On 1 March 2010 06:58, Stephen P. King <stephenk1@...
>> Perhaps the parents are ignorant of the benefits of education, perhaps they are too poor
>> to pay for it. There will be a tendency for market mechanisms to set this right: buyers
>> will see that their neighbours' children who go to school are >> better off and therefore will
>> become more willing to educate their own children, and sellers will try to attract
>> indifferent buyers by improving the service they offer and/or decreasing the price.
>> Nevertheless, it is still possible that, for example, there is a critical literacy rate above
>> which everyone in the country will prosper, and that the mechanisms of a private system
>> will never get the literacy rate above this level.
>> A clearer example may be public health. Suppose that there is a vaccine which costs $10
>> to produce and offers $5 of utility if there is a takeup of <70% and $20 of utility if there
>> is a takeup of >70%. In a free market, with everyone rationally seeking to maximise their
>> own interests, few will pay $10 or more for the vaccine; but if the vaccine is subsidised
>> by the government so that it costs only $4 there will be a high takeup, and everyone will
>> benefit as a result.
> Hi Stathis,
> I strongly dislike having to take a side in this debate, I was truly
> hoping for an objective interest in a discussion of the facts. So be
> it. I have a severe cold and so my thought process is a bit
> In either case of your examples below the government does not have a
> set of basic facts that are distinct from those that are not in
> government, one cannot get something for nothing. The price of an
> education or a vaccine are always going to be, at the end of the
> day, the maximum that someone is willing to pay regardless of
> whether it is a single individual or many individuals. And who is
> the government to say that that choice is the only one that exists
> unless coercion is involved?
> Subsidizing a price is nothing more that the use of coercion to
> force people to pay for something they do not freely chose.
> Arguments of "the people do not know what is good for them" is
> equivalent to a prejudice that are people are at best like children
> and that the government, as a parent, must chose for them. To do
> this is to completely advocate the rights of the people by removing
> from them all responsibilities. How is this fact so glibly ignored?
> While we can go on and on about the benefits of having global rules
> for literacy rates, we have yet to show an example of how a managed
> economic system can overcome its inherent handicap (as Hayek and I
> have pointed out) whose consequences can only be forced on a
> populace. Stating that something is the case is not a proof that it
> is so. Your claims that a private school system could not raise
> overall literacy rates is based on a straw man argument that is
> clearly wrong; unless you can show the mechanism such that a "
> uneducated, dissatisfied underclass" would expand to become a
> sizable majority in a population.
> In the real world that I have studied, the times where something
> like your example has occurred has always been due to the
> interference of governments like forced segregation, limits on
> private schools and enterprise, and worse. We can see how the
> "welfare" systems of governments only lead to further misery by
> removing the natural incentives that people have to improve
> themselves. If our government welfare mechanism reward illiteracy,
> unemployment, can we expect less?
> It is only those that can wield force and coercion that can alter
> the natural state of markets for almost any product and almost any
> alteration will only be away from the most efficient for reasons
> that can be understood in computational terms:
> I am further mystified how it is that to think of people as if they
> are permanent member of some "class" does anything to help us
> understand our human condition. It seems to me that any that would
> do so would only do so to sustain some form of irrational prejudice.
> And to those that somehow ascribe a desire for " state organization
> of armed forces, police and courts, and prisons" to those that only
> wish to have governments off our backs is at least inane.
The examples I gave are a variant of the Prisoner's Dilemma. It could
be obvious to everyone that cooperation will benefit them, but left to
themselves they will not cooperate, so everyone loses.
Suppose I have these choices:
A. I don't pay tax; everyone else pays tax.
B. Everyone pays tax.
C. No-one pays tax.
Suppose further that from a purely selfish point of view I believe
that A is best for me, B is second best, and C is worst, and that
everyone else also believes this of themselves. For obvious reasons A
isn't going to happen. The choice is then between B and C. If we
rigidly stick to the ideology that taxation is coercion and coercion
is bad, we end up with C, the least desirable outcome. The best
possible outcome in this case is B: if I can't have A and I don't want
C, I agree to a conditional contract whereby I pay tax provided that
everyone else also pays tax.