A few somewhat rumbling thougths on the role of the government.

[ja-va.livejournal.com]

There is much debate in the US about role of government and whether or not we need it at all in the first place. Some people advocate that we do not, or at least as little as possible, especially in the economic sector, since government only disrupts the markets and markets will take care of themselves without the government interruption much better than with it.

There are few things these people should remember, though.



First, and most importantly, businesses are not interested in welfare of people or of the state. Business exists for one reason and one reason only - profit. It is neither good or bad in itself, but it is a fact of life. Ideally, and this is the most important point, ideally business IS NOT INTERESTED IN COMPETITION. Competition gets in a way of profit making. Ideally any serious business wants to MONOPOLIZE the market, and then set the price at a maximum, i.e. at a point of production where marginal revenue is equal to marginal cost. This creates dead weight loss to the society and is not efficient, never mind the fact that once market is monopolized there is no need for further improvement of product or any other progress in production - just give people whatever, they have no choice but to swallow it.

Now, without the government monopolization is inevitable. Even Adam Smith with his pin factory proved that point- economies of scale kick in, the more you produce the cheaper the production, the easier it is to kill competition and monopolize the market. At best then we can hope for oligopoly, and pray that there will not be a collusion. But hey, Adam Smith mentioned that, too:

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

Adam Smith,
An Inquiry into the Nature and Causes of the Wealth of Nations

But the danger of monopolization is only one of the evils government supervision is intended to prevent. Much bigger problem concerns what is known in economics as public goods.
Public goods are goods that can not or should not be made private. Most of them are free- like fresh air, water, green trees and blue sky. Some of them are not free but the use of them can not be excluded- public defense, police protection, medical care.
How, you might say, medical care? But we can exclude people from medical care, just do not provide aid!
Well, if you say that you will ignore a few important things. First, health of the nation is important for everyone, sick people do not achieve much. Second, excluding some people from medical care will (not might, but will for sure) increase incidence of communicable diseases. Finally, it is inhumane and goes directly against the oath medical professional take when admitted to practice. You may think what you want, anyway, but free medical care IS PROVIDED IN THIS COUNTRY EVERY DAY AND IN EVERY HOSPITAL WHETHER YOU LIKE IT OR NOT- hospitals do not turn away people who have no insurance and can not pay, they just can not do it, and as a result anyone who makes it to the emergency room gets medical care. Of course it would be CHEAPER to treat them before they become so sick they need urgent care, but for that some sort of GOVERNMENT action is needed.

And that brings me to the last subject I want to address here- the subject of government.
It became a norm among some people in this country to ridicule government, speak of it as being unnecessary, evil and to demand minimization of the government's role. Few things seem to be ignored by people who say that.

What is government? Where does it come from? How did it all began?
You do not need to (although may, if you choose) read Plato or Aristotle on the subject, but it would not be too hard to understand the idea even for the simple folks. Government was ALWAYS formed by the people and for the people. It is the people who form it. The main focus of forming the government by the people from the ancient times until most recent present always was an IMPROVEMENT upon the difficulties faced by the living of large numbers of them together, difficulties naturally arising in any society and at any time. Public goods problem is just one of these things.
At some point it was decided that the best way to govern is just to have one person at the head of the state, a monarchy. After all, this is how prehistoric tribes were governed. First leaders were either elected or emerged by natural order of things, but this was not always an easy and painless process, and as a result hereditary order appeared instead. At some point people began to realize that hereditary monarchy is an open door to all sorts of abuse of power by the leaders (Luis XIV in France is a good example) and beheaded obnoxious kings, replacing them by the parliamentary order - democracy. Democracy, as Sir Winston Churchill pointed out, is "not the ideal way of governing the state, but the best known to us so far".
But the important thing to remember is that governments always existed and, in essence, are nothing else than an organization of people meant to help them live together. Once certain type of the government looses the trust of the people this model is gone, replaced by another model.
And here is the real question - DO AMERICANS THINK THAT THE WAY THEY HAVE BEEN GOVERNED IS NO LONGER ACCEPTABLE? Because if it is the case, then the problem is much more serious than most people realize. It means that democratic system of government in the United States is no longer acceptable to the people, and it has to be changed or dispensed with altogether.
People do not mistrust their government because "all governments are bad", even if the think it to themselves this way. They mistrust government if they no longer believe government truly represents them. Do Americans think their government no longer represents them?

It is worth mentioning, for example, that president Barack Obama, whether you like him/his policies or not, was democratically elected by the majority of American people in a free and undisputed elections. And if some folks truly have such a big problem with him being at the head of the state than the problem is not with president Obama, but with the entire system of democratic government the way it is currently works in the United States. And that means the system is no longer valid and has to be changed. Think about that.

In some form or the other the government always existed and will always exist, at least as long as there are large enough groups of people living together on the same territory. Real question is not the necessity of the government, but the TYPE of the government. If you say that you want LESS government, what it really means is that you want A DIFFERENT FORM of government, since the current form of government no longer suites you. And then, then the Revolution is in the order of the day.

Comments

[ja-va.livejournal.com]

It's not about whether the government is good or bad
In most cases this is EXACTLY what it is about. The subject may or may not be masked with details, but it all comes down to this point.

[kinvore.livejournal.com]

And yet so many who supposedly advocate smaller government seem to love reciting platitudes that government does no good whatsoever.

[foolsguinea.livejournal.com]

I think it's entirely reasonable to assume that some proportion of the people who advocate lack of government intervention fail to remember these arguments because they have never learned them.

[politikitty.livejournal.com]

A few nitpicky observations:

While people will want to collude, their self-interest will generally make them unable to do so successfully in the medium/long term. To successfully game the market, competitors need to not only set a price, but also set their output.

While the first might be somewhat easy, the second is not. People aren't given a nice chart of how many widgets sell at fixed price of X. Making sure that each partner in crime gets an equal piece of the widget pie isn't likely. Excess capacity will exist, and once that happens, rent seeking will coerce the self-interested individual to dump his excess stock on the market rather than the sewer.

There is nothing stopping the illegal drug market from working together to form a monopolistic market force. But the truth is that they don't last long, because there's a lot to be gained by stabbing your temporary ally in the back.

That isn't to say that laws shouldn't be on the book because it will never happen. It will happen all the time, and it might take the market time to correct itself. By having laws on the books, we dissuade many people from collusion, and have the power to intervene before the market.

But that's to say that the legal realm can act faster. Not that the market can't act.

Similarly, the idea of either accepting the status quo or revolution is equally flawed. Democracy is a living organism, and the will of the people changes constantly. While people have fairly stable political views, they also reproduce and die at a fairly regular rate. Changing demographics means that what we voted on two years ago is already out of date.

Personally I think the strongest case for a smaller and more (little c) conservative government is not libertarianism, reaganism or any tea party mumbo jumbo. It's voter fatigue. While public policy/democratic theory works for any individual issue, it would be hard to get America to show up to take an individual stance on the thousands of issues that face the government today.

Yes, that's why we have representatives. But if America is having to choose a candidate based on thousands of issues, is there any proof there's a general consensus on any individual issue?

And of course there is, with public opinion. It acts as a good test to see if America is being given the democracy that they want. But currently people seem to deride it, and exclaim that politicians should not be beholden to polls. I think it's important for us to follow public opinion, and understand that there will be a point where our government is too large to effectively sort through the preferences of the people through the limited attention span of the average voter.

[ja-va.livejournal.com]

Collusion is problem of oligopoly, not monopoly. This is why oligopoly is a lesser evil, yet both are bad enough to require interruption.

Drug market is not a problem of production and/or distribution, it is a problem of physical survival. This is what "business" was like in pre-government times, and would be like had there being no government now. It is much easier to kill competition literally than metaphorically :)

I think the biggest problem is not with disagreement, it is getting much more serious than that. People do not want to pay taxes because they do not believe government can do any good with them, if that is indeed the case then the system is flawed and should be changed completely, this is a natural assumption. If you have a leader who you think is not trustworthy and is mishandling your affairs logical thing to do is to get rid of him altogether, not just "restrain him on certain issues".

[rasilio.livejournal.com]

"First, and most importantly, businesses are not interested in welfare of people or of the state. Business exists for one reason and one reason only - profit. It is neither good or bad in itself, but it is a fact of life."

Actually no.

Businesses do not exist.

They are an abstraction however they have no interests *AT ALL*. What does exist is people. Microsoft has no goals, Steve Balmer does. Apple has no goals, Steve Jobs does. Berkeshire Hathaway has no goals Warren Buffet does.

While it is true that all humans, even those in the positions of decision making authority at corporations are primarily motivated by desires for personal profit, it is also true that each of them has a very different conception of what personal profit means and none of them restrict it to the financial profit and loss statements of the corporations they lead.

"Ideally, and this is the most important point, ideally business IS NOT INTERESTED IN COMPETITION. Competition gets in a way of profit making. Ideally any serious business wants to MONOPOLIZE the market, and then set the price at a maximum, i.e. at a point of production where marginal revenue is equal to marginal cost."

No they don't. See above. They have goals and motivations as diverse as their owners/managers. Some want to build a monopoly and rake in maximum profits, others thrive on competition and want someone to compete against. Others have even higher minded goals to change the world in some way or another (for good or ill).

Further, even of this were the goal of all corporations it is irrelevant because it is impossible for them to accomplish without government intervention on their behalf. Which brings us to this...

"Now, without the government monopolization is inevitable. Even Adam Smith with his pin factory proved that point- economies of scale kick in, the more you produce the cheaper the production, the easier it is to kill competition and monopolize the market. At best then we can hope for oligopoly, and pray that there will not be a collusion. But hey, Adam Smith mentioned that, too:"

The first sentence could not be any further from the truth because it is only through government intervention that a monopoly can be maintained.

First off, the economies of scale in the pin factory reach a point of diminishing returns.

Second, so what if it is possible to build an honest to goodness monopoly in this manner it is impossible to realize any benefit through monopoly in terms to being able to impose higher than market prices or stagnate on your product improvement unless the government erects barriers preventing competition from arising. Without those governmental barriers to competition your monopoly status will only exist so long as you manage to meet your customers demands and your profit margins are not so great that you attract any competition.

Finally as for cartels, yeah I'm sorry but they are unstable and never last for long because the incentives to cheat are always too high. Cartels only work when all members agree to a division of market share and and profits then standardize prices in such a way that the desired results are achieved. The problem is that the individual incentive for every single member of the cartel is to cheat. Cut their prices by just a bit here and there to win a few extra customers and get even higher profits than they were guaranteed by the cartel. Problem is this extra profit always comes at the expense of the other cartel members who are not going to lower their prices even further in retribution and eventually the entire cartel collapses.

However even if it doesn't once again there is nothing stopping someone from outside the cartel to look at those excess profits being earned by the cartel members and opening up shop undercutting their price and stealing market share making the cartel irrelevant.

[ja-va.livejournal.com]

1. A group of people may have goals and resulting actions very different from that of any separate individual. Once people organize into a business, they become profit oriented, because this is the reason of their organization.

Apple has goals, and they are very different from the one's Steve Jobs has, such as "taking care of cancer" hardly a concern for Apple, but very much a concern for Steve Jobs :)

2. Show me a business who would like a competition that will lower its profit :)
If it exists, this existence will not last long.

it is only through government intervention that a monopoly can be maintained.
Only if its intervention is limited to providing certain set of public security, enough so that people would not shoot each other in the head for now reason.

the economies of scale in the pin factory reach a point of diminishing returns.
Not before they monopolize the market. Bigger company is always more productive than smaller one, although at some point productivity becomes restricted by the size of the market, so you can not grow bigger than the size of the market will allow and once you swallow the entire market dis economies kick in.

impossible to realize any benefit through monopoly in terms to being able to impose higher than market prices
You have to learn a few things about a monopoly. I would suggest any micro course.
Monopoly sets the profit where production equals marginal revenue equal marginal cost. Marginal revenue is, indeed, determined "by the market". But setting the production at this level creates dead weight loss, the price at this point is the best for monopoly, but not for the society as a whole, as production is kept below optimal. Once again, learn the subject before you argue about it.

As for cartels- they are unstable, but they are constantly formed, so it is simply less of an evil then monopoly but it is naive to say that they are harmless- just because someone screws you over periodically instead of all the time does not mean it is ok :)

[gunslnger.livejournal.com]

There is much debate in the US about role of government and whether or not we need it at all in the first place.

I don't see much debate on it at all, and certainly not as much as there ought to be.

Now, without the government monopolization is inevitable.

This is incorrect. Monopoly is only possible with governmental power (whoever wields it).

Your diatribe on medical care conflates too many types of medical care together and thus becomes incorrect. For example, you are correct that someone coming into a hospital with a broken leg will be treated even if they can't pay, but someone going in with cancer won't be.

It became a norm among some people in this country to ridicule government, speak of it as being unnecessary, evil and to demand minimization of the government's role. Few things seem to be ignored by people who say that.

You must be living in another country or something because that's exactly backwards to what's happened. The country started with people saying government is a necessary evil that needs to be minimized and we've come now to the point where most people think government needs to be large and everyone ignores those warning about it. Like what you're doing.

Government was ALWAYS formed by the people and for the people. It is the people who form it.

This is a perversion of the meaning the phrase. People accepted government being formed by a few because it seemed to be better initially. That's not the same as being formed by the people.

And if some folks truly have such a big problem with him being at the head of the state than the problem is not with president Obama, but with the entire system of democratic government the way it is currently works in the United States. And that means the system is no longer valid and has to be changed. Think about that.

At least you got one thing right. Except that we mainly just want the system changed back to the way it was designed to be.

And then, then the Revolution is in the order of the day.

Since the system allows for changes to the system, that's not a requirement.

[ja-va.livejournal.com]

The country started with people saying government is a necessary evil that needs to be minimized
Who and when said that?
If something is evil, it can not be necessary. It is one thing to believe that government can become evil if unchecked, it is entirely different to call it evil to begin with.

Since the system allows for changes to the system, that's not a requirement.
You are forgetting one thing- not everybody wants it changed. And so it can not be changed. It can only be completely dismantled.

[kylinrouge.livejournal.com]

This is incorrect. Monopoly is only possible with governmental power (whoever wields it).

Are we ignoring pre-21st century history now?

[raven-blue.livejournal.com]

"ideally business IS NOT INTERESTED IN COMPETITION. Competition gets in a way of profit making."

That is not really true. Competition leads to creative ways of marketting yourself or in new methods or products. These in turn lead to higher profits. Conversly a lack of competition leads to stagnation, lack of new products, lack of creativity and less public interest all of which lead to shrinking products.

Your points on the government I tend to agree with up to a point. First of all government is simply a tool by which people collectively (either willingly or not) create a system of protections in order to futher their society. So any government is by definition only as much as the people who exist within it.

This is my greatest problem with the way people complain about government (that is our government - I of course exclude dictatorial regimes from this point), as if it were some alien force under which the people have no control. Case in point. Everyone hates lobbyists, they have become political bogeymen and yet everyone has this or that pet agenda they want the government to adopt. Who gets those agendas in front of the government? The lobbyist.

[ja-va.livejournal.com]

Competition leads to creative ways of marketting yourself or in new methods or products. These in turn lead to higher profits.
If you worry about profits you will care about people buying your product whether there is competition or not. But by itself competition lowers the profits, so it is bad. Monopoly profit will always be higher.

Your argument is similar to saying that presence of criminals makes people increase their home security and so criminals are good for security. But if you care about the security lack of criminals is still better :)

I agree completely on government, this is my point too. If government is bad, we should get rid of it. If it is something we ourselves created in order to make our lives better, it can not be bad by definition.

[kylinrouge.livejournal.com]

That is not really true. Competition leads to creative ways of marketting yourself or in new methods or products.

If people have no choice but to buy your product, they will buy it. If your product is the only one on the market, they will buy it. Ask any CEO if they would love to be the sole producer of a product, they will gladly say "yes".

These in turn lead to higher profits. Conversly a lack of competition leads to stagnation, lack of new products, lack of creativity and less public interest all of which lead to shrinking products.

You're right, it does lead to stagnation in a way. Without competition they see little reason to improve the quality of their products- people will buy it anyway, and they will just roll out the next product knowing that without anything to compare it to except for their last product, all it has to be is better than the last one. Public interest is not a factor when you have a monopoly.

[rasilio.livejournal.com]

No on to the rest of your post.

Your defense of Medical Care as a public good is laughable.

The one issue that you and every single other person who holds this belief refuse to deal with is that medical care in the sense that you are referring to it has existed for less than a century. The Human race has survived for more than 20,000 years with no such thing as medical care and yet now all of a sudden providing it to all is a moral imperative.


Further your argument that it cannot be made private is a joke as there are only a few countries that have socialized it fully and even in those countries medical care was completely private for the first half of the existence of modern medicine.

Finally even to the extent that those socialized or partially socialized systems in other countries show better results that does not actually prove that medical care cannot be provided as or more effectively by the private sector using market prices, it merely proves that those systems are more effective that the form of partially socialized medicine that exists in America today.


"Government was ALWAYS formed by the people and for the people. It is the people who form it. The main focus of forming the government by the people from the ancient times until most recent present always was an IMPROVEMENT upon the difficulties faced by the living of large numbers of them together, difficulties naturally arising in any society and at any time."

ROTFL the history fail is so massive.

No, 100% of governments from antiquity right up through the 18th century were formed by the largest cartel of rich land owners to ensure their positions at the top of the social heap. Usually these were also the most powerful warlords but there are a handful of exceptions.

Even with the founding of the US it can very easily be argued that rhetoric and humanist theory aside it was a government of the rich landowners for the rich landowners at it's founding because the majority of colonists wanted nothing to do with the rebellion and were perfectly happy to remain subjects of the Crown.

"At some point it was decided that the best way to govern is just to have one person at the head of the state, a monarchy. After all, this is how prehistoric tribes were governed. First leaders were either elected or emerged by natural order of things,"

Lol yeah, natural order of things...

Ugg: Old Chief dead. Me Ugg biggest and strongest warrior, me new chief. Anyone got a problem with that *raises club menacingly*.

Tribe: All hail Chieftan Ugg.


That said your utter history fail aside it is true that ultimately all government exists at the consent of the governed, however that consent may be temporary and exist only so long as the government can keep enough of the people afraid of it. While Ugg may be the biggest and strongest warrior there ain't much he can do to stop someone from spearing him in his sleep.

Which brings us to this...

"Do Americans think their government no longer represents them? "

Um yes.

At least large numbers of them on both sides of the political isle do. They believe this for very different reasons but the number of Americans who actually feel that the government represents them and acts in their best interest is shrinking daily and has been since at least the 1960's

[ja-va.livejournal.com]

The Human race has survived for more than 20,000 years with no such thing as medical care and yet now all of a sudden providing it to all is a moral imperative.
Well, things change, welcome to the XXI century, my friend.

there are only a few countries that have socialized it fully
It is not a question of private vs public, it is a question of universal access. Healthcare is universally available everywhere, except some poor developing countries AND UNITED STATES. Without some form of government supervision it can not be made universally available, this is impossible.

however that consent may be temporary and exist only so long as the government can keep enough of the people afraid of it
Does not last long.

If Americans really think that government no longer represents them I have news for you- this government will fall and this State will be no more. That is, again, if it is true. It is only a matter of time.

[sandwichwarrior.livejournal.com]

Here is an alternate way to view it...

Take a particular government instition, any one will do and ask yourself "What is this institution's purpose?" then ask your self "is this purpose being achieved?" If the answer is "yes" than you have found an example of good government. If the answer is "no" then why are we allowing such a waste of man-power and tax-payer's money?

I would argue that the vast majority of federal programs fail to achieve thier stated goals and should thus be re-assesed.

[ja-va.livejournal.com]

Hmm, ask yourself, do I always do the right things in life? Is everything I do perfect, am I the most efficient individual ever? If the answer is no, according to your logic, then why are we allowing such a wasteful man exist on this planet?

Nobody is perfect, including the government, but if it is completely useless it should be dismantled, and if not - it should be supported and improved, not lessened and diminished.

[jerseycajun.livejournal.com]

Just wanted to comment on the factor of economies of scale, that there is a downside as well. The benefits of economies of scale are limited in that once you get large enough, there are corrosive effects that tend to limit the ability of a company to grow further. Diseconomies of scale come into play, and it is at that point where 'outside' help must be called upon to maintain position.

[ja-va.livejournal.com]

True, but this is after you monopolize the market and kill competition. Further growth is restricted by the size of the market.

[aerashive.livejournal.com]

I think blanket statements such as:

"It is worth mentioning, for example, that president Barack Obama, whether you like him/his policies or not, was democratically elected by the majority of American people in a free and undisputed elections. And if some folks truly have such a big problem with him being at the head of the state than the problem is not with president Obama, but with the entire system of democratic government the way it is currently works in the United States. And that means the system is no longer valid and has to be changed. Think about that."

Requires facts, or at the least statistics backed by credible resources. I do not see anywhere in your self masturbation prose, in which you made any statements that were not opinions.

I find it hard to believe when there are revolts going on all around the world, that if America was so dissatisfied with our government, that we would not revolt. Perhaps it is the American people that need to change...

[ja-va.livejournal.com]

Look, I do not have to prove anything to you. You do not like it? Keep on walking.

[underlankers.livejournal.com]

We'd revolt. We'd find out that the firepower that lays waste to entire cities elsewhere in the world is worse when fired by US troops on US citizens and lose, but we'd revolt.

[atasharuku.livejournal.com]

This post sums up my objections to anarchy and libertarianism. The government does a pretty damn good job of keeping our food, medicine, and roads safe, among its many regulatory roles. Quite frankly, I think it is easy to be a nitpicky malcontent in a country in which such things are so well taken care of.

[kylinrouge.livejournal.com]

The replies in this thread scare me. Not only do some people mistakenly believe that monopolies don't exist (they do) or that they're not bad (they are), or that businesses somehow don't strive for them (they do) or that they LOVE it when they have a lot of competition (they don't), but also that somehow monopolies are CAUSED mainly by government intervention? All of the early trade leagues were some sort of government project? Look at Thomas Edison's empire. Bell's empire? It was some sort of government program? Not only that, but somehow government intervention in the form of regulation should be DISCOURAGED for trust-busting and other forms of preventing/breaking monopolies?

The level of ignorance in this thread is astounding.

[meus-ovatio.livejournal.com]

It's not ignorance, it's just mythology. The American Civil Religion.