All through Africa are "countries" where the government has failed, unless you consider warlords with 12 year old soldiers a government. Not only is there no flourishing of productive business in these places without rules, but I think the warlords and their 12 year old soldiers ARE the "businesses" that arise naturally in the absence of a government. It seems ludicrous to me to suggest businesses in the west exist in any way separate from the rule of law, fiat money, and constraints against violence and theft as allowed competitive techniques.
Why are the largest richest businesses all in the western countries with their incredibly powerful governments and restrictive regulations? Is that some wierd coincidence?
Thanks, I conflated economic efficiency with the lay definition of efficiency.
I think the hesitancy towards for-profit gov't comes from:1. Fear of sufficient accountability (It's hard to shop for new gov't. In extremes, gov't can close borders and create a captive market. )2. Fear that economic efficiency will be pursued at the cost of non-monetary values like equality, privacy, freedom, or freedom of speech.
There are positive and negative historical examples of profit-motivated organizations with governmental power. But the negative ones are particularly vivid in the public imagination.
Maybe with modern communication tech and testbeds like Prospera we could experiment with new ways of incentivizing governments. Whether by profits or other means.
when it comes to improving QoL, govt is more efficient than for-profit corporations. Govts try to improve QoL while corporations are focused on maximizing profits often at the expense of the consumers. Markets fail to fully punish companies that take advantage due to information asymmetries. Govts solve the many failures of markets
For-profit companies are efficient, but efficient at profit-maximizing, not value-producing. And sooner or later, profits are maximized by harming the citizens.
When companies are given a monopoly over force they can use this to create monopolies and monopsonies that hugely increase profits at the expense of the health, freedom, and livelihoods of the workers and general public. That's how you get company towns that own the mines, the houses, the police, and pay in their own company scrip only valid at the company store.
The East India company was great at extracting resources. It was even great at building railroads to extract resources. It was great at becoming a monopoly and selling opium and slaves. It was not so great at preventing famine or caring if lots of people died.
Selling opium and slaves and waging war on China to sell more opium will always be more profitable than not doing it. And if shareholders are unchecked and rewarded for choosing profits rather than citizen's lives, they will follow their incentives.
I think the first problem is that you can't opt out of government and you can't shop around. If there was a system where the US got rid of the federal government, and each of the 50 states became independent for-profit governments, and everyone had complete freedom of movement, then it could begin to work.
The second problem is that one of the biggest purposes of government, military protection, doesn't work so well with competing for profit governments. Say all the member countries of the European Union became for profit governments, and the EU itself only remained to ensure free trade and freedom of movement, nothing else. A belligerent country, like an hypothetical competent Russia, could pose a massive threat to a for-profit government that's ultimately controlled by disunified shareholders and not a strong executive.
The problem I'd have with this (and Yarvin's) is that there are so many interlocking externalities in the world that many fields are quite hard to rationally calculate a profit on. The "easy" fileds are run by private orgs, the "hard" ones are left with govt. In short, I think it's non-trivial to design a for'profit govt.
It is true that while a government might have a monopoly locally, there is still competition between governments. A problem there is that such competition is a slow process - leaving the door open for governments to enslave and exploit their citizens in the mean time. To avoid going off the rails at the hands of a greedy dictator, many countries have within-government competition - with rival political parties. Part of the idea is to limit the scale and duration of the monopoly power of the government - and so avoid negative evolutionary trajectories and bloody revolutions. As Robin notes, many people hate the idea of a monopolist ruling party exploiting them as much as possible in order to to enrich themselves. If the hatred of the population is too high, then there's a revolution and a new political system is installed.
As outlined in an old comment I made, you do it by requiring gov officials to be invested into an asset class (Stateshares) sufficiently enough for an official to care more about that asset class rather than accruing other capital like income, bribes, laziness (rent-seeking), etc.
You can search for Contingentative Capitocracy for more details.
I like the idea, and the low but realistic taxes & regulations, even the push for hiring Hondurans on the island - but WHO are the people making decisions? How are they paid? What is the business/ gov't plan? What do we get for (not so easy to find cost of) $130?It's true that folk don't like the idea of a for-profit gov't with a monopoly on force - so one aspect should be what is the explicit social.Where are links to some of the "bad press"?Are you, Robin, doing any business there (like publishing an e-book or anything)? Lots of us are interested.
Your last paragraph gets to the point. Since private companies are likely to fail at the same time in the same way, governments can provide a backstop and bail them out.
That doesn't seem like a great analogy. A business can uproot itself and move downtown if it finds a better location there. However, a government can't go and occupy western China if it thinks it would do better there. The difference could be described in terms of governments having more geographic inertia. Governments can't easily move around. All the other territories are already occupied. Attempting to move to another location is generally viewed as a hostile military act and opposed by international law.
Most firms who have a physical location have "monopoly" property rights over that location. Even so, they compete with other locations. Same would be true of for-profit nations.
Corporations work as well as they do partly because they are prevented from becoming monopolies that face no competition - and can then behave badly without fear of negative consequences. With governments, it is not clear how this "anti-trust" role would be played. It seems as though they would have a monopoly. Then the issue is how to make sure they don't abuse this role. For example, one approach is to time-limit the monopoly power and then have regular reviews to see if people think the government needs to be replaced or overhauled. Corporations typically don't face this issue, since if they get too big and powerful, the government breaks them up.
All through Africa are "countries" where the government has failed, unless you consider warlords with 12 year old soldiers a government. Not only is there no flourishing of productive business in these places without rules, but I think the warlords and their 12 year old soldiers ARE the "businesses" that arise naturally in the absence of a government. It seems ludicrous to me to suggest businesses in the west exist in any way separate from the rule of law, fiat money, and constraints against violence and theft as allowed competitive techniques.
Why are the largest richest businesses all in the western countries with their incredibly powerful governments and restrictive regulations? Is that some wierd coincidence?
Thanks, I conflated economic efficiency with the lay definition of efficiency.
I think the hesitancy towards for-profit gov't comes from:1. Fear of sufficient accountability (It's hard to shop for new gov't. In extremes, gov't can close borders and create a captive market. )2. Fear that economic efficiency will be pursued at the cost of non-monetary values like equality, privacy, freedom, or freedom of speech.
There are positive and negative historical examples of profit-motivated organizations with governmental power. But the negative ones are particularly vivid in the public imagination.
Maybe with modern communication tech and testbeds like Prospera we could experiment with new ways of incentivizing governments. Whether by profits or other means.
when it comes to improving QoL, govt is more efficient than for-profit corporations. Govts try to improve QoL while corporations are focused on maximizing profits often at the expense of the consumers. Markets fail to fully punish companies that take advantage due to information asymmetries. Govts solve the many failures of markets
For-profit companies are efficient, but efficient at profit-maximizing, not value-producing. And sooner or later, profits are maximized by harming the citizens.
When companies are given a monopoly over force they can use this to create monopolies and monopsonies that hugely increase profits at the expense of the health, freedom, and livelihoods of the workers and general public. That's how you get company towns that own the mines, the houses, the police, and pay in their own company scrip only valid at the company store.
The East India company was great at extracting resources. It was even great at building railroads to extract resources. It was great at becoming a monopoly and selling opium and slaves. It was not so great at preventing famine or caring if lots of people died.
Selling opium and slaves and waging war on China to sell more opium will always be more profitable than not doing it. And if shareholders are unchecked and rewarded for choosing profits rather than citizen's lives, they will follow their incentives.
I think the first problem is that you can't opt out of government and you can't shop around. If there was a system where the US got rid of the federal government, and each of the 50 states became independent for-profit governments, and everyone had complete freedom of movement, then it could begin to work.
The second problem is that one of the biggest purposes of government, military protection, doesn't work so well with competing for profit governments. Say all the member countries of the European Union became for profit governments, and the EU itself only remained to ensure free trade and freedom of movement, nothing else. A belligerent country, like an hypothetical competent Russia, could pose a massive threat to a for-profit government that's ultimately controlled by disunified shareholders and not a strong executive.
The problem I'd have with this (and Yarvin's) is that there are so many interlocking externalities in the world that many fields are quite hard to rationally calculate a profit on. The "easy" fileds are run by private orgs, the "hard" ones are left with govt. In short, I think it's non-trivial to design a for'profit govt.
It is true that while a government might have a monopoly locally, there is still competition between governments. A problem there is that such competition is a slow process - leaving the door open for governments to enslave and exploit their citizens in the mean time. To avoid going off the rails at the hands of a greedy dictator, many countries have within-government competition - with rival political parties. Part of the idea is to limit the scale and duration of the monopoly power of the government - and so avoid negative evolutionary trajectories and bloody revolutions. As Robin notes, many people hate the idea of a monopolist ruling party exploiting them as much as possible in order to to enrich themselves. If the hatred of the population is too high, then there's a revolution and a new political system is installed.
He was saying customers can move around.
As outlined in an old comment I made, you do it by requiring gov officials to be invested into an asset class (Stateshares) sufficiently enough for an official to care more about that asset class rather than accruing other capital like income, bribes, laziness (rent-seeking), etc.
You can search for Contingentative Capitocracy for more details.
I like the idea, and the low but realistic taxes & regulations, even the push for hiring Hondurans on the island - but WHO are the people making decisions? How are they paid? What is the business/ gov't plan? What do we get for (not so easy to find cost of) $130?It's true that folk don't like the idea of a for-profit gov't with a monopoly on force - so one aspect should be what is the explicit social.Where are links to some of the "bad press"?Are you, Robin, doing any business there (like publishing an e-book or anything)? Lots of us are interested.
"Businesses can take over the role of government" is typical ancap propaganda, not obviously confirmed by deeper analysis.
Your last paragraph gets to the point. Since private companies are likely to fail at the same time in the same way, governments can provide a backstop and bail them out.
GDP per capita growth in India under the EIC was very poor. Its rule finally ended with a revolt.
That doesn't seem like a great analogy. A business can uproot itself and move downtown if it finds a better location there. However, a government can't go and occupy western China if it thinks it would do better there. The difference could be described in terms of governments having more geographic inertia. Governments can't easily move around. All the other territories are already occupied. Attempting to move to another location is generally viewed as a hostile military act and opposed by international law.
Most firms who have a physical location have "monopoly" property rights over that location. Even so, they compete with other locations. Same would be true of for-profit nations.
Corporations work as well as they do partly because they are prevented from becoming monopolies that face no competition - and can then behave badly without fear of negative consequences. With governments, it is not clear how this "anti-trust" role would be played. It seems as though they would have a monopoly. Then the issue is how to make sure they don't abuse this role. For example, one approach is to time-limit the monopoly power and then have regular reviews to see if people think the government needs to be replaced or overhauled. Corporations typically don't face this issue, since if they get too big and powerful, the government breaks them up.