not like none of the economists in question had never been in that situation before, so the idea of a learning experience is a moot one. The point was that they knew what the consequences of them choosing to eat the whole bowl of crisps was but they weren't able to stop themselves. This is called "being human".

silverharp

taconnol wrote: »

That depends on the quality of information available, which is why I said that I think the government has a role in reducing the search cost.


It's not like none of the economists in question had never been in that situation before, so the idea of a learning experience is a moot one. The point was that they knew what the consequences of them choosing to eat the whole bowl of crisps was but they weren't able to stop themselves. This is called "being human".

The problem is that a government regulation to standardise products would stiffle innovation and or give a regulatory advantage to larger firms with all the usual problems that causes, regulation capture etc.

as for the crisps example its set in a very limited context. There are no regulation costs, there will not be corruption to the the bowl back on the table, there will not be a black market in crisps and the host is unlikey to produce a main meal with a lower utility then the crisps. The real world gets very muddy very quickly, tax breaks to build hotels? tax breaks for ethanol or even pensions? they are all government nudges but of dubious benefit and or prone to unintended consequences

Macha

silverharp wrote: »

The problem is that a government regulation to standardise products would stiffle innovation and or give a regulatory advantage to larger firms with all the usual problems that causes, regulation capture etc.

I didn't say anything about standardising products. I'm talking about standardising information about products.

silverharp wrote: »

as for the crisps example its set in a very limited context. There are no regulation costs, there will not be corruption to the the bowl back on the table, there will not be a black market in crisps and the host is unlikey to produce a main meal with a lower utility then the crisps. The real world gets very muddy very quickly, tax breaks to build hotels? tax breaks for ethanol or even pensions? they are all government nudges but of dubious benefit and or prone to unintended consequences

Erm, I (and the book) was just trying to demonstrate the concept that limitless choice is not always the most desirable scenario because humans are not flawless.

Permabear

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Macha

donegalfella wrote: »

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Argh no I have not once said that they should reduce the number of products on offer. I have said, now for the third time, that the government should minimise the search cost involved. I'm talking about any complex product, not just financial products.

donegalfella wrote: »

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The paradox of choice, as Barry Schwartz describes it, is the phenomenon of how too much choice can be paralysing, disappointing and ultimately lead to poor decision-making.

Here, I'm talking about basic human weaknesses, in this specific example, I'm talking about a bowl of crisps. Seriously guys, this isn't that hard to understand! The guys at the dinner party can't help themselves and keep eating the crisps, even though they don't want to ruin their appetites. So they ask their host to remove the bowl of crisps. What does this prove? That humans are not robots and that sometimes having too much choice is not what humans want, nor is it what's best for them in the long run.

Now the book in question does not advocate removing choice as such, but rather looks at liberal paternalism. But the point they are making above is still a valid one.

HavingCrack

I think a lot of the Libertarianism thats appearing online is from posters and bloggers who have become economically libertarian but are socially conservative eg still anti gay marriage, anti drugs etc. which are the opposite of a true Libertarian's views. Basically they want the freedom to do whatever they want as regards the economy but also want to stop those adults who want to smoke a joint as it doesn't fit with the social views.

Permabear

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Scofflaw

Eliot Rosewater wrote: »

I think that's the equivalent of me saying "Look, here's one place where a monopoly isn't acting the maggot, hence your previous analysis is wrong".

That's true, but on the other hand I was specifically comparing bad monopolies on a government vs private basis there, rather than arguing that all monopolies are necessarily bad - whereas it seems to me that part of the libertarian position is that government intervention is always harmful? Possibly that's just some libertarians, though.

cordially,
Scofflaw

Permabear

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johnnyskeleton

Scofflaw wrote: »

Nor do I see government intervention crushing the ability to do maths in, say, Singapore or Japan.

Once again the libertarian technique is to ignore all other possible explanations and variables, and come to the answer that government intervention is always the problem.

cordially,
Scofflaw

+1

Also, it seems that libertarianism is a very modern phenomenon in Ireland, despite being around for a long time. Presumably it is a product of people who have become successful in business and are currently paying high taxes. But, of course, they most likely benefitted from state subsidised education. Even if they didn't directly benefit from it, the people they employ to make money on their behalf probably did. At the very least, they must surely have benefitted from the stable democratic law abiding society which allows business to be conducted.

So not only does the libertarian view seem to automatically blame government for any perceived problem, it also ignores the fact that to get to the point where you can argue for libertarianism, you have to have lived in a society with medium-high levels of government intervention.

johnnyskeleton

donegalfella wrote: »

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But to whose definition of freedom? All very fine in theory, but at what point do you say "no, that's too free and is unfairly inhibiting the freedom of others, that should be prohibited?"

donegalfella

donegalfella wrote: »

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Am, yes...if the state deems them of no value to society, and does not approve of them, then they should not be on the market...although, when you start looking at a lot of financial products that way, they all start looking like that..you'd rather financial institutions were free to rip off customers systematically, rather than have the government restrict certain products?

HavingCrack

donegalfella wrote: »

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No I agree with you that no libertarian would believe the government shoudl stop gays from marrying but my point was that theres a significant proportion of conservatives masqerading as libertarians online especially on American websites. I amn't arguing that their viewpoint is correct just merely that this may account for the increase in libertarianism online if that makes sense

HavingCrack

johnnyskeleton wrote: »

But to whose definition of freedom? All very fine in theory, but at what point do you say "no, that's too free and is unfairly inhibiting the freedom of others, that should be prohibited?"

Ah the age old question of anarchism!

Macha

donegalfella wrote: »

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Yes, I know the paradox of choice is a different concept. But I was also trying to point out some other issues with total freedom of choice.

donegalfella wrote: »

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Yeah, I really liked it. I think I'll have to go back and read it again because they use a few complicated financial instruments (eg pensions/healthcare) to explain their argument & I dont' have a background in economics so I struggled a bit. I would definitely recommend it - it was an Economist book of the year for 2008

Akrasia

Scofflaw wrote: »

I suspect he's making the point that choice is not a reason in itself.

cordially,
Scofflaw

Exactly. There are a wide variety of situations where people don't necessarily want choice. We don't particularly want the 'choice' between two competing world darts championships, most consumers would prefer to have the best darts players competing against each other for one title instead (same for boxing)

I don't want a choice of bus companies that don't recognise each other's tickets, to take me to work, I want one good public transport network.

I don't want to be an employer and have to sift through dozens of different accrediting agencies for private universities in order to know which degrees and certificates are worthwhile, and which are worse than toilet paper.

As a student, I want to know that when I do a course, it will be recognised as legitimate course around the world and into the future.

I don't want a choice of ambulances to take me to a choice of hospitals if there is an emergency situation. I would much prefer one good service that has universal coverage

I don't want a choice of sewage companies, or street lighting companies, or dog wardens, or I don't want to go to a taxi rank and have 25 cars lined up, none of which I can trust as having minimum standards of competency or any come back if they rip me off.

Then there is the fact that people can not possibly have knowledge about the reputation of dozens of independent providers of services, so they're probably going to go with brands they recognise, so the dominent provider might very well be 'ACME sewage, ACME Taxis ACME schools etc (especially if you get double reward points for using multiple services.)

There may be competition in the market place and choices that people can make, but too much choice and no confidence in the quality of those choices may very lead people to stick to a brand they know thus creating monopolies of enormous power. (especially with no anti-trust regulations)

Permabear

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