the fringe?

I've been wondering lately about far we can go with our limited government philosophy. What are the limits? I have known libertarians before of the more colorful stripe who believe in absolutely no government, but I think most (all?) of us think at least some government is a good thing. Just how far do we go?

-Can we privatize transportation and city-planning completely?

-Can we privatize the legal system?

-Can we privatize the police and military?

-Do we need borders?

-Do we need patents? (I really interested in this one, seems like it should be a divisive issue for us, since it seems so necessary but is after all a gov't protected monopoly.)

-Do people have a right to healthcare, food, housing, employment, etc? Why not? (Just throwing this out there because I keep hearing these arguments and do not always feel well-equipped to deal with them.)

-Do we need government to tax people who produce negative externalities or at least to establish the arrangement of property rights that comes closest to producing the efficient outcome? (Businesses have right to pollute vs. residents have right to be free of pollution.)

As I see it, government as a voluntary agreement between people in a country (a social contract) exists for two reasons.

First, it exists to establish a unique assignment of property rights and to be delegated the exclusive right to physically enforce those rights. That is, to make sure property rights don't overlap, so that people don't fight (physically) over resources. This reduces the uncertainty about property rights in everyday life.

Second, it exists to provide a way of funding pure public goods and goods that have really large organizational costs associated with them (usually non-pure public goods).



To answer your specific questions:

Transportation and City Planning: roads and stuff have large organizational costs associated with them. For example, it's very organizationally costly to negotiate with all property owners affected by the need for a new road. This is why we have eminent domain as a function of government. So no, a lot of this stuff can't be privatized.

The legal system: No, you can't privatize the legal system because it would create non-unique assignment of property rights.

Police and Military: Military protection cannot be privatized because it is a pure public good. If it were privatized, it would go unfunded. Police cannot be privatized because 1) a large part of the service police provide is a pure public good 2) because the police force is intimately tied up with the legal system, which must remain governmental.
I'm not totally satisfied with my reasoning on why police must be governmental. I have to think about this.

Borders: borders are good only because eliminating them rapidly would destroy a lot of organization information in society and pretty much destroy all economies. I'm not sure if they are a public good or not. I'm not sure what I think about them in general, but they clearly have extreme current practical use.

Patents: I too found this troubling for a while because, clearly 'intellectual property' is not a scarce resource, so you can't really have ownership over it. However, government establishes pseudo-property rights over information and ideas (copyrights and patents) because it's a very effective way to fund those pure public goods.

Other rights: no, I don't think people have any of those rights. Unfortunately, there's no real reason why they don't have those rights, rights are only created by axiom. The only thing you can do is make practical/emotional arguments. A practical argument: those rights don't work; they don't lead to economic behavior. An emotional argument: those rights are positive rights, and positive rights don't seem just; they let you demand that other people provide you with something instead of just demanding that other people don't do something to you.
The natural rights that I assume are the right to 'use-and-exclude' property and the right to make binding agreements with other people.

Externalities: Most negative externalities are due to bad design of property rights or non-unique property rights. For example: air pollution, the atmosphere as a disposal for effluents is a scarce resource, but unique property rights are not generally established over it, so of course it is poorly used. As an aside: it is my assertion that the atmosphere as a resource is corporately owned by everyone who has direct access to it, meaning that the residents own it. If there WERE some negative externality that couldn't have property rights defined around it, it would fall to the government to find a way to achieve efficient behavior.

While there is no social contract government in existence today, a lot of countries operate somewhat similarly to how a social contract government would operate.

Can positive rights be readily sorted out from other rights? For example, I pay taxes to fund the military and police that protect everyone's property rights. I am being forced to help protect other people's property. Would not every right to a public service funded by coercive taxation qualify as a positive right?

This is the main problem I'm having right now with calling myself a libertarian. It's not that I expect the rights we support to come out of nothing and be self-evident. I'm not sure anything is self-evident, except logic. But I'd really like there to be some easy way of separating out the "good" rights from the "bad" rights. Is the small set of functions to which we as a group generally believe government should be limited -- property rights, contracts, defense, law -- merely arbitrary? Could we take some functions away or add some in without the set becoming inconsistent with some underlying political philosophy? What then are our reasons for supporting just these functions? Economic efficiency?

With regard to transportation, I'm keenly interested in just how far we could go. You mention prohibitive organizational (transaction) costs. Well, at what point are the costs too large? Certainly, you have to admit privatizing many elements of the transportation system would be pretty simple. Buses, trains, all types of mass transit, taxis, ferries, etc. Seems to me bridges and major highways wouldn't be too bad either. I can see how it gets more complicated with smaller roads, where entry and exit are not so easily managed. Although I wonder if it wouldn't be possible to privatize roads within residential areas where almost all traffic is due to the people who live there. There could be a neigborhood road company to whom homeowners would pay some kind of fee. I'm especially excited to think of what we would see if freeways were privatized and mass transit and taxis privatized and deregulated. Perhaps with commuters facing the cost of driving during rush hour, we would see companies running vans around neighborhoods picking them up. There would probably be fewer buses, but perhaps they would be more punctual. And no more bickering back and forth about roads vs. transit. Let people decided through the most democratic of institutions, the market. If we must reduce CO2 emissions, we can use a tax rather than trying to force people to radically alter their lifestyles. Of course, I realize that UW students certainly don't want to hear anything about transportation privatization, since our transportation is so subsidized through the U-pass system. Although, even with my u-pass, oddly I find myself driving now almost everywhere, even downtown. I use the bus almost strictly for commuting to school, which is very practical given the parking situation.

With regard to city planning, that's another area I'd love to explore. I've read a little about different economic models of the geography of cities. I've heard that Houston has less zoning than most cities -- might have to check that out sometime, take a road trip or something. I actually spoke to someone recently who grew up there and knew about the the lax zoning. He didn't seem terribly enthusiastic about it, mentioning sprawl -- although I think the sprawl shouldn't be blamed on lack of zoning or growth management but rather on the lack of transportation privatization to make suburbanites responsible for the costs of road infrastructure and congestion. With regard to power, water, etc., though the welfare effects are debated, it is well known that it is practical to privatize virtually all utilities. One does wonder, though: what would a totally private city look like?

Although I may agree with you the police should remain public, I'm not sure that they're a public good. The military protects the borders that encompass the whole nation and deals with unusual threats, invading armies and such. Even with double the population, the US wouldn't need much more of a military to defend its borders (if only that's all our military were doing). The police, on the other hand, provide a much more practical every day type of service for a particular small geographic area. The number of police you need for an area is pretty well related to the number of people living there. If a bunch more people move in without a change in the size of the police force, you would expect the quality of service to fall, whereas others' consumption of a public good is not supposed to interfere with your enjoyment of it. I could imagine a lot of private provision of police services, perhaps with a fair amount of competition. But the system would need to be backed with regulation, the courts, and ultimately the military. Can't have someone hiring goons to go trash their competitor's business.

I don't know, lots to discuss. Little late now, time to sleep.

I had this problem for a while too; it stems from not recognizing that government has to be a voluntary contract (I'm talking about how things should be not how they are). People get together and voluntarily form a government because it makes a TON of sense to use it as a way to significantly reduce the organizational costs associated with some goods (mostly non-pure public goods). Now, to have really moral government, you have to have the right to leave the social contract because most people have not actively agreed to participate. Not that very many people would though, it would be very much to their detriment since they would lose the right to use roads and what not.
In a social contract government the question ceases to be what the government has a RIGHT to do, and it becomes what the government SHOULD do, which is good because the fact of the mater is that you can't morally force someone else to do anything, even to protect your rights. Now, there aren't any governments that exist today that are based on a social contract like this, but a few governments do sort of act like they do, the USA, for example, but it makes practical sense to treat those governments that do act sort of like this as if they were based on a social contract and try to change them so that they do what a government SHOULD do, so that we don’t have to have a revolution .

The main reason why roads, railways and a lot of utilities are public is that the creation of distribution systems has really high organizational costs associated with them because it's super expensive to individually bargain with all affected parties. So while the actual transportation on roads and actual production of utilities might be effectively privatized, in most cases distribution cannot. For example, it would be impossible to privatize the sewer system with currently available technology, because the creation and maintainance of the system is very organizationally heavy because you have to go through or buy other people's property.

As for the police: Like I said, I'm not totally comfortable with my reasoning here. Police protection seems to be a rival but non-excludable good, which is rather rare (I can't think of any others; can you?). I'm not sure what the role of the government should be with respect to rival, non excludable, low organizational cost goods should be. One of the reasons you can't really have private police is because one of the main functions of government is to be delegated most of the right to use force (that is, the right to enforce your other rights) and private police forces change that around. I have to think about this more.

I acknowledge it seems a bit fantastic to imagine privatizing all roads, but I think you're being a bit too pessimistic here. Maybe surface streets won't work (although there is the private city idea that came up last meeting). But freeways, where entry and exit onto the road is very restricted, don't seem to pose much of a challenge at all. The only issue I can see is the difficulty in obtaining the land for a freeway, if the area is already well populated. Just think, no more rush hour traffic.

I'm puzzled that your assertion that railways and utilities wouldn't under private ownership. What about the private companies that built the railways back in the 19th century? What insurmountable organizational costs are there in the case of railways? My understanding of the difficulties with, say, surface streets is that it would be impractical for a private owner to exclude others from the road without making the road incredibly expensive for customers to use, e.g. setting up road blocks to collect tolls every quarter mile, which would be incredibly wasteful timewise. But exclusion is much less costly with things like railroads and freeways.

As to utilities, I have to disagree with you. It is far from impossible to privatize sewers. It might be impossible for there to be competition among sewer providers in a single city, but a monopoly could certainly operate and maintain the system. I think this is already being done in many places. Same goes for water and electricity. Competition may not be possible, but privatization certainly is. And that may be better than the government option.

Actually, at my internship I had do a little research on Sound Transit. Jeese, what a disaster. All mass transit ought to be private, but at least buses are fairly efficient. Light and commuter rail just really don't make sense given our population density. Besides that, Sound Transit has done a horrible job managing its projects, rail in particular. And speaking of buses, did you know it's illegal to run buses as a private individual? Argh, damn government monopoly.

A really cool group that I want to learn more about is the Institute for Justice, a libertarian law firm. It has a Washington chapter. Link:

http://www.ij.org/

Also, I was just reading about how Washington University (not UW) is trying to build up its econ department and discovered a couple of academics, David Levine and Michele Baldrin, who are totally against intellectual property. They and some others have a blog:

http://www.againstmonopoly.org/

I did not mean to say that I think railways cannot be private. They obviously can be, since that's how they came about in the first place (though government had a big hand in it initially handing out property left and right). With regards to utilities and highways, I don't know of any case where they have been successfully private, and I think that is a fairly strong argument that they can't be efficiently private.
I think we are down to arguing just about what works and what doesn't, so I will leave this discussion alone.

I do have an interesting note, though. For a while I had assumed that a system of rights had to be an axiom, which was troubling to me because people can have different right-axioms and that would lead to a lot of conflict, but I recently found a paper by Hans Hoppe which derives the private property ethic from a priori knowlege. You can read the paper here. I found the paper pretty convincing, but I need some time to mull it over.

the hell? Educate yourself, John:

http://en.wikipedia.org/wiki/Private_highway
http://www.scu.edu/civilsocietyinstitute/a...ateHighways.pdf

Thanks for the links, Morgan.

http://rru.worldbank.org/PapersLinks/Impac...-Privatization/

Some info on infrastructure privatization in Latin America.