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Matt Gelfand's avatar

Let's flip Arnold's line of reasoning around to examine the merits of government action.

1. Government action relies on government actors behaving in the public interest.

2. Governments are optimal only under conditions of perfect altruism of government actors.

3. The conditions for perfect government are rarely satisfied.

4. There are many instances of government failure.

5. Therefore, government does not work.

There are many examples of market failure that cannot be overcome by libertarian market processes, and I believe libertarians would agree with at least some of them. They usually involve "public goods" where competitive actors would be duplicative and inefficient. Thus, a system of laws, the justice system, national defense, public safety (police, fire firefighters), airline safety, and numerous other examples are more efficiently handled through the polity rather than markets.

To take the last example, one might argue that markets could handle airline safety *over time* as airlines or monitors of airlines develop reputations for optimal safety management. An anology might be the automobile industry where Toyota, Volvo, and the erstwhile Saab have (or had) reputations for building the safest cars. But lapses in car safety result mainly in fender benders. Airline safety is a more complicated and fraught endeavor. Few people - maybe test pilots - would want to be the guinea pigs testing a new airline before it develops a good reputation. Moreover, there are vast economies of scale to verifying airline safety. If, say, the FAA (or a private corporation paid for by public monies) verifies that American Airlines and Boeing aircraft are safe, then passengers don't need to pay for another verification service - a classic public good. If we had to rely on the market to verify an airline's safety, who would pay for the service? Airlines paying for the "good housekeeping seal" would not result in credible safety ratings. If some passengers paid for such a service then other passengers could free ride; there would be a suboptimal amount of verification.

Another argument against government is that politicians and bureaucrats are self-motivated and so don't act (optimally) in the public interest; thus, bureaucracies are inefficient. But corporate bureaucracies also can be inefficient and faulty because of similar principal/agent problems. For example, corporations designed and manufactured the Ford Edsel, the Chevy Corvair, new Coca Cola, the Boeing 787 Max, complex, opaque financial instruments, and numerous other failing goods and services. That government at times produces faulty outcomes is not in itself a reason to preclude using government in situations where it has a comparative advantage - for the provision of public goods.

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Dave's avatar

The relentless push for technocracy is a transparent attempt to preserve the current oligopoly.

Rising populism will put an end to this. If you thought Trump was bad, then you should do everything you can to put him back in power, because what will come instead of him will make him look like Cyrus the Great.

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