Here’s an amazing story from CNN because it’s so ordinary. It’s about a top-down govenrment initiative that sounds good–giving more broadband access to Americans. Who’s against more Americans getting broadband? The FCC has a plan to get it done. Go Broadband!
So here’s the story. (HT: Best of the Web)
Like a photographer without a camera, or a mechanic who doesn’t own a car, Kelli Fields is a webmaster without high-speed Internet access.
By day, the 42-year-old uses a broadband connection at work to update a university’s Web site, which she built and codes from scratch.
But when she goes home at night, the rural Oklahoman struggles with a dial-up Internet connection so slow, she does chores to pass the time while Web sites load. Her high school-age son is so fed up with the glacial pace of their Internet connection that he asks his mom to update his Facebook page from the office.
That sounds frustrating. But is this a serious social problem the government needs to fix?
“It’s pretty sad that he has to ask me to accept his friends when I get to work,” said Fields, who rarely uses the home computer for anything but word processing.
On Tuesday, the U.S. Federal Communications commission will unveil its much-awaited “broadband plan,” which, among other things, will explain how the government plans to get nine out of 10 Americans online by 2020. That’s no easy task, considering less than two-thirds of people in the country have high-speed Internet access at home today, according to a 5,005-person survey published by the FCC in February (PDF).
The Obama administration’s 2009 American Recovery and Reinvestment Act has put $7.2 billion toward high-speed Internet expansion and has required the FCC to develop a broadband plan.
Taking a personal look at unwired America, however, reveals just how complicated getting people online can be. That’s partly because there are so many reasons people still don’t have high-speed Internet access at home.
I’m sure it’s complicated but somehow, almost 2/3 of the American people have managed it. And it must be tough in rural Oklahoma to get broadband so no wonder this story illustrates the need for a national broadband effort, right?
Some, like Fields, don’t have money for the connections, or they live in parts of the country where broadband hookups are not available. Fields lives outside of Catoosa, Oklahoma. Neighbors less than a mile away have high-speed Internet access, but the fiber-optic cables that connect homes and apartments to the high-speed Web haven’t reached her house.
Yes, it would be nice to get broadband via a fiber optic cable. And so close. Less than a mile away. Is there another way to get broadband? Yes there is:
She could install a satellite and connect to the high-speed Internet, but the installation fee is $300, and she said she can’t afford that right now. She’s been waiting for wired broadband to come to her home for five years, and she holds out some hope that the network will get to her eventually.
She’s awfully patient. And poor, I guess. For a mere $300 she can make her son happy and she can have broadband for herself. But she doesn’t have the money. Keep reading:
About 4 percent to 5 percent of American households similarly are in places that aren’t reached by broadband cables. And 36 percent of the unwired population cites cost as the main reason for not connecting to the Web, according to the FCC survey.
Other unwired people are afraid of the Internet, or they simply don’t understand why it might be important to bring broadband into their lives.
Cue the violins:
Florence Pearson, a 62-year-old from New York City, said she was afraid of computers. If she touched one, she thought she would break it. “I was embarrassed, not knowing anything at all about computers and not having an e-mail address,” she said during a presentation at an FCC event last week.
Wish I’d have been there. Dogs and ponies everywhere.
“I knew I was missing out on so much, but I could not get over this fear.”
Pearson’s daughter convinced her to take a computer class, she said, and that helped her realize that she could work more efficiently with the help of computers and the Internet.
“It was like an entirely new world for me,” she said at the event.
OK. Her daughter took care of her. So why do we need a national program?
It will take more than an improved broadband infrastructure to get people who aren’t familiar with computers to go online, said John Horrigan, director of consumer research at the FCC. The federal government on Tuesday will propose programs to help educate people about the Internet and increase Web access in public libraries, he said, but he cautioned that none of those will be a quick fix.
“Nonadoption [of broadband] is not the kind of problem that lends itself to overnight solutions,” he said, “because you’re trying to train people. You’re trying to get them to change their behavior.”
In the recent FCC survey, which Horrigan authored, 22 percent of people without broadband access said fears of the Internet and a lack of understanding of computers were the main reasons they didn’t have broadband at home. Nineteen percent said they viewed the Internet as a “waste of time” or didn’t see its relevance to their lives.
And a 2009 survey, from the Pew Internet & American Life Project, found the majority of Americans who don’t have broadband at home don’t want it.
But broadband is becoming essential for modern life, Horrigan said.
Ah, he knows best. Some people think the internet is a waste of time or not worth the money. We’ll give it to them anyway.
Many job applications, for instance, are not available on paper anymore. And health records and information are increasingly moving online. Those who don’t have access are at increasing risk of being left behind.
“Giving its growing importance as a necessity, that creates an even more isolating effect for those who are offline,” he said.
The FCC’s chairman, Julius Genachowski, has written online that the nation’s broadband plan will include programs aimed at “making sure that every child in America is digitally literate by the time he or she leaves high school.” The idea is to teach kids why they need the Internet.
Funny, I just have a feeling kids are pretty on top of that one. But let’s get an ad campaign going.
At first, it may be easy to write off Fields’ situation in Oklahoma as insignificant because she does have dial-up Internet access at home.
Oh, right, she does have internet. It’s just slow. That’s like so 1996.
But the speed difference between dial-up connections, which use telephone wires to transmit signals, and those that travel through fiber-optic broadband cables is significant, Horrigan said.
That’s because the Web is increasingly designed for broadband connections. Photos and videos are everywhere. So are Flash animations. The result is that dial-up connections have actually gotten slower over time, according to Horrigan.
“If you were a contented dial-up user five years ago because you liked to check e-mail and get some headlines, that’s probably a slower process today, given that sites are optimized for broadband,” he said.
Fields says her slow connection at home is particularly a problem for her kids, who need fast Web connections to keep up in school.
Her daughter, for example, sends text messages to her mom while she’s in the office, asking her to conduct Google searches that she’s required to complete for her homework.
Get it? It’s for the children. Those poor kids aren’t going to get a good education. The next thing you know, the Chinese are going to pass us. Gotta have a broadband plan. Top-down, baby. For the children! We’ve got to keep America competitive!
The slow connection may affect family finances. Fields said she has turned down Web development projects because she simply couldn’t do them from home.
“It would just take me forever,” she said.
We need broadband to keep America prosperous!
Her dial-up connection also has caused some issues with her current job as the webmaster for Rogers State University, in Claremore, Oklahoma.
When classes are canceled because of bad weather, for instance, Fields has to ask another employee to update the Web site to tell students not to come to class. She can’t do so from home.
“It is ironic,” she said of the fact that she’s a Web site manager who doesn’t have high-speed Web access. “It’s very strange, and people like you are like, ‘What? I don’t understand?’ They kind of laugh at it.”
Fields is considering scraping together the money to get satellite Internet at her house.
It does seem like a good idea. Her job is suffering, she’s losing money, and her kid is falling behind in school. But I guess she just can’t afford it. Who wouldn’t want to help her?
But she doesn’t want to give up services like TV to free up money for an expensive Internet connection.
We’re about 1000 words into the article at this point. There really is not story here. And no national crisis. Evidently Kelli Fields thinks TV is more important than broadband. Evidently watching TV is more important than doing her job well, finding outside income opportunities and keeping her kid current with homework. Or maybe, just maybe, the hardship of a life without broadband is being exaggerated for the story. And the country.
The weirdest thing is that if we really think this is a problem we don’t need a national plan. We could just subsidize rural folks purchases of satellites. But that wouldn’t help whoever the bootleggers are in the national plan.
The story concludes:
She realizes that without broadband, her family is missing out on a lot.
“It really has just become a way of life, like you have to be connected all the time,” she said. “And I don’t feel that need to be connected through Facebook or news stories. I don’t feel that need to be connected all the time, but when I need [Internet access,] it would be nice to have it.”
Yes it would be nice. It’s especially nice when someone else pays for it. Government thrives by handing out free lunches. The problem is that the bills keep coming and we don’t have enough money to give out all that free food. Someone needs to make choices and trade0ffs. Kelli Fields made her choice. Maybe that tells us something about the relative urgency of the problem.
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Not only do they want spend outrageous amounts of money on laying life-bettering broadband pipe to the masses, they want to use the guise of “net neutrality” to force cable companies and telcos to offer their internet service at a federally mandated (artificially low) rate. So much for property rights!
Hopefully Kelli Fields and others will be watching Reason TV on their new state of the art fiber optic line courtesy of the US Taxpayer!
Yeah, I looked at the site and it isn't as egregious as I expected. In fact, I'm surprised she's having problems accessing it from home if she's dialing up at even 33.6. Makes me think it's not so much the fact that she has dialup as the fact that her phone lines are 90 years old and so staticky she can't connect at better than 9600 baud or something. Of course, it would probably be cheaper to get broadband than repair that.
There are plenty of workarounds for low bandwidth, especially for a professional: She could install a copy of her school's web server on her home machine and preview changes there (uploading the finished files is a batch process, she can just start it and go to bed. In fact, I certainly hope she isn't making changes directly to a published web site.) She could remote desktop/Citrix/VNC into her work machine or the server. Multiple options.
But development isn't what she's complaining about, she's complaining that she can't even post an update saying that school is canceled. That's not testing whether a javascript app is working properly or a page loads, that's entering text into a field.
Again, I have to guess that she either isn't getting modern dial up speeds or she's impatient. Both are her problem, neither elicit any sympathy from me. In fact, it makes me think that if this is the best example the FCC can come up with, they're seriously reaching to create a mountain out of a molehill.
Admittedly, I'm a network engineer so about 2/3 of my day is dedicated to people who have “slow networks” and I have little patience with that type of complaint.
No matter how fast your connection, any economically feasible speed will leave you wanting more. Partly it's because the more you have the more you want. (“What do you mean I can't download 10 torrents, stream internet radio and play Modern Warfare II at the same time?”) Pertly it's the same problem with expanding highways: The more you build, the more they will be used either by cars or by more and more intricate websites and other media.
Giving the government credit for the internet is like giving Christopher Columbus credit for America.
As for any tinges of guilt – not a one. Why should I feel guilty about using a system of exploitation to my advantage? I didn't create it and I have no way to avoid it. My preference would be to end the exploitation, but as that is very far from likely, and because it is people like me that they exploit, I see no reason not to take back whatever I can whenever I can.
In Webster's the word market has many definitions which supports my statement that the word or concept is nebulous. The word fits many situations, none of which carries the certainty that would allow you to determine success or failure.
The initial definition is: Market: 1 a. a meeting together of people for the purpose of trade by private purchase and sale and usu. not by auction.
For the purpose of understanding we agree that the word people means 2 or more individuals, which is what is needed for trade or purchase. There is nothing in the definition that speaks to formality in anyway. Which means we also see that the meeting place is not clearly stated, it can be anywhere.
Taking it back to an even more rudimentary level, I offer video services so I consider myself to be a market. If, beginning today, no one accepts my offer of service for whatever reason, lack of quality, tardiness, unrealistic compensation demands, etc.; and, I am unable to find any work as a videographer, did the market fail me, or did I fail the market?
In my view, I failed the market (I failed myself), because the market is still there and functioning for other videographers.
What is interesting is that the definition of the word market is actually so nebulous, it is difficult to pin down any solid meaning. So, if we can not even say with certainty what a market is and always will be, I think it is apparent that we will have trouble when we wander off the reservation and claim there is market failure.
The housing market in the USA did not fail. There are houses out there for sale and there always has been, companies are still continuing to build them. Any one of us can buy one if we can match the offer placed on a house (show we can pay for it). Fewer people can buy one, but that is their fault not the fault of the market.
A bit of wisdom here: “I complained about the price being to high; but, a wiser man than I said to me, “Your problem isn't that the price is too high, your problem is that you can't afford it.”
So what failed? People failed, from government officials, lenders who allowed themselves to be browbeaten by government, to individuals who failed by extending themselves beyond reason to live in homes they knew they couldn't afford, and by refinancing to use equity in plain silly-ass ways such as buying luxury goods and services.
You said this: “If a market isn't perfect, i.e. doesn't generate the maximum social welfare, it fails.”
I don't understand how you come to think that a market exists to generate maximum social welfare. As the definition above shows, a market is created when two people meet to dicker, deal, and trade. I can see you claiming that a market can generate individual satisfaction.
You see but the more we use the nebulous words the deeper into doodoo we get.
Look at the concept of market generated individual satisfaction that I spoke of, it can mean two things.
If you and I meet and create a marketplace in my driveway to dicker, deal, and discuss trade of my used car for your used money and we can not come to a meeting of the minds, both of us realizes market generated satisfaction. I still have my used vehicle to sell and I still believe I can find some one who will meet my offer. The marketplace, the market, worked for me to my satisfaction.
You should realize individual satisfaction as well because you left the marketplace with your money still in your pocket and you can look for another vehicle that when purchased will not leave you financially extended.
The market did not fail, it was successful in generating individual satisfaction. Not what we expected maybe, or hoped maybe, but I can see no way to call it a failure.
Now, suppose you extend yourself and we trade my car for your money as a down payment and a promise of 6 monthly payments of X dollars. In two month's time you've defaulted on a payment and I repo the car. I don't see that as a market failure. I have your money and the car; and you failed the market, the market did not fail you. you had what you bargained for but lost it because of your inability to hold to the terms.
Look again above at the definition of market and ponder on the words, “meeting together of people for the purpose of”. Purpose, the word speaks to many things, does it not? To me it means the winnowing process that separates those who can buy and those who can not. So whether trades are made or not, the market is a success.
Sowell is a very bright individual and expresses himself very well to boot. I do not consider myself in his class.
But I pulled these two quotes, one from my post above, and the one by Sowell you led off with, and pasted them on my word page so I could look at them together as it struck me that I saw similarities.
“Perhaps my problem is that I am ignorant enough to think of the concept of market as being rather nebulous in form, if it can even be said to necessarily have a form and I do not believe it does; and, a place where two opposing parties approach and dicker and deal until a sale is either consummated or rejected.”
“Sowell said, the market is a way for getting people to respond to other people's desires. It is people interacting with one another. Invisible with all that interacting are the signals and feedback sent between one another that propagates to others. Those are tough to see, but are real.”
Frankly Sowell said it better and more elaborately, but I see what I said in his quote.
I see the market as a tool because to me a tool is something I use to accomplish a task or goal; thus math is a tool, flattery is a tool, judgment is a tool, prejudice is a tool, anger is a tool, techniques or skills are tools, knowledge is a tool, the market is a tool, etc. ad nauseam.
You might consider a physical tool, such as a screwdriver to fail you either by eventually wearing out (hard to conceive but possible), or by breaking through what you think should be sustainable stress. I would be reluctant to argue with you on that.
But, when the tool is a concept, such as market, math, flattery, etc. and your use does not result in the positive thing you tried for, I would be more apt to lay the blame of failure on you rather than the tool, because we know the market works, math works, flattery works, but their successful use depends absolutely on the use by the individual. Flattery does not fail you, you fail at flattery, thus you do not accomplish the task or goal of taking that waitress home after closing time.
My “Iceberg” theory of social observation fits here as a reply.
I am sure that you know when on open water and you spot an iceberg that you are seeing only ten percent of the total iceberg. Under the water is a huge chunk of ice, or social change in my analogy.
By saying this: “We are developing an entitlement mentality”, you have spotted the tip (10%) of the iceberg; but, by completing the sentence with this: “which, if not countered, will cause our decline.”, you tell us that you don't comprehend the hunk chunk of social change that is already in existence.
In short sir, we already have developed an entitlement mentality and it is already causing our decline, to be accurate you must think of it in terms of restoration, not prevention.
Any time you spot a change in the mores or fads of your society, that change has intruded onto your conscious, you have seen the tip of the social iceberg; and, due to the size (number) of the people, you haven't seen but are there, now participating in that change there is no way you can “stop” it or prevent it from spreading even farther.
Guaranteed that if you apply vidyohs “iceberg theory” to your observations in the future, you will see it develop out just as I said. By the time you spot it, it is already too late.
This:
“I mean, personally, as a liberal who is”
Tells me exactly why you'd be foolish enough to say this:
“We can watch as the magical force of the market fails to deliver services such as roads, telecommunications, and mail to areas such as Oklahoma, Nebraska, Iowa, North Dakota, Wyoming because it is difficult to make a profit in doing so”.
Market: 1 a. a meeting together of people for the purpose of trade by private purchase and sale and usu. not by auction.
The people who choose to live in remote rural areas offer no meeting for the purpose of trade, nor do they offer any incentive for the service provider to meet with them until they have something (money) to pay the provider for its services.
And, it is whose fault?
You as a liberal think it is the provider's fault that people choose to live remotely, and you think it is our responsibility to give them the gift of any service they could enjoy if they weren't remote or were actually willing to provide for themselves using their own money.
Of course, as a liberal (with all the negative intellectual baggage that entails), you are dead wrong and living in that la la loony land where socialist all dwell.
Doesn't America have any internet cafes? They are cheap as hell and the connections are fast enough to do basic stuff.. The video sites do take some time to load but thats about the only problem we face.
Just another way to buy votes and make friends of Congressmen rich.
>>Giving the government credit for the internet is like giving Christopher >>Columbus credit for America.
This analogy does not hold up. No one just happened to stumble upon the internet and discover it. The internet was a far from certain or even predictable development. Not until Vinton Cerf's pioneering work with packet based communication (embodied today in the TCP/IP protocols without which the internet, the web, and this blog would not exist)
Vinton Cerf was a program manager with DARPA. He has a web page (http://netvalley.com/archives/mirrors/cerf-how-...) “How the Internet Came to Be” where he states:
“When I started graduate school, I was originally looking at
multiprocessor hardware and software. Then a Request For Proposal came in from the Defense Advanced Research Projects Agency, DARPA. The proposal was about packet switching, and it went along with the packet-switching network that DARPA was building.”
What if that proposal from DARPA never happened ? Would the internet have emerged from the private sector? I doubt it. But I'm sure there are those would argue that if Roosevelt hadn't spent the money on the New Deal and WW2 we could have had the internet by 1950.
>>Why should I feel guilty about using a system of exploitation to my >>advantage?
Ah, I see, you're a helpless victim and that justifies you're behavior no matter that it perpetuates a system you abhor.
That's right. I'm a nearly helpless victim. The political class has always exploited the productive class, probably always will, there is not much I can do about it, and of course I abhor it. My behavior, though, is a rational response to living in an environment in which the exploiters make the rules. They exploit me to the best of their ability, and so I exploit them to the best of my ability. C'est la vie. Does this perpetuate the system? I don't think so. They want a system in which only they exploit, not one in which they are exploited in return, and it is this counter exploitation that will make their system of exploitation unsustainable.
I'm a bit confused here. I thought you were asking for an explanation of market failure. I gave you the textbook economics definition, but now you're disagreeing with me and claiming a different definition. You're free to do so, of course, but using your own definition in a discussion with others can cause confusion.
You're correct that lack of exchange doesn't necessarily mean that a market has failed. If you are selling a car and the least you'll take for it is $6000 and the most I'll pay for it is $3000, then it is not market failure if I go home without buying the car. However, if the numbers are reversed – you'll take $3000 and I'm willing to pay $6000 – and I still go home sans car, that is a market failure. But even if I do buy the car (for say $5000), market failure could still happen, if 5 minutes after I leave, another buyer shows up who would have been willing to pay $8000. It is market failure because more social welfare would have been generated if you had sold the car to the other buyer.
I probably shouldn't have even tried to define “market”, and for that, I apologize. “Market”, in economic discussions, is a rich term like “god” or “country” that is hard to define and is probably impossible to completely define. Your Webster's definition is fine for “I'm going to the market to buy some bread”, but that definition isn't really complete for an economics discussion.
(Opening up a can of worms…) As for the mortgage market, it was a Ponzi scheme, which is basically a zero-sum game in which there is never a market failure. Some people profited, some lost, but the net change was zero. The potential market failure was due to externalities. Some of the players lost so much that they, on paper, were bankrupt. And the claim was that if these giant financial firms were allowed to go bankrupt, the entire financial system would collapse. This would not only hurt these firms, but it would hurt other agents who weren't even involved in the mortgage market. This is a negitive externality, one of the classic examples of a market failure.
For instance, compare the mortgage meltdown to widescale failing of internet companies around 2000 (commonly called the bursting of the dot com bubble). When the dot com companies went bankrupt, there were few externalities, so that was not considered a market failure, and the market was largely left alone to adjust. However, in the case of the mortgage meltdown, the powers that be (Bush, Bernanke, and Obama) decided that the negative externalities would be too great to allow the market to adjust on its own, so the government defined this as a market failure and got involved (or maybe I should say, even more involved).
But even though the mortgage meltdown is routinely called a market failure, from an economics standpoint, it's not so clean cut. The claim was that profitable non-mortgage businesses would suffer because they wouldn't be able to get loans (to meet payroll, expand their business, etc.) from the now bankrupt financial firms. Maybe that's true, and, if so, that's a negative externality and, therefore, a market failure.
But there's are other possibilities. Maybe these profitable non-mortgage firms had an inflated demand for their products because of customers who were spending the illusionary profits being made in the mortgage market. In that case, the suffering of these non-mortgage companies really isn't an externality. Or maybe the absence of the financial firms would allow other cash-rich entities to step in and offer the loans (probably at a somewhat higher interest rate), thus reducing or eliminating the externality.
So the case for whether the mortgage meltdown was a market failure is murky.
I can't speak for all of America, but where I've been internet cafes haven't really taken off because there are even better options. First, for those without laptops, there are public libraries which offer about the same speed connection as an internet cafe except for a better price – free. Second, for those with a laptop, many restaurants, especially coffee shops, offer free internet access through wireless connections.
Living in a rural area, these options may not be very convenient for Ms. Fields. In India, aren't there less developed areas where internet access isn't so easy to find?
I believe they are using the rural electrification program during the Great Depression as justification for this effort. Another example of those who know history are doomed to repeat it.
What if that proposal from DARPA never happened ? Would the internet have emerged from the private sector? I doubt it.
Packet switching was not unique to DARPA. From the wikipedia entry on Arpanet:
Somewhat contemporaneously, several other people had (mostly independently) worked out the aspects of “packet switching”, with the first public demonstration presented by the National Physical Laboratory (NPL), on 5 August 1968, in the United Kingdom.
The idea that we have the government to thank for the internet is ridiculous. The world wide web was a natural outgrowth of the data sharing and community popularized by BBS and dial-up networking sites like Compuserve and AOL. All of those were in common use before the internet became dominant.
Many different networking protocols were competing for market share in the 70s and 80s. Looking at your link turns up many private firms as well as academics involved in networking development: IBM, XEROX PARC, 3COM, AT&T.
The idea that we would not have wide area networking without government involvement is absolutely false. Would it look the same? Who knows. We can never know.
One only has to look at the inefficiencies, waste, and stupidity that infuse virtually all government endeavors to know that it would probably be far superior if the government had stayed the hell away.
I have no problem with people who take advantage of the government benefits for which they qualify. You and corecaptain seem to be defining this as exploitation, but the word “exploitation” has a negative connotation that I don't think is deserved in this situation. If the government thinks exploitation is occurring, it can change the rules limiting who qualifies for a benefit. But the normal government behavior is to change the rules to expand the population who qualifies.
But there is a potential problem. People taking advantage of a government benefit get used to it. Years after a government program is established, we often find out that it's not doing what it was originally intended to do, so we try to abolish it. But because people have gotten used to the benefits, they protest threats to take these benefits away. And sometimes they're even justified. Suppose someone on a tight budget purchases a house, depending on the mortgage interest tax deduction, but then there are proposals to eliminate the deduction. I think that person has legitimate beef – they played by the rules but now have to sell their house (and probably take a loss) because the government changed the rules. The solution is to gradually phase out the program so that current participants aren't harmed too much, but the failed program doesn't continue indefinitely. But even these phase out proposals receive a lot of criticism.
On the subject of the development of the internet, in the late 1980s and early 1990s, I was a heavy user of computer bulletin boards. These were privately run systems that users accessed via dial-up modems. And there were nationwide versions such as CompuServe and AOL that were gaining more and more users. When the internet grew into prominance, most users were accessing it with these same dial-up modems. So I don't think it's too much of a stretch to envision one or more of these companies evolving into something very much like today's internet. Perhaps Al Gore's invention pushed the evolution along a bit quicker.
But let's not forget the negative extenalities the internet brings. For instance, I spend so much time on a particular economics blog that I'm close to flunking out of economics grad school.
Actually, you can have market failures in a free market, you just tend not to get the kind of “failures” that are the definition when the media uses the term. In economics, a “market failure” simply means a market's inability to allocate resources to their peak efficiency possible. A market failure doesn't mean that a market isn't working, just that it is possible for more efficiency to be achieved that isn't happening by natural market forces.
Free markets fail all the time. There are four main categories of market failures, all of them arguably happen from time to time in free markets. One of the most popular forms are externalities, especially negative externalities like pollution. Even in completely free markets, private companies tend to create pollution as a by-product that affects other people, yet they do not compensate all of the people affected by that pollution. That is a “market failure”.
The proper case for free markets is not that free markets do not fail, but that for *most* things, there is no known alternative that is more efficient than free markets, even when those free markets “fail” to reach the peak efficiency possible. In other words, even though there are “market failures” all the time in free markets, the government almost always does an even worse job than free markets at managing that sector efficiently. Free markets aren't perfect, they are just the best system known to us, compared to every other known alternative.
Thanks Miles. I believe much of that that was my point – that what are often understood by the general public as market failures aren't actually failures caused by the market.
I think I have to somewhat disagree with your statement “for *most* things, there is no known alternative that is more efficient than free markets.” I would amend it slightly to say that there ARE often more efficient options than a completely free market, but because of the politics involved with arriving at a government solution, the government-imposed version of the option is often less efficient than the original free market.
I think this distinction is important because those who call for government action often have good intentions and shouldn't be demonized.
So maybe your statement should read “for *most* things, the government “solution” is less efficient than the free market.”
Good points. I think you sold me. I guess I could consider the market a tool. I certainly use it to get people to do stuff for me.
And, I agree with your original point, we shouldn't misplace blame on “the market”. That leads to ineffective and counterproductive government interference. Keep the blame where it belongs – with the people.
My use of the word “exploitation” is a bit different. The way I see it, our political system is inherently exploitive, therefore there is no way to take anything from it without participating in a system of exploitation. I am opposed to the system of exploitation, and so I view anything I take from it as counter exploitation. I take everything from it that I can… and more if I think I can get away with it, because the more that I and others like me take back, the sooner the system will collapse.
And in case you're wondering, this isn't ethics, its class warfare, and heads may have to roll before its over.
Lenze, I don't mean to be disrespectful or insulting, but your argument is a bit of an oxymoron. Essentially what you're saying, is that governments can be more efficient than markets, but the *nature* of governments make them less efficient than markets.
I think the problem with your argument, is that you aren't doing a valid comparison. For each approach to distributing resources efficiently, there is an *ideal* outcome, and a *real* outcome. In other words, when it comes to markets, there is the outcome we would *like* to see with markets, and there is an outcome that we *actually* see with markets. With government, there is the outcome that we would *like* to see with government, and the outcome we *actually* see with government.
In your statement, I think you are making the mistake of comparing what we would *like* to see with government, against what we *actually* see with markets. That is an invalid comparison.
If you are going to compare what is theoretically possible to achieve with government instead of what is really achieved, then you should be comparing that to what is theoretically possible to achieve with markets.
I think what is important to take from this, is that consequences are more important than intentions in the real world. I don't think you would want a blind surgeon practicing medicine and hurting people, just because you have the good intention of ending discrimination against the blind.
If people are in fact “demonizing” you about your intentions, then I would suggest you ignore them or advocate that instead, they demonize you for the consequences of your ideas, which is my approach. While you may advocate for intentions to hold more significance in a debate, I would argue for intentions to have less significance in a debate, especially when we are concerned more about actual consequences.
Seth, I didn't mean to ruffle any feathers, so if I did, I apologize. I was just responding to the part where you said “I agree with your point that market failures are caused by government intervention…”
My point was just to illustrate natural ways that markets fail besides government intervention, or that government intervention isn't the only cause of market failures. But, I should not have assumed that is what you meant by your statement.
Yep loads of places that still don't have access to the internet. But it was mentioned in the article that homes which were a mile away did have broadband connectivity and it is usually the case here that cafes will open up before individual homes can get their connections.
It seems we are destined to be in the same foxhole, but for different reasons.
My Webster's definition matches what Seth quoted from Thomas Sowell, and that seems to me to be just a tad higher standard than just going to the store to buy a loaf of bread.
But, how is buying a loaf of bread any different that buying stocks, bonds, securities, or any other investment? Someone has it for sale, and someone buys it.
Be it mo complicated than that? You obviously think so.
I think one should shop for his bread and for his investments with the same due diligence to avoid getting toxic crap with his purchase.
At least we seem to agree on one thing, trying to fix a solid definition to the word market, to the concept, is nigh onto impossible; but, I think I said that in my posts above.
Because you did not get what you wanted when you went to the market does not mean the market failed, it means you did not get what you wanted there.
Ahh but I have whacked this pony enough. The reason I respond as I do is that in my opinion you have spent a lot of words trying but you haven't made a case that there is such a thing as market failure.
I respect and appreciate your efforts; however, I am still looking for someone to give me that description of a market failure.
“internet access is a basic right”
What makes me weep profusely, is the tragedy of all those people whose rights were being violated before the Internet was invented.
“internet access is a basic right”
What makes me weep profusely, is the tragedy of all those people whose rights were being violated before the Internet was invented.
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