I'm glad you aren't insisting that there is a free lunch, there isn't generally: we can call manna a once in history exception.

I have no dellusions that private control is not a perfectly effficient method of resource allocation. I have no idea why you suggest that I have a naive belief in private control. But since you jumped to that conclusion, without cause, I will remind you of Hayek's dicusssion of the “fatal conceit” of most governmental planners who fail to understand that information is costly and that dispersed decisionmaking taps into much more information than central planners possibley can. I hope that you are not so conceited, but I'm not sure at this point in the conversation.

As for free lunches, expanding public goods in a recession is freer than you think. You ignore unemployment compensation, food stamps, health care, and the bail-out of banks that extended loans to firms that had to shut down because of a lack of opportunities, as well as the myriad of other social programs provided by both government and private sector charities. Those costs are eliminated by putting the resources to work expanding public goods.

You have a naïve belief in the efficacy of the private sector. Remember the Biblical injunction not to find the speck in the eye of someone else (government) without first removing the log from one’s own eye (private sector).

About “free lunches” I do not think I am mistaken; if you think I am wrong I suggest that you try wishing for manna to appear and report back if you are successful. I won't hold my breath.

I'm glad you aren't insisting that there is a free lunch, there isn't generally: we can call manna a once in history exception.

I have no dellusions that private control is not a perfectly effficient method of resource allocation. I have no idea why you suggest that I have a naive belief in private control. But since you jumped to that conclusion, without cause, I will remind you of Hayek's dicusssion of the “fatal conceit” of most governmental planners who fail to understand that information is costly and that dispersed decisionmaking taps into much more information than central planners possibley can. I hope that you are not so conceited, but I'm not sure at this point in the conversation.

As for free lunches, expanding public goods in a recession is freer than you think. You ignore unemployment compensation, food stamps, health care, and the bail-out of banks that extended loans to firms that had to shut down because of a lack of opportunities, as well as the myriad of other social programs provided by both government and private sector charities. Those costs are eliminated by putting the resources to work expanding public goods.

You have a naïve belief in the efficacy of the private sector. Remember the Biblical injunction not to find the speck in the eye of someone else (government) without first removing the log from one’s own eye (private sector).

About “free lunches” I do not think I am mistaken; if you think I am wrong I suggest that you try wishing for manna to appear and report back if you are successful. I won't hold my breath.

You are mistaken. The uses of resources of today are not comparable to what those resources can be used for in the future. Technological change can make capital equipment obsolete and the equipment can deteriorate due to age and weathering. Workers’ skills can deteriorate, workers can become too old to work, and there may be no demand for the skills of today because of technological change in the future. Many of today’s unemployed resources will never be used again and that is a loss to the country and a tragedy for the families involved.

Using unemployed resources that we have now in a productive manner, rather than leaving them idle for some uncertain use in some uncertain time in the future, is an act of rationality. Their use in rehabilitating and expanding the stock of public goods will add to productivity and the savings generated from that will make more capital available for private firms in the future.

You are mistaken. The uses of resources of today are not comparable to what those resources can be used for in the future. Technological change can make capital equipment obsolete and the equipment can deteriorate due to age and weathering. Workers’ skills can deteriorate, workers can become too old to work, and there may be no demand for the skills of today because of technological change in the future. Many of today’s unemployed resources will never be used again and that is a loss to the country and a tragedy for the families involved.

Using unemployed resources that we have now in a productive manner, rather than leaving them idle for some uncertain use in some uncertain time in the future, is an act of rationality. Their use in rehabilitating and expanding the stock of public goods will add to productivity and the savings generated from that will make more capital available for private firms in the future.

Imagine that for whatever reason, sheep only lived in Australia. If Australia banned the export of sheep (or made it pricey enough through tariffs), then yes, Australians would get to enjoy all the sheep.

However, by allowing sheep to be exported, now the rest of the planet can also enjoy sheep. Can this raise the price of sheep? Of course. But Australia as a whole isn't losing out: they are getting paid for the sheep that have been purchased. With the price of sheep going up, they're getting paid even more. So Australians get more money, and the rest of the world can enjoy the sheep for their wool and deliciousness.

That additional money earned by Australians isn't burned in effigy either. It's used to purchase additional goods from the outside, such as the computer you are typing your reply from, or the iPod that plays your music, or the car that gets you around.

Without the sheep export, you may be able to enjoy more sheep, but you'd have to endure with fewer other goods.

Additionally, sheep isn't put up for “export first”, whatever that means. Same for any other good produced. If you have a business, apart from shipping costs, do you care where the person who buys your product lives? If someone pays more for your sheep, is it a surprise that you would prefer to sell him your goods compared to someone who pays you less?

You can apply the same analysis to any other industry.

There aren't many jobs left in the textile industry either (certainly as a proportion of the total population). We're all much richer for that.

Jobs are a cost, not a benefit.

To give an example: Australia is a major producer of sheep and cattle. Over a period spanning 35 years the price of lamb has gone up and up and up, such that lamb is no longer an affordable every day commodity. Instead of supplying the domestic market, the lamb is placed on the overseas export market, as live sheep. This live sheep export hurts jobs here in Australia, as well as taking away produce from the domestic market.

In that same 35 years we have seen a decline in a lot of the industries that were our backbone – steel, other forms of farm production, other minerals. A lot of jobs in our traditional industries such as in manufacturing have disappeared, and gone over seas.

The thing is: a lot of the industries have disappeared as tariffs have disappeared. The cost of importing many items was drastically reduced meaning that the domestic market could not compete. One reason for this lack of competition appears to be due to the labour market where the price of labour is kept artificially high due to union influence, or even due to the introduction of better and more efficient techniques for production.

Imagine that for whatever reason, sheep only lived in Australia. If Australia banned the export of sheep (or made it pricey enough through tariffs), then yes, Australians would get to enjoy all the sheep.

However, by allowing sheep to be exported, now the rest of the planet can also enjoy sheep. Can this raise the price of sheep? Of course. But Australia as a whole isn't losing out: they are getting paid for the sheep that have been purchased. With the price of sheep going up, they're getting paid even more. So Australians get more money, and the rest of the world can enjoy the sheep for their wool and deliciousness.

That additional money earned by Australians isn't burned in effigy either. It's used to purchase additional goods from the outside, such as the computer you are typing your reply from, or the iPod that plays your music, or the car that gets you around.

Without the sheep export, you may be able to enjoy more sheep, but you'd have to endure with fewer other goods.

Additionally, sheep isn't put up for “export first”, whatever that means. Same for any other good produced. If you have a business, apart from shipping costs, do you care where the person who buys your product lives? If someone pays more for your sheep, is it a surprise that you would prefer to sell him your goods compared to someone who pays you less?

You can apply the same analysis to any other industry.

There aren't many jobs left in the textile industry either (certainly as a proportion of the total population). We're all much richer for that.

Jobs are a cost, not a benefit.

To give an example: Australia is a major producer of sheep and cattle. Over a period spanning 35 years the price of lamb has gone up and up and up, such that lamb is no longer an affordable every day commodity. Instead of supplying the domestic market, the lamb is placed on the overseas export market, as live sheep. This live sheep export hurts jobs here in Australia, as well as taking away produce from the domestic market.

In that same 35 years we have seen a decline in a lot of the industries that were our backbone – steel, other forms of farm production, other minerals. A lot of jobs in our traditional industries such as in manufacturing have disappeared, and gone over seas.

The thing is: a lot of the industries have disappeared as tariffs have disappeared. The cost of importing many items was drastically reduced meaning that the domestic market could not compete. One reason for this lack of competition appears to be due to the labour market where the price of labour is kept artificially high due to union influence, or even due to the introduction of better and more efficient techniques for production.

Again, governmental production of “public goods” CAN lead to higher rates of economic growth. But there are caveats: 1) The production must be on public goods (so the issue of governmental identification of public goods arises). Examples of things called “infrastructure” that are not abound, from large airports in low air-demand areas to signage declaring “This Highway built with Stimulus Funding”. 2) Whenever government produces anything the production is guided more by governmental forces (bureaucratic/political) than by market forces (prices/profits). That is, visible government planners are substituted for the private sector's invisible planners (again, prices and profits). The “fatal conceit” that Hayek highlights properly cautions that it is generally “fatal” to end results to presume that central planners can make decisions that are informed as fully as decisions made by emergent market processes. Friedman makes a similar point with his discussion of the “four ways to spend money”: a) you spend your own on you; b) you spend yours on someone else; c) someone spends someone else's money on himself; d) someone spends someone else's money on yet someone else. Friedman points out that the least direct way, the one least likely to economize with care, is (d):This, of course, is the one that applies when government spends.

Expanding infrastructure and rebuilding the deteriorating roads and bridges are needed, as are other public goods. Rehabilitation and adding on to the stock of public goods are complements to other resources in the economy and will increase their productivity. What more opportune time to add to public goods than now when unemployment is so high and capital equipment is mothballed?

That's a rhetorical question, yes?