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Private prisons and munitions manufacturers, too.

Your general point speaks to a major source of corruption in the United States, which is often glossed over when well-meaning people push for increased government spending that will go to service providers rather than recipients directly, and is IMHO a vastly underappreciated argument in support of UBI.

One big answer to the unbridled graft in public-private partnerships is to nationalize such services and run them as public enterprises.

Well, that solves one kind of graft and opens the door to another. The history of Petrobras is a great example of the kind of corruption that can happen in state run enterprises. Chinese SOEs are another example. Transparency, audits, and open procurement processes are probably more useful at fighting graft than nationalization.

True, but that results in other problems - lack of accountabbility and control. Perfect example is the VA.

I think the ultimate solution is to simplify access to, and limit govnerment control of, all entitlement programs. The ultimate expression of that would be UBI - I'd even be in favor of a means-tested phase-out of the UBI.

After that's done, all we gotta do is fix the tax code...

> I'd even be in favor of a means-tested phase-out of the UBI.

This is a bad idea. A phase-out is indistinguishable from a tax in the same amount, but it harder to reason about and consequently tends to be implemented incoherently.

Suppose you have $10,000 basic income with a 20% phase-out rate and a progressive income tax with a 15% tax rate up to $50,000 and 25% thereafter. Then what you really have is a $10,000 UBI and an income tax of 35% up to $50,000 and 25% thereafter. Probably not what you wanted, right?

Much better to have a $10,000 UBI with no phase out and a flat 30% tax rate. Which has the added benefit of vastly simplifying the tax system -- no need for multiple rates and all the complexity and opportunities for tax avoidance that go with them.

Your phase-out and progressive taxation numbers don't work out for any logical application of the concept. A means-tested pahse-out of a UBI in a progressive tax scheme would reduce the UBI for earners only in the highest tax bracket, thus further increasing their tax rate.

I would prefer a flat tax, with the UBI acting as the progressive mechanism while also being phased-out for high earners. Your assumptions in your response are really bizzarre...

According to Merriam-Webster, 'entitlement' can mean:

1: a : the state or condition of being entitled : right b : a right to benefits specified especially by law or contract 2 : belief that one is deserving of or entitled to certain privileges 3 : a government program providing benefits to members of a specified group; also : funds supporting or distributed by such a program

https://www.merriam-webster.com/dictionary/entitlement

How is that a solution for, say, telecom? Or space travel?

(Not touching the other GOP hot topics here...)

If you're ignorant of the cons of the thing you're pushing for are you still well meaning?

Well meaning people support all sorts of dumb things because they seem like the right thing to do at the time.

Dunno if it's underappreciated. I appreciate it for this reason, and similar ones. I assume this is why the idea resonated/s with the likes of friedman and also left-libertarian leaning thinkers.

I don't think all problems can be solved quite this way, and I don't fundamentally have a problem with secondary currencies as an instrument, as long as they work good.

In this case, taking the premise as is (food stamps should exist and apps should exist to make them work better), what you inevitably have is an artificial market. It's not impossible to have a core system onto which independent developers can build apps.

Incidental to your point about apps, I wonder if Propel can't deliver a devastating blow with a digital records FOIA request. Conduent will fight it tooth and nail, and it may be worth Propel's while to put some professional legal help on it, but since the data is being paid for by the taxpayer, as long as it can be redacted so that personal information isn't shared (which Propel could be required to pay for), Conduent may have no recourse to keep their data under lock and key. App users could be shown how to request their primary key or some other permissible identifier under FOIA from Conduent, and then they'd be reduced to a mere primary data warehousing and collection outfit.

> I wonder if Propel can't deliver a devastating blow with a digital records FOIA request

I wouldn't think so. Propel needs current data, and taking a month or two to respond to each FOIA request would make the data untimely even if the FOIA request is deemed to be valid.

> App users could be shown how to request their primary key or some other permissible identifier under FOIA from Conduent, and then they'd be reduced to a mere primary data warehousing and collection outfit.

If I understand the article correctly, Propel already knows the individual's primary key and their app was working fine. Then Conduent stopped responding to API calls from Propel's app. Knowing the ID doesn't help with that problem.

Every market is a designed market. Markets aren't a natural dynamic system.

Federal reserve bank isn’t owned by the government. The federal reserve is owned by commercial banks who receive dividends. It does report to the government and pays the treasury excess earnings.

https://www.federalreserve.gov/faqs/about_14986.htm

The Federal Reserve system is quite complex, but the 12 banks are not owned by the banks. They are chartered and organized by the US government, so they can't change their mission without convincing the government to change the laws around them.

Nationally chartered banks are required to be members of one of the Federal Reserve Banks, and have to own "stock" equal to 3% of their capital and surplus. State chartered banks are not required to be members, but may do so under different rules. The banks receive a 6% divided of their stake, with the remaining profits going back to the government. The numbers aren't clear, but it looks like the system made over $92 billion for their 2016 year, and over $91 billion of that went to the government.

> The federal reserve is owned by commercial banks who receive dividends.

This isn't correct by your own link's information (it says no one owns it). However the Federal Reserve is run by a government appointed group who then oversea the various Federal Reserve Banks, each of which are incorporated and have stock which is what the private banks own.

It does seem a bit convoluted though.

Oh I thought stock implied ownership. Maybe it doesn’t mean that in this case.

The shares that the commercial banks own are pretty much entirely symbolic. I believe they have no voting rights, for instance.

The US Government considers the federal bank “independent within the Government”.

The Fed derives all its authority from the Federal Reserve Act, legislated by Congress, and it’s run by a board appointed by the President and confirmed by the Senate.

It’s like owning stock in the Green Bay Packers.

The Packers are the only publicly owned, non-profit team in the league [0]. They are effectively privately held shares: you can't sell them (you can gift them to family members only), you get no dividends, you get no rights except the ability to vote. It's the only reason the Packers are still in Green Bay: to move or sell, you'd have to convince 350,000 die hard Packers fans to vote in favor of a move/sale.

It's one of my favorite stocks: I never have to worry if the value is going up or down.

[0] https://en.wikipedia.org/wiki/Green_Bay_Packers,_Inc.

It was so effective at stopping anyone from buying up and moving the team, that the NFL banned any other teams from structuring their ownership this way. Which says something about who the game's really for I guess.

Fantasic example, exactly the type of alternative structures that could make sense in artificial markets. I didn't know about this.

One bit I'd nitpick is restricting the mission to non profit. Profits could still be good, if shareholders have the right to decide what to do with them. Non profit structures force you into spending "above the line" which muddles things by design. Having a profit is a useful health check, and profits can be spent in a more transparent way.

Imagine such a structure owning street level retail real estate, a busy shopping street. Renting at market value to H&M produces more "profit" than renting at reduced prices (or free) to a community op shop. There's a trade-off that the "owners" might make, if they would like to buy more real estate or whatnot.

Any profits fund charities in the state of Wisconsin - and they have a rotating set of causes they work with each year. Last year I think it was senior citizen care, next year it's alcohol and drug rehabilitation.

Not sure. I mean it might but that would be individual Federal Reserve Banks and not the Federal Reserve itself. I find it a bit confusing, heh.

I wasn't referring to the US system in particular. But regardless of the particulars, there's a centralized core in US banking and in many other industries.

>>This is something we're going to have to get way better at.. ...government created markets.

The goal should be to eliminate government created markets not get "better" at creating them...

> You need (or at least, they opted for) a centralised core:

That is the problem they opted for the centralized management, one does not need it for EBT, they choose it because they wanted control over how and where the money was spent which means they needed a contractor they controlled.

>We also can't expect competition or market forces to fix problems with the central core, at least unless that competition can be designed in.

In this case it comes down to data ownership. Like so many other things in modern society in the US we have a warped sense of ownership where a company that collects information about you owns that information, you do not own your own information. Until we change that these types of issues will continue to arise

As the article stated commercial banks attempted to shut down services like MINT for people until a law was passed requiring the banks to allow users to access their own data with 3rd party services like Mint.

This type of legal requirement should be expanded to all personal information

re: "The goal should be to eliminate government created markets"

Having been on hn for a while, I was sort of writing to this response when I commented.

So... my friend^, I don't know. I really don't. I am sympathetic to all sorts of minarchist ideas and minarchist ideals. I also have my own ideas off beat ideas about was of improving some of these. In many cases that I alluded to above, trying to minimize government power would be an approach worth trying. However, I just don't see us living in a near future where the quality of artificial^^ markets is not very important. Some of these are a lot worse than others, and we should fix it.

^I mean this. Lets not forget we're friends, disagreements don't negate this.

^^re-reading, I realized that I should have said "artificial" rather than government created. There are many ways to catch mice, and it's worth varying more than just the colour of the cat.

> e-reading, I realized that I should have said "artificial" rather than government created. There are many ways to catch mice, and it's worth varying more than just the colour of the cat.

All markets are artificial. You can't have any kind of market without some enforcement of the rules that make it a market. Otherwise it degenerates into a free market, which, despite its name, is not a market.

All markets are artificial because enforcement of property allocations is an artificial, market creating action. But none of this is relevant to the point of the GP, which is that a realistic policy decision involves making existing artificial markets incremental better in the short term.

> The goal should be to eliminate government created markets not get "better" at creating them...

So we're all going to individually contract with "General Jim's Defense Systems" or "Admiral Bob’s Global Security" ala Snow Crash? The parent is discussing natural monopsonies, where there's no reason for a given territory to have more than one purchaser, such as national security space launches and social security distribution systems.

But we do already have more than one Company for "National Security Space launches" (ULA and SpaceX) with more attempting to become contractors.

We have seen directly in that market what competition will do, massively lower costs. ULA is somewhere on the order for 5x more expensive than SpaceX, and SpaceX had to sue to get the privilege of bidding on the contracts for the Defense Dept which previously did No-Bid contracts to ULA

So your own example debunks your comment

Further I never stated we could eliminate ALL government markets, but that should be the GOAL, national defense is likely one that can not be eliminated however it is also an example of the extreme waste and over reach these markets create where now the government has programs that even the military says they do not want because they are Jobs programs not for actual defense.

I think you might be mixing up monopolies (only one seller) and monopsonies (only one buyer).

Yes, at least that is what I meant by monopsony.

There are multiple competing firms, but they all sell primarily to the state. The legal cases syshum mentions resolved in changing the rules of this artificial, state-run market. ..making them better.

I don't know where "no-bid" plays into the story, but elon musk testified for fixed-bid as an alternative to cost-plus pricing/bidding.

There will always be government created markets. Who else should pay for infrastructure for example? Do you want to privatize all of that?

>>There will always be government created markets.

Maybe, maybe not, but that was not my point. The Goal should be to eliminate as many of those as possible.

>Who else should pay for infrastructure for example?

Depends on what infrastruture you are speaking of, Roads are often an example but you do understand there are private roads, probably more than you think.

"But who will build the roads" is a tired dead horse in libertarian circles, that problem has been solved countless times

>Do you want to privatize all of that?

Again that depends on what you mean by "Privatize", I believe goods and services are best when the consumers that consume them directly pay for them. My goal would be to have the payment for goods and services as close to the consumption of those goods and services as possible.

The more people and organizations you put between a consumer and vendor the more quality suffers, and prices raise.

There's many small private roads, but all the major ones you drive on every day to get to and from your work once you're away from your suburb? Those are public, and unlike the ones that are in your cul-de-sac, they're used by many many people, not just the people who live on the same street.

> There's many small private roads, but all the major ones you drive on every day to get to and from your work once you're away from your suburb? Those are public, and unlike the ones that are in your cul-de-sac, they're used by many many people, not just the people who live on the same street.

Does a 12.5 mile long 6 lane divided highway count as a major road? Because I drive on a privately owned one everyday to and from work.

Cool. I assume that's a toll road. Now let's say every single separate road you travel on was owned by a separate company - how would you pay your tolls? In cash, every 30 seconds? Would you have to install a tracking device on your car that any road owner can tap into? Who'd control access to such a thing? How would you ensure that they don't display monopoly-like behaviour, like the identity verification/credit check/etc companies of today?

Could the road owner outside your work or your home jack up the prices to make it prohibitively expensive to take your car there? How'd you prevent that? How would you ensure that somebody didn't buy up all the major roads into or out of a city and make it prohibitively expensive for poor people to access the city?

How would you ensure that somebody didn't sit on their monopoly on the route to or from wherever you need to go, and refuse to perform repairs?

The whole thing could, potentially, work for the countryside, where land is cheap and plentiful and if you don't mind wasting economic production on duplicating and triplicating and quadrupling routes just to make your fantasy work out, it might work. Except wait... America's got a privatised industry which theoretically competes with road travel already and has many of the same restrictions - the freight rail industry - and when's the last railway that got built? Apparently it's prohibitively expensive to buy the land.

>>and when's the last railway that got built? Apparently it's prohibitively expensive to buy the land.

Umm all the time and continually.

Rail issues are not land prices, Transportation by rail has all kinds of other issue largely related to safety, government, and time not the price of land

So it is your belief there are no major roads that are private? and there is no way to fund major roads in a private user fee way?

https://thenib.com/private-environmental-protection?t=recent

So your belief is private = Rich, and Government = Helping poor people? Because in reality the opposite is true, government mainly assists the rich not the poor

Even programs like EBT have been shown to assist companies like Walmart a great deal.

Smash the State, Eat the Rich (https://c4ss.org/content/30085)

Governments tend to create places where there is a large amount of money available in a very non-egalitarian fashion. Look at the DC area--all the tax revenues from around the country is pumped there and supports an immense amount of people on 100k plus salaries. Another example is defense-industrial complex and military bases. Military bases contribute a LOT of money to local economies. That money doesn't ultimately come from the military base but from the population of the country as a whole. That's why senators make very strange, non-strategic decisions about base closures.