We're a country of crooks

[kendoiwan]

http://www.nytimes.com/2006/06/27/washington/27katrina.html?_r=1&th&emc=th&oref=slogin

Lets face it, everything we do runs overbudget, and someone always ends up with their hand in the pot, no matter how well intentioned the cause, from rebuilding the WTC, to rebuilding Iraq... :joft:

[htb]

We're a nation of 335 people, plus eleven hundred felons?

[floid]

Those who have none want some.

Those who have some want more.

Those who have much substitue people for stuff and start the process all over again.

Put them all together in a TV gameshow environment and you have:

U sers
S uckers
A **holes

Take note of who winds up in the middle between U and A because they are also GNP and the sole means of support for U and A.


This caricature is not that far from truth.

They are also pulling down quite a few other S's around the world with them proving that, in the end, all are S's when they're not being U's or A's.:whistle:

[Lee]

Okay, I'll reply seriously soon, but for now:

One Louisiana Department of Labor clerk, Wayne P. Lawless, has been charged with issuing about 80 fraudulent disaster unemployment benefit cards in exchange for bribes of up to $300 per application. Mr. Lawless, a state contract worker, announced to one man he helped apply for hurricane benefits that he wanted to "get something out of it," the affidavit said. His lawyer did not respond to several messages left at his office and home for comment.
Ha, "Mr. Lawless," that's great. How do you think they figured out it was him?

:lol:

[LostInThoughts]

Perhaps also worth considering is the culture of mediocrity inherent in government bureaucracies?

[rawr]

Maybe you shouldn't blame everyone for a few people trying to defraud the goverment. Millions were effected, and when you're trying to do something on that large of scale. Theirs bound to be a few theifs. So using this instance to create a blanket statement that all americans are greedy theifs is absolutley absurd. How about the millions of americans of offerd assistance to those who needed help, or the americans who donated time to drive down with water, supplies and food.

[kendoiwan]

But it happens everytime something gets built here... Stadiums, Country's, Weapons, Cars, Home improvements... whenever something gets built here you can almost guaruntee it'll run over budget and someone will grease they're palms...

[rawr]

But it happens everytime something gets built here... Stadiums, Country's, Weapons, Cars, Home improvements... whenever something gets built here you can almost guaruntee it'll run over budget and someone will grease they're palms...


What about cars.. I worked at an honest job for awhile, and there were no "palms greased". Unless you count NLGI #2. People loved to lie though, and say we broke things we didn't, or bought unessicary parts. If we did that the shop would always eat the costs. Home improvements? Im sure thats the same way. You just run into unexpected cost to bring things up to code. The consumer assumes they're being ripped off. Countrys? Stadiums? I could see how they could go over budget. Have you ever tryed to build a stadium? Allot of materials and engineering to bring to life and hope you dont run into any unthough of problems along the way. That cause you to have to rebuild a section of the stadium.


Yes I agree there are dishonest people who wil take advantage of a situation. But in no way is that isolated to the United States.

[kendoiwan]

Your right people everywhere are crooks... If I tell you it'll cost me 2 dollars for bread and you end up paying 5 something went wrong...

[htb]

whenever something gets built here you can almost guarantee it'll run over budget"Here," as in this universe? You would be largely correct: most projects, from home repair to major capital improvements, are over time and over budget. Responsible parties include laws of physics and Murphy's Law, so you may find it difficult to litigate.

As for the government, well. As PJ O'Rourke once wrote, "Government proposes, bureaucracy disposes. And the bureaucracy must dispose of government proposals by dumping them on us."

[panda]

kendoiwan: do you have a point? You've never seem averse to the idea of criminality.

[kendoiwan]

Nope, just an observation...

[htb]

You've never seemed averse to the idea of criminality.Well, though some of us might think Kendoiwan's ire a bit much, he's speaking of elementary and universal percepts, and that's worth discussion.

Conversations with criminals and solipsists, on the other hand, are boring, self-congratulatory affairs.

[panda]

Nope, just an observation...
Not a very timely one. I'd say you're about, I don't know, seven thousand years too late.

[kendoiwan]

new instance in case there was ever any doubt... Ire? Who said I had a problem? I just wish I could get in on the action...

[Lee]

Your right people everywhere are crooks... If I tell you it'll cost me 2 dollars for bread and you end up paying 5 something went wrong...Okay. Let's take that and rethink it.

Say it costs a shopowner $2 for a loaf of bread and he charges $5. What has happened here? Where did that $3 come from? Isn't this simply exploitation?

The answer is simply no.

The price of $5 is based not only upon the loaf of bread. To demonstrate, simply take the shopkeeper out of the picture for one moment, then figure out how to do your grocery shopping and purchase that humble loaf of bread.

The task is very difficult. You will have to find the producer of the bread, likely far away, distributing bread to hundreds of shops in a wide area. After locating the producer, you must travel down there and attempt to purchase a single loaf of bread for $2, which may be difficult for a company with no time to waste selling such small quantities.

Then, after acquiring your bread, you might get a call from home asking if you could pick up some milk. Obstinate in defiance of you local shopkeeper, you refuse to be exploited, after all, he buys milk for $3 and sells it on for $6, and you'll be damned if you are going to lose $3!

So, you find the milk producer, and take the long journey there. You have similar difficulties in puchsing a single carton of milk as buying a single loaf of bread, but eventually you succeed. Satisfied, you start up the car engine for the long drive home. For a briefmmoment you feel like buying some chocolate, but decide against it because the sun is now setting and you have a long drive ahead before you get back home.

Eventually, after about 3-4 hours you get home, happy that you saved a whole $6 and stopped that greedy shopkeeper from exploiting you! A few days later, the bread has went stale, the milk has been drunk, and off you go for the repeat trip.

Now, we can understand the role the shopkeeper plays. $6 is a paltry sum of money to save, and it is quite likely that a short trip to the local store and an expenditure of $11 would be far more preferrable than driving from producer to producer, for hours at a time, burning all that fuel, just to save $6 in cash. In other words, having bread, milk and whatever other groceries you may desire within easy reaching distance, is worth more than saving a few pieces of paper with dollar signs on them.

Of course, you might decide upon a solution, which is to buy in bulk. By acquiring milk and bread in bulk you get a cheaper price, plus you save on fuel, time and energy by taking fewer trips. However, most such goods need storage space, and will be unedible unless kept in the correct storage conditions. To satisfy these requirements will be costly to you.

In fact, after all this you may find yourself turning to the shopkeeper. The shopkeeper can arrange transport and storage of those goods, readily available to you for a $6 of payment. By specialising in his trade, the shopkeeper can cut down costs further and lower the overall cost of your groceries to a level which you alone could not hope to achieve. Whilst at the same time, this would free up your time to specialise at your own work, and in return offer better services to the community at lower costs.

Goods, such as the loaf of bread do not have an intrinsic value, it is not as though the real cost is $2 and the fake cost is $5. Any particular commodity is valued by the individual only, based upon a host of considerations, including its ease of acquisition.

Shopkeepers are often disliked because of a failure to recognise the helpful role they fulfil. This can end in horrible consequences, particularly because minority groups seem to be most prevelent within this sector, such as the Indians in the UK, Jews in Germany or Chinese in Indonesia. The common misconception is that they are parasites or leeches, exploiting people by charging more than the "true" value of goods. However, shopkeepers provide a very important role and all economies suffer in their absence.

[mgb]

Okay. Let's take that and rethink it.

Say it costs a shopowner $2 for a loaf of bread and he charges $5. What has happened here? Where did that $3 come from? Isn't this simply exploitation?

The answer is simply no.

The price of $5 is based not only upon the loaf of bread. To demonstrate, simply take the shopkeeper out of the picture for one moment, then figure out how to do your grocery shopping and purchase that humble loaf of bread.

The task is very difficult. You will have to find the producer of the bread, likely far away, distributing bread to hundreds of shops in a wide area. After locating the producer, you must travel down there and attempt to purchase a single loaf of bread for $2, which may be difficult for a company with no time to waste selling such small quantities.

Then, after acquiring your bread, you might get a call from home asking if you could pick up some milk. Obstinate in defiance of you local shopkeeper, you refuse to be exploited, after all, he buys milk for $3 and sells it on for $6, and you'll be damned if you are going to lose $3!

So, you find the milk producer, and take the long journey there. You have similar difficulties in puchsing a single carton of milk as buying a single loaf of bread, but eventually you succeed. Satisfied, you start up the car engine for the long drive home. For a briefmmoment you feel like buying some chocolate, but decide against it because the sun is now setting and you have a long drive ahead before you get back home.

Eventually, after about 3-4 hours you get home, happy that you saved a whole $6 and stopped that greedy shopkeeper from exploiting you! A few days later, the bread has went stale, the milk has been drunk, and off you go for the repeat trip.

Now, we can understand the role the shopkeeper plays. $6 is a paltry sum of money to save, and it is quite likely that a short trip to the local store and an expenditure of $11 would be far more preferrable than driving from producer to producer, for hours at a time, burning all that fuel, just to save $6 in cash. In other words, having bread, milk and whatever other groceries you may desire within easy reaching distance, is worth more than saving a few pieces of paper with dollar signs on them.

Of course, you might decide upon a solution, which is to buy in bulk. By acquiring milk and bread in bulk you get a cheaper price, plus you save on fuel, time and energy by taking fewer trips. However, most such goods need storage space, and will be unedible unless kept in the correct storage conditions. To satisfy these requirements will be costly to you.

In fact, after all this you may find yourself turning to the shopkeeper. The shopkeeper can arrange transport and storage of those goods, readily available to you for a $6 of payment. By specialising in his trade, the shopkeeper can cut down costs further and lower the overall cost of your groceries to a level which you alone could not hope to achieve. Whilst at the same time, this would free up your time to specialise at your own work, and in return offer better services to the community at lower costs.

Goods, such as the loaf of bread do not have an intrinsic value, it is not as though the real cost is $2 and the fake cost is $5. Any particular commodity is valued by the individual only, based upon a host of considerations, including its ease of acquisition.

Shopkeepers are often disliked because of a failure to recognise the helpful role they fulfil. This can end in horrible consequences, particularly because minority groups seem to be most prevelent within this sector, such as the Indians in the UK, Jews in Germany or Chinese in Indonesia. The common misconception is that they are parasites or leeches, exploiting people by charging more than the "true" value of goods. However, shopkeepers provide a very important role and all economies suffer in their absence.

Say you built a stadium. Say it was expected to cost $100 million. Say, it cost $500 million because of "cost overruns". Say those overruns went to things like, workers stealing supplies, lobbying public officials, the rising cost of goods which your project singlehandedly created combined with the laziness of your goods buyer, etc.

You can't stop building, even after you've spent $100 million, so your contractor has you by the balls. I mean you could stop, but I bet the 1/5 built stadium wouldn't look so shit hot sitting there for all to see. You could try and sue your contractor, but he'll just fold up shop and disappear, and you are still left with an unfinished stadium. Hire a new contractor part way through? Sounds easy. Until they tell you what a bad job the other contractor did and tell you it's going to cost $150 million to fix the work that's already been done, plus another $250 million to finish the stadium, not to mention what happens when he raises the price too.

Oh and it rained for a couple weeks so now the project is six months behind, go figure?

These problems can't be brought down to the level of bread and milk.

[Lee]

Say you built a stadium. Say it was expected to cost $100 million. Say, it cost $500 million because of "cost overruns". Say those overruns went to things like, workers stealing supplies, lobbying public officials, the rising cost of goods which your project singlehandedly created combined with the laziness of your goods buyer, etc.

You can't stop building, even after you've spent $100 million, so your contractor has you by the balls. I mean you could stop, but I bet the 1/5 built stadium wouldn't look so shit hot sitting there for all to see. You could try and sue your contractor, but he'll just fold up shop and disappear, and you are still left with an unfinished stadium. Hire a new contractor part way through? Sounds easy. Until they tell you what a bad job the other contractor did and tell you it's going to cost $150 million to fix the work that's already been done, plus another $250 million to finish the stadium, not to mention what happens when he raises the price too.

Oh and it rained for a couple weeks so now the project is six months behind, go figure?

These problems can't be brought down to the level of bread and milk.My God you are an idiot sometimes. I can hardly begin to figure out how to respond, since that is so off point I can barely see it in the distance. I know we like to go off topic around here, but at least don't do so under the pretense of staying on topic.

I think I get what you might be getting at though, maybe:

Of course there can be shoddy managed stores, which charge a lot more than is necessary because they are inefficient at delivering goods. But even in the best managed competitor - who will be slowly putting the other out of business - the shopkeeper must always pay less than they charge. Furthermore, there is no fixed amount extra that should be charged, since it is based upon the cost of fuel, the crime rate, the specific location and all kinds of other idiosyncracies that accompany everyday life.

[Lee]

Lets face it, everything we do runs overbudget, and someone always ends up with their hand in the pot, no matter how well intentioned the cause, from rebuilding the WTC, to rebuilding Iraq... :joft:This is what happens when bereaucracies are running the show.

After the San Francisco earthquake and fire of 1906, more than half of the cities housing supply was destroyed leaving 200,000 people homeless, yet no shortage of housing followed and at the same time, only about 30,000 people had to be set-up in temporary accomodation. The remaining 170,000 were absorbed in the remaining property market or left to stay with relatives.

All we have to do is remember the basic laws of supply and demand.

As demand increased, prices increased. An increase in prices forces people to ration, where before they might be able to affored an apartment or home on a single wage, with the rising prices they may now require a room- or house-mate, or perhaps a large family which previously occupied two houses, may relocate into a single house. In short, the rising price of accomodation forced the residents of San Francisco to ration their scarce resources, which in this case were homes and apartments. Furthermore, the rocketing demand acted as incentive upon developers to quickly rebuild or develop new homes. This is another simple case of supply and demand. Eventually the prices slowly dropped, as more housing became available and there was less demand to be satisfied.

San Francisco suffered a major disaster, with little government aid at all, and yet it bounced back immediately. The papers less than a month after the disaster began advertising vacant apartments. And this was back in 1906!

Today, we have a government funded disaster relief agencies. In other words, we have top-down bereaucracies responsible for the safety of thousands and sometimes hundreds of thousands of lives. Such bereaucracies have little incentive to economize, but instead get bogged down in paperwork, management structures and spending money on hair-brained schemes.

As unpalatable as it seems to be for many people, it would be far more preferrable if private insurance companies, charities and families were left to provide disaster relief. When the material well-being of both the rescuer and the rescuee are at stake, there is a far greater incentive on the rescuer (the private insurance company in this case) to get there fast, equipped with the best equipment money can buy to help those in need.

Workers in a government bereaucracy are shielded from the negative feedback of a bad performance, no individual can be blamed, and there is no loss to any individual for driving the slow and easy route, or creating unnecessary paperwork. Indeed, a bad performance may in fact be rewarded with more funds in the future and encouraging inefficient, slow and corrupt practices.

Furthermore, central planners attempt to guess what people will need, often with no personal costs for being wildly wrong and wasting time and energy which is so desperately needed elsewhere. Private companies need to build up experience and be more careful in their allocation of resources, because they are hit hard by the bottom line if they fail. In other words, they receive the feedback from mistakes and must adapt or go out of business.

The fiasco of Hurricane Catrina are not new and surprising. The entire incentive structure of the government organisations which provide disaster aid is condusive to fraud, waste and mismanagement. All the more galling when we can literally count the cost of these failures in body bags.

Just search "death by bereaucracy" on Google and find a dozen articles detailing individual instances of disaster relief gone wrong.

[mgb]

My God you are an idiot sometimes. I can hardly begin to figure out how to respond, since that is so off point I can barely see it in the distance. I know we like to go off topic around here, but at least don't do so under the pretense of staying on topic.

I think I get what you might be getting at though, maybe:

Of course there can be shoddy managed stores, which charge a lot more than is necessary because they are inefficient at delivering goods. But even in the best managed competitor - who will be slowly putting the other out of business - the shopkeeper must always pay less than they charge. Furthermore, there is no fixed amount extra that should be charged, since it is based upon the cost of fuel, the crime rate, the specific location and all kinds of other idiosyncracies that accompany everyday life.

Your ridiculous analogy would have been more on point if you'd said that the bread was priced at $2 and cost $50 when you went to pay for it at the cashier. As it was you just went rambling on another I'm-Lee-the-economist rant that had nothing to do with the actual topic, as usual (unless of course you've started the topic).

On the other hand, maybe I was off topic responding to your post, I only made it through the first four or five lines of it.

[JBHunt]

Your right people everywhere are crooks... If I tell you it'll cost me 2 dollars for bread and you end up paying 5 something went wrong...

Lee, I think the shop owner story was really nice.
But...what if you misunderstood Kendoiwan? What if you end up paying say 50 dollars for a 2 dollar bread. Would your shop owner story still be valid? Or would you now think there is obvious fraud there?

[Lee]

And yes, many people will attempt to break the law when they think they can get away with it. This is especially true in disaster scenarios where all law enforcement breaks down.

There is even good evidence that this may be a product of our biology. Look to the work of Cohen and Baron for research into honour cultures and the circumstances that breed them, but also into Daly and Wilson for information about homocide, violence and the possible roots in human nature. Also check out Evolutionary Stable Strategies, Frequency Dependent Selection and the tit-for-tat games.

[panda]

homocide, violence and the possible roots in human nature.
Possible roots?

[Lee]

Lee, I think the shop owner story was really nice.
But...what if you misunderstood Kendoiwan? What if you end up paying say 50 dollars for a 2 dollar bread. Would your shop owner story still be valid? Or would you now think there is obvious fraud there?That depends. If the shopowner is providing goods to an outpost in Antartica, then sure, why not. To be honest, it is impossible to give a "true" price. The shopkeeper has to cover his expenditures whilst making enough profit to live on, if the shopkeeper is really bad at his job then he may be charging much higher prices than a smarter competitor might charge.

However, there is no point where the price is invalid. If the shopkeeper charges prices which nobody is willing to pay, someone else will seek to provide and the silly shopkeeper will go out of business. This way, valuable resources are directed away from people who do not make efficient use of them and try to seel them at unreasonable prices.

However, since the shopkeeper owns the contents of his shop, then he can attempt to sell them at any price he wishes. If he wants to stay in business, he'll soon start selling them at a price which is affordable and fends off competitors. In other words, enough to make a decent profit live (and possibly then some, depending on how good business is going).

[Lee]

Possible roots?Well, are violent impulses a product of natural selection? ar they "socialised" into us? Are they given by God or the Flying Spaghetti Monster? Who knows?

I say possible because such analyses as Daly and Wilson go into is always speculative. I think that violence is a product of natural selection, and studies into violence actually support the predictions of evolutionary biology. But some people seem obstinately opposed to that idea in any form. Whatever. Whether it is a product of natural selection or not, it exists and is probably part our make-up.

[panda]

All creatures are capable of violence. Of course it's inherent; it's a requirement of being alive.

[Lee]

All creatures are capable of violence. Of course it's inherent; it's a requirement of being alive.Yeah, tell an anthropology department that... heh.

[bergenski]

I can hardly begin to figure out how to respond, since that is so off point I can barely see it in the distance.
No, he is more on point than you. In your zeal to provide an economics lecture you supplanted the thrust of the thread.

[panda]

Yeah, tell an anthropology department that... heh. How can anybody dispute something so elementary? Show me someone who isn't capable of violence in any form, under any circumstances, and I'll show you a corpse.

[Lee]

No, he is more on point than you.Not really, since bad workmanship is at best comparable to bad customer service/shopkeeping or whatever. Does anybody really need to tell you what to do with places like that? Don't shop there, find an alternative or complain.

Building stadiums is incredibly different, due to all the legal contracts, insurance and whatnot. But even there, the same basic principles apply. People will make mistakes, but the trick is simply not to repeat them. The beauty of the system I was describing is that shoddy workmanship, bad customer service and unneccesarily high prices punish people inthe pocket, with those refusing to change eventually going out of business.


In your zeal to provide an economics lecture you supplanted the thrust of the thread.The thread had lost all its thrust, and I contributed posts on that topic anyway. Look, if you don't care to read anything I post, please don't.

[Lee]

How can anybody dispute something so elementary? Show me someone who isn't capable of violence in any form, under any circumstances, and I'll show you a corpse.That conjured amusing images of Mother Teresa fighting Pol Pot in my mind for some reason.

But you're right, it is pretty much madness, but there are many who really do believe it. It's the "violence, sex and race are all a social construction" crowd that are usually behind it.

[last_caress]

How can anybody dispute something so elementary? Show me someone who isn't capable of violence in any form, under any circumstances, and I'll show you a corpse.

Man you better stop bragging and dump that thing already.

[bergenski]

The thread had lost all its thrust, and I contributed posts on that topic anyway. Look, if you don't care to read anything I post, please don't.
Thrust in terms of idea. As in people's propensity to abuse situations, as opposed to market forces limiting shoddy business practices. Anyway, just pointing out that it's not nice or, really, appropriate, to call him an idiot when he was a bit more on the overall point than you.

[Lee]

Thrust in terms of idea. As in people's propensity to abuse situations, as opposed to market forces limiting shoddy business practices. Anyway, just pointing out that it's not nice or, really, appropriate, to call him an idiot when he was a bit more on the overall point than you.I did say "sometimes" ... Besides, he knows that he is antagonizing me. I don't dislike him, even if he is an idiot sometimes.

More than any of that though, I doubt he appreciates you coming to his rescue. Actually, there is something a little comical (and possible even touching) about that.

:lol:

[bergenski]

More than any of that though, I doubt he appreciates you coming to his rescue.
What makes you think I am "rescuing" him? Just pointing out your error.

[Lee]

What makes you think I am "rescuing" him? Just pointing out your error.I didn't make an error. His comment was off point. Kendoiwan said $2 to $5, not $100,000,000,000 to $500,000,000,000. The first is a *2.5 increase, while the second is a *5 increase. Not only that, but the circumstances and sheer quantities are very different.

It is quite possible that transport, storage and customer service costs could come to $3 without any horribly inefficient and unprofessional business practices going on. The $2 price might remain stable wherever you are, but the actual costs of bringing that $2 loaf of bread to customers can vary depending on all kinds of specific circumstances.

Even when we factor in these possible goings on, the basic principle which I attempted to elucidate still stands. Shopkeepers play a very important economic role, and while we may complain that they are not selling their produce at its "true" value, that is simply a misunderstanding of what value is, as we would find out should we ever decide to stop the shopkeepers from "exploiting" us.

Mgbradsh rightly pointed out that sometimes companies do bad jobs, are inefficient and charge much more than their initial projected costs. Of course, there are many safegaurds a company can take to avoid being a victim, but really it all has nothing to do with my post and point I was trying to make. I fully accept that some companies a crap, but the beauty of free choice and the profit system is that companies which are like that tend to go out of business, whilst new and upcoming companies tend to adopt the practices of those already established.

But again, it has sweet fuck all to do with my point.

[bergenski]

Lee:

What about the situation regarding alcoholic beverages. In Europe (and Japan) alcohol is much more reasonably priced than in the US. At stadium events, etc, in the US they charge around 7 dollars for a cup of (crappy) beer. I see this as an exploitation of the market since entertainment is a commodity that is going to see rather consistent demand, in my opinion, somewhat regardless of prevading economic conditions since Americans are so stressed from their jobs. Yet alcohol also has an extremely high demand in Europe, yet festivals sell their alcohol at much more "reasonable" prices. This seems to be a situation where market forces don't necessarily have to adapt to demand to extract enormous profit and "quality of life" is better.

[kendoiwan]

Lee tailor your response in the context of Iraq and The N.O. rebuilding...

[Pooja]

We desperately need to privatize every possible thing that can be privatized. Privitization is the most cost efficient way of getting things done. Let companies fight over contracts. Let them find their own creative ways of minimizing costs. This is the best way.

[last_caress]

We desperately need to privatize every possible thing that can be privatized. Privitization is the most cost efficient way of getting things done. Let companies fight over contracts. Let them find their own creative ways of minimizing costs. This is the best way.

Dead wrong.

http://www.commondreams.org/views01/0222-04.htm



The neglected reality was that non-financial management determines the success of such an enterprise. There can be excellent management in public enterprises, including armies and navies. There can be disastrous management in private ones. The ownership of the enterprise is a secondary concern.

[htb]

Privitization is the most cost efficient way of getting things done.Yes. Compare one's reception at the Post Office and a depot of any one of the private parcel carriers: Byzantine indifference versus speedy, profit-driven attentiveness. The risk of bankruptcy and the rewards of success make, as a pair, for marvelous inspiration.

Edit:
There can be excellent management in public enterprises, including armies and navies.Can be. Usually isn't. Contract with a state, or a county, or a municipality or a military branch and you will find accounts receivable straddling a world that runs in slow-motion.

[kendoiwan]

That's a truism that isn't really true... I can easily point to Haliburtons handling of the militarys accounts, and not just Iraq either, the food services, certain security operations... or weapons contractors, or consultants, I can go on and on with examples of wasteful private enterprise... I concur with the statement that management matters more than ownership of said venture.

[Lee]

We desperately need to privatize every possible thing that can be privatized. Privitization is the most cost efficient way of getting things done. Let companies fight over contracts. Let them find their own creative ways of minimizing costs. This is the best way.Heh.

Not really. What matters is feedback. The private sector has a simple and effective feedback mechanism. This is error-correcting, or in other words, it is a learning system.

Knowledge is wealth. It is only with knowledge that we can eliminate errors and succeed in our goals. All life is just the unfolding of knowledge in the pursuit of problem solving, natural selection, science, the free-market etc. The very way your brain learns is based upon the same principle -- feedback.

Without an authority which can act to select from all the possible alternatives, then no learning is possible. There is no way of solving problems. Free-market mechanisms have such a feedback feature, which continuously calibrates the use of resources with alternative uses toward satisfying demand. This is achieved in a non-localised manner, knowledge is spread throughout the system i.e. contained in no single mind, but instead distributed throughout the interrelational structure of individual interactions.

Government agencies are lacking such feedback features, or rather, they provide feedback which encourages waste, fraud and inefficiency. The feedback structure is responsible for the incentives which individuals base their decisions, so frequently such people are not being irrational or stupid, but simply acting quite rationally within the incentive structure which they exist. Politics is full of cases, where incentive/feedback structures encourage behaviour which is detrimental to society in the long-term, whilst often being beneficial for the individual politician, who can often escape the consequences of bad choices.

There are some cases where even free-market feedback doesn't work all-too-well, though I would often be happy to see them stay if only on the grounds that I prefer inefficient freedom to the possibility of efficient serfdom. But, if you want to come up with a societal structure which successfully provides the feedback and incentive to optimize resources, which is better than the free-market, then be my guest.

[Lee]

Dead wrong.

http://www.commondreams.org/views01/0222-04.htmI'll just repost something I wrote here a couple of weeks ago to that.

There have been problems with the British railway network for over 100 years, and more than one failed attempt by government to do something about it.

The problem today is that the railway industry was never really opened to free-market competition, sure they allowed private companies to run the trains, but central planners were still setting ticket prices, targets and policy. In other words, the system exists in a kind of pseudo-privatisation, which leaves the entire network at the mercy of almost all of the same inefficiencies, political incentives and price controls that ruined the network in the first place!

However, the problems run even deeper. The railway industry began privately and for a time made a healthy profit, though time was harsh and by the early 20th century the railway companies were struggling. Of course, at this point the inefficient parts of the railway should have been allowed to die, after all, that is the most important function of any free-market, the elimination of inefficiency through bankrupcy, thus allowing the same resources to be directed toward useful ends.

After World War II, during the heyday of Old Labour and its far left ideology, the railway system was nationalised. An amusing pamphlet from the era has written as its sub-heading 'A proposal that the state should acquire and maintain the railways, making them free to the public like the highways.' Alas, if only it were remotely true, nothing is free, someone has to pay the cost of developing, maintaining and running a railway network.

So they say "the government should pay," but of course the government has no money except that which is appropriates in taxes, asking the government to pay is simply a roudabout way of forcing another to pick up the bill, regardless of their own wishes. Usually we would refer to this forceful acquisition of anothers wealth as theft, though such condemnation is conspicuously absent when this theft is performed via the middle-man of government.

Under such circumstances of nationalisation or today's subsidisation we cannot rely on prices to reflect the costs of providing anything, since the industry can simply pick up the shortfall in ticket prices by forcing eveyone to pick up the bill in higher taxes. This leads to a peculiar side-effect, where privatisation (to whatever degree) may result in higher prices at the ticket office, but with lower net costs to society, therefore fostering the illusion that costs are rising.

Whether this has actuall happened in recent years is difficult to say, the rail networks appeared to have improved since privatisation, though nobody can be sure if they are simply mirroring the same improvements which might have occured without privatisation.

I personally think that the rail network has been forced to limp on to the point where it is no longer financially viable, the net costs to society are more than the net benefits to society. The problem is that the short-term benefits to individuals do not mirror that, but many people can make personal gains by using political clout to keep the railway system limping on.

The free-market encourages efficient allocation of scarce resources, because supply, demand and the bottom line force companies to adapt or go out of business. This process is cumulative, preserving good ideas, systems, management practices, customer service etc. whilst eliminating errors. 50 years of nationalisation crippled that process, because public servants can avoid the feedback mechanisms which would otherwise discipline private companies.

The idea that important decisions involving millions of pounds of other people's money, should be placed in the hands of those who bear little or no costs for failure is moronic, you'd be an imbecile to think it was a good idea. Any private companies would inherit a cripple, possibly beyond repair without an extraordinary level of investment, but we did not even get that, but instead were given a pseudo-privatisation little better than what came before.

Privately owned railways are not impossible, in fact, to my knowledge Japan's railway network is almost exclusively privately owned and is one of the -- if not the -- best in the world. Though perhaps in the case of the UK, it is wise to question how much a railway system is needed? We are a small island, good roads and surrounded by seas and rivers.

Privatisation is no guaruntee of success. In fact, private companies go out of business all of the time for trying to provide services nobody wants, or at prices nobody is willing to pay. The problem is that similar overpricing of public services, or in other words - a net loss, often goes unnoticed. The damage done to the economy over the long-term is probably impossible to measure. The fact that government might keep a service running does not mean that society is getting anything out of that service, which they are probably paying more for than is being saved.

[htb]

under communist rule....Where the only thing left private, we're told, was misery.

[Architectonic]

Dead wrong.

http://www.commondreams.org/views01/0222-04.htm

I'm sure we can all agree that the privatization of a monopoly is not necessarily a good idea...