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Comment by mcknz | Hacker News Reader

It's not like the entire tax goes into a black hole -- it would be interesting to see what the return is on the average tax rate: how much benefit is derived from state, federal, and city services (roads, water, security, libraries, parks) and benefits (unemployment, social security, disability).

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It's not like the entire tax goes into a black hole

It's arguable that we'd be better off were that so... part of the tax burden is all the people employed by those taxes who don't actually contribute anything to society on net (that is, whose jobs wouldn't be done at all on the free market)... in this way, taxes can have something like double their cost in harm, potentially.

Citation, please.

http://en.wikipedia.org/wiki/List_of_United_States_federal_a...

If you can find even a single agency on that list which performs a function you wouldn't be willing to pay for, the rest of my comment follows for you, specifically: that agency is a net cost to you comprising both the taxes you pay to fund it (proportionately) and the decrease in wealth caused by keeping those people from contributing to the economy by doing something productive. This isn't specific to the US government, of course; that's just the easiest example.

Not beneficial to me personally does not mean "people ... who don't actually contribute anything to society on net", and it would take more research than I have time for to completely dismiss any US federal agency (except perhaps the DOD).

I think the fact that a job wouldn't be done in a free market system is not a justification for saying that they don't contribute on net. The free market doesn't lend itself to funding a lot of work that is still worth doing - basic research being an obvious example.

I'm not sure that's the case, since I'm not sure if government-funded research was more of an effect or a cause of the decline of privately-funded research.

Really, though, it's hard to find credible reasons why companies would fund fundamental (say) physics research, isn't it? The benefits of such research are often felt decades down the line.

Companies and individuals have certainly funded activities with decades-later payoffs before. If it's not currently done as much, it may be partly because the decades-hence future is more uncertain than it used to be, for both technological and legislative reasons. Again, I don't see an empirically obvious answer.

However, I think there might be a naming problem, here. If it seems likely to have practical applications at some point, it's not "fundamental" or "pure" research anymore. Companies doing research into quantum computers or molecular assembly are certainly doing so because they expect to make a profit on it eventually, but the very fact that they have this expectation means that it's disqualified from fundamental research. I still think that there are examples of companies funding general research on the assumption that something will come of it, but it's hard to disentangle the effects of government. The most prominent example, Bell Labs, was run by a government-supported monopoly, for example.

I can think of quite a few technologies that are the unforeseen side-effect of some government funded research, and would have probably never occurred otherwise. For example MRI, the Web, and the Internet. I would imagine quite a bit of research on green technologies and so on have also mostly been government funded until recently.

Companies mostly fund research that brings immediate results. Sure, some (like IBM) may be looking further down the line, and some probably just subsidise some research as PR. But areas where there is no clear advantage and in addition carry a large risk, are mostly shunned by corporations.

I'll concede that's true for government agencies where the work could be done more efficiently in the for-profit world (say the USPS), but there are plenty of agencies whose jobs "wouldn't be done at all on the free market" because there is little profit motive, but are essential none the less. Could you imagine regulatory agencies (SEC, EPA) as for-profit entities? Job and Family services?

There are some private regulatory agencies already - certificate authorities, for example. Seems to pretty much work.

Then there are the ratings agencies (Moody's, S&P) who did such a great job during the crisis, but that's another topic altogether... :)

Well, the SEC and EPA have similar recent failures to point to, to be sure. :)

They had strong government protections. Smaller ratings agencies like Egan-Jones have a much better record--but they lack the same legal advantages.

Airlines wouldn't exist in the "free market". Are you arguing that air travel has no net value?

Citation needed, Southwest is quite profitable, can you explain what they are getting in subsidies (I just may be unfamiliar with your argument).

I think he means that it's a property rights and safety issue, not a financial one.

http://hasbrouck.org/blog/archives/001001.html

I'm willing to entertain the argument, though I'm not familiar with any arguments that airlines are inherently unprofitable without using force on someone.

Depends on where you are. Airlines wouldn't fly into rural North Dakota because it would simply not be worth their while. That doesn't mean that people supporting energy and agricultural production don't need to fly. If you weren't subsidizing them with your tax dollars, you would be with your airline tickets. This would probably lead to fewer people flying, less tourism dollars, etc. thus requiring the government to come in and subsidize them again :)

If you took the government out of the airline industry now, the country would look very different.

This is an interesting idea. What jobs would not exist on the free market? Let's just take, for example, a traffic engineer. Someone whose job it is to make sure the network of roads runs smoothly, interconnects between states and more or less provides a consistent infrastructure for the transportation of goods. It's quite possible this wouldn't exist in the free market, just look how long it's taken to standardize the web. Of course, we were able to standardize on TCP/IP, but that was probably government influence.

I'm not trying to troll, but I'm curious how different the world would look if we left things like infrastructure to the free market.

Funny you mention the internet (TCP/IP, etc). That's one thing I'm glad the government--be it university funded researchers and DARPA among others--took care of. I can't imagine a large Telco designing the internet. We certainly wouldn't have net neutrality and the Googles would probably not exist.

> it would be interesting to see what the return is on the average tax rate

You won't see it. It's not possible to know how receivers of government action value it without selling them for a price (ie, not being government action).

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