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Government is also useful for things which have massive positive externalities. Education is the paradigmatic example.

Libraries are also an example of a good where maintaining the "option to buy" is potentially more important than any service you consume. In other words, having a big pile of books in a building, available for close to no cost, enables us all to act more freely -- knowing we can get more information when we need it.

What "massive positive externalities" are created by a library?

The sole benefit you describe, namely the ability to borrow books, is a private benefit. I borrow a book, read it and enjoy it. What benefit does this create for anyone besides me?

Since I am the sole beneficiary, the library can charge me for it, and prevent me from consuming it if I don't pay. Why should you be forced to pay for me to receive these benefits? Should you also be forced to pay for my netflix subscription?

> I borrow a book, read it and enjoy it. What benefit does this create for anyone besides me?

That actually made me feel sorry for you.

Are you really this much of an island, or do you just enjoy trolling? Is there no possible benefit for me that you might have learned something, or that perhaps you might now be able to tell me something I didn't know before? Is there no benefit to me that perhaps because someone in a library showed you how to apply for your housing benefit online you didn't feel the need to break into my car?

And yes, much crime like theft can be related to drugs. But a significant proportion can also be tied back to poverty.

You're like a parody of all that's bad about the libertarian ethos. Or whatever you think you are.

Is there no possible benefit for me that you might have learned something, or that perhaps you might now be able to tell me something I didn't know before?

You are moving the goalposts. I asserted there is no "massive positive externality", not that there is no possible external externality.

I do concede that maybe people who spend time in the library are more interesting conversationalists. I just don't consider this benefit to be "massive". Do you?

You stated that "The sole benefit you describe, namely the ability to borrow books, is a private benefit. I borrow a book, read it and enjoy it. What benefit does this create for anyone besides me?"

Do we have different definitions of "sole" and "private" - those words feel fairly absolute to me.

Sure it may not be a massive positive and direct benefit to you, but I find it hard to understand how you think there's no possible benefit at all. Do you feel the same way about teaching people to read, write and count?

You are correct, I should have been more careful with my language. Mea culpa.

Or be prepared to concede with slightly more grace when your argument gets destroyed.

There's no "massive positive externality" to humanity. If you are to take your position to its logical conclusion, all human life should be exterminated.

I don't think I've seen anyone argue for a truly nihilist position as earnestly as you have here.

Having an educated populace is essential to a democratic society. It's the same reason we have public education and also why the freedom of the press is enshrined in our constitution.

I benefit from library's near me that I have never been to. They among other things reduce crime in my area which then reduces the need for shops in my area to protect themselves at night, which allows for both lower prices and longer hours. Could other things provide the same benefit, of course video games also reduce crime.

But, the choice is not to eliminate these library's and watching identical private ones pop up, it's between having them and not, and by having them I benefit more than it costs me for them to be there.

First, where I live (India), libraries are provided by the private sector. So clearly market forces can provided libraries.

Second, how much crime is prevented by libraries? Is this the cheapest way to prevent crime? Or would it be cheaper to devote the money to a few more beat cops?

The US library system far supposes India's. There would a few library's near me without public funds. But, most of them would shut down so an equivalent private option does not actually exist.

Is it the cheapest way to prevent crime? Is a leading question. Where I live we spend a lot of money on a wide range of things from beat cops to parks and street lights that prevent crime. And library's provide many other services than just crime prevention.

A more realistic question might be; Assume 10% of their useful function to me was crime prevention would reallocating 10% of their funding to something else above and beyond what we already spend on it prevent more crime? And the answer to that question is no.

PS: In theory we might be able to say use subliminal messages to prevent crime more cheaply. But, of the options that are actually being considered Library's are surprisingly cost effective.

No, the issue isn't their useful function, the issue is their public benefit.

The cost/benefit to evaluate public subsidies is (public benefits) / (public costs). If 90% of the benefits of a library are gained by the users, then it's highly likely that this will be negative.

In such cases, a mixed model is best - i.e., if 10% of the benefits are public, 90% private, then a 10% subsidy for libraries might be justified.

But, Public Benefit always = Sum of all Private Benefits. You may be thinking direct benefit vs external benefit, but as everyone utility functions are separate their share of the public benefit is different. I specifically mentioned my personal cost (as a share of the public cost) and my personal (indirect) benefit to help clarify the issue, but I think you missed that point.

Cost and benefit are also independent. It possible for a Polio vaccine to provide 100,000 times the public benefit relative to it's cost (eliminating a disease for all time can easily be worth vaccinating people on the other side of the planet). Research can also easily have that magnitude benefit ratio's.

And (public benefits) / (public costs) is only negative if public benefits or public costs are negative you might be thinking Benefits - Costs but that does not really fit the rest of your equations either. Anyway, the idea that public subsidy's should not exceed the ratio of (individual benefit) / (public benefit) sounds good until the public benefit exceeds the cost at which point there is little for an individual to pay the costs.

PS: There is a reason people get PHD's in economics it's a lot more complex than you might think. Just consider adding different levels of diminishing returns to all of those cost benefit equations and your still barely scratching the surface.

For things that are super good, super useful but not profitable nor predisposition for voluntary support how does a community get those things? Especially those within the community whom might not afford otherwise? And especially when the lack for them causes cascading affect to the whole of the community?

Seems to me an outbreak of disease by the poor surely effects the whole and that we all would do well to pay a "tax" to prevent that?

If you're arguing my list of Government specialties was incomplete, I agree, and contagious disease control is a great example.

3) for things that provide value but don't (necessarily) make money. And no, persuading people to voluntarily pay for these is not generally sustainable.

I knowingly, intentionally disagree with the public good argument. See:

http://fallibleideas.com/public-goods

Surely as argued above, contagious disease prevention would qualify as a public good — it is certainly something that is non-rivalrous and non-excludable. Why do you agree with government provision in this case but not in the case of, say, free education for all?

That article doesn't seem to give much sway to the issue of transaction costs in letting people organise to provide a public good, which is really central to the issue..

> That article doesn't seem to give much sway to the issue of transaction costs in letting people organise to provide a public good, which is really central to the issue..

There are transaction costs for Government action too. In general they are higher. Government has no special ability to keep transaction costs low.

> Surely as argued above, contagious disease prevention would qualify as a public good

It has excludable ("public") and non-excludable aspects like all goods. It's certainly possible, in theory, to make a profit off it. But today no such thing is organized, meanwhile the Government does have it under control, and the total cost isn't very high relative to the country's wealth. So there's much, much higher priorities to privatize like the postal system or social security.

I think reform needs to go one step at a time. Do I predict that contagious disease control will and should one day be done differently? Yes I guess so, though the far future is quite hazy. Let's not worry too much about that because by the time we get closer to doing something it will be a lot clearer what works or not.

But when you bring up something like education, where we already have many private educational institutions, and public schools are widely regarded as largely failing, no I don't think the Government is good at this and no I don't want to spend billions in taxes on throwing money at stuff with institutional problems other than underfunding (e.g. teacher's unions and the wrong epistemology).

A good transitional proposal is vouchers. In this way the Government can subsidize poor people or any other favored group while not actually running any schools. So if what you want is access to education, paid for by the Government, you can still have that without Government actually running schools. I think that'd be a good step forward.

Transitions are important because if you cut off aid to some group overnight then they are going to get fucked in the meantime before alternatives are created. And transitions are also important in that alternatives are not created before some sort of transitional steps are implemented to allow alternatives a purpose and ability to be useful.

It's important to keep in mind that economists consider things cetibus paribus - that is, as they are at the time, in isolation and in the real world. Whilst I have no particular problem with market based solutions (e.g. publicly funded vouchers should be provided for schools rather than public funding per se) I'm interested in seeing some kind of current, market based solution to issue of contagious disease prevention (how do we make everyone who benefits from protection against contagious diseases pay the value of their protection, for instance) and education (how do we make everyone who benefits from an educated populace pay a fair price towards the education of the next generation) --- when I do, perhaps the libertarian approach will persuade me more. Keep in mind that approaches which require future technological advances or infringement of civil liberties aren't allowed.

> There are transaction costs for Government action too. In general they are higher. Government has no special ability to keep transaction costs low.

Of course they do --- it's called fiat. When a variety of beneficial options exist but a lack of cooperation prevents an overall resolution, the government has the power to step in and dictate what should be done. If you don't like it, other options are still available --- there are other countries to migrate to.

Fiat isn't saving on transaction costs. It's basically just failure to do due diligence (enough to persuade people to participate voluntarily) and therefore acceptance of high risk.

I don't consider proposing emigration as a reasonable response to proposed reforms of our country.

I have no particular ideas about changes for dealing with contagious diseases. It's low priority and I haven't thought about it. If you'd like several examples (but not that one), I suggest the book The Machinery of Freedom, now free: http://daviddfriedman.com/The_Machinery_of_Freedom_.pdf

> how do we make everyone who benefits from an educated populace pay a fair price towards the education of the next generation

I don't understand the necessity of making everyone who benefits pay. The real problems, as I see them, are getting stuff to happen and be paid for in such a way that everyone directly involved mutually benefits. If someone else benefits to, that isn't hurting anyone and is not a problem.

What actual problem do you want to solve? Having schools and having them paid for? I don't see that as terribly hard. We already have schools, public and private, people already pay for them (both types), it works. I don't see any fundamental difficulty in getting the Government out of the education equation unless your goal is redistribution of wealth (for educational purposes) to poor people or other groups, and you want to redistribute more than voluntary charity will do (in other words: you want to redistribute wealth from people who think it's best used on X, for purpose Y, against their best judgment).

If you want to do that redistribution you need Government because it has the special power of using force against innocent people who disagree with you. But vouchers are still adequate.

The dam building example illustrates exactly why the public good argument makes sense. Let's say a town of 100 farmers need a dam built and there is a net benefit even if only 50 contribute to building the dam. Now there is a huge incentive for the farmers to play chicken with each other to see who will pay up first. The "free riders" that don't pay for the dam will have extra money to buy more land or other resources to take better advantage of the new dam's benefits.

In this case it is fair for the town government to pay for the dam with taxes. Given the net benefits of the dam it is even plausible that the increased property values and job revenues near the dam would increase the tax base.

People are not "rational economic actors" and do not make all their life choices by "incentives" of this type.

Most people will care a lot more about, for example, how they are perceived in the community. So simply making the payers list public would, in some cases, prevent people from playing chicken.

Many other solutions are possible, depending on context and culture. It's the job of the businessman to use creativity to find a solution, a way to persuade people to voluntarily participate in his project.

What's wrong with Government action?

Two main things:

1) some people will be taxed to pay for the dam who were not playing chicken but genuinely would rather have kept their money and not had the dam than have paid for it. Why? Because their kid urgently needs new shoes or expensive, urgent cancer treatments. Or their roof leaks, or many other reasons. Just because the damn project is profitable for them doesn't mean they don't have more urgent uses of capital at the moment.

2) some proposed projects should not be done. Why? Well maybe people are mistaken about it being a net win. Maybe it has hidden costs which I noticed but other people didn't notice. And I try to tell them but they don't understand my point.

The solution to the "same projects are mistakes" issue is voluntary participation so people use their judgment and win or lose based on their own choices.

Taxing everyone means the dissenters pay for it, and lose out if it fails, even though their judgment was correct.

The Government has no special skill at knowing which dams should be built now, which later (because some other use of capital is more urgent), and which never. Nor at knowing which look highly profitable now but will be rendered obsolete by new technology next year.

Interesting points, although I respectfully disagree.

It's pretty silly to talk about economics if you don't believe in rational economic actors. A public list is a nice theory, but then you would still have people trying to get on the list for the minimum amount possible and hoping that others would donate more to be higher on the list of donors. And what happens when you have 60 local farmers and 40 corporation farms. Most corporations would be pretty hard to shame into paying if they could somehow get others to pay.

Point #2 goes both ways. If the project becomes a net benefit then the dissenters get the benefit and win even though their judgement was incorrect.

Point #1 also goes both ways and points towards the need for public goods. In reality the sick farmer will benefit the most from public services such as dams and health care being shared by all of society. By sharing the cost of the dam and healthcare across all of the farmers they can help prevent one of them going bankrupt due to a bad case of cancer.

It's true that the government isn't better than everyone else at knowing which dams should built, but that doesn't mean that society can't figure out that some projects are best funded by the entire society.

Anyway - interesting perspective on your part. I wish more people could talk about the pros and cons without getting downvoted for disagreeing with the majority.

> It's pretty silly to talk about economics if you don't believe in rational economic actors.

With respect: when you find rational economic actors in notable quantities, please do let the rest of us know. (My skepticism of the questionable assertions of libertarians is largely based on the conspicuous absence of such actors.)

Don't worry: even with rational actors as an assumption fundamentalist libertarianism still has plenty of holes.

Basing policies on the assumption that nobody will exploit obvious inefficiencies since people aren't entirely rational is the economic equivalent of using "drowssap" as your password.

> Point #2 goes both ways. If the project becomes a net benefit then the dissenters get the benefit and win even though their judgement was incorrect.

Lots of people dissented from the iPhone. Now they benefit. Their benefitting doesn't hurt Apple or prevent Apple from having funded the project themselves and from making plenty of profit. Apple got what they paid for and then some. Other people come out ahead too but that isn't Apple's loss. I don't think some people getting unearned benefit is something to worry about as long as the primary actors are able to make their profit.

The same point could be made more broadly about computers as a whole. Funded by a minority initially, now hugely benefitting many people who didn't take any of the initial risk.

I think there is an asymmetry. I'm far more concerned about people being forced to pay for failed projects or projects requiring capital they more urgently need elsewhere -- being actively, involuntarily hurt -- than I am worried about people gaining broad benefits from projects that benefit the primary actors and risk takers plenty (I actually regard this free stuff to lots of people, which is the result of many projects, as a positive, happy thing, not a negative.)

If you'd like to discuss further, with interesting people and no downvotes, you could come to:

http://groups.google.com/group/rational-politics-list?hl=en

The same point could be made more broadly about computers as a whole. Funded by a minority initially, now hugely benefitting many people who didn't take any of the initial risk.

Libertarian selectivenes again. Government grants have always had a large part to play in computer development, but aside from that, what's really benefitting people is the internet, which was most definitely a government project, 'funded by all US taxpayers' rather than 'funded by a minority'.

Running then with the library example, who then would be inclined to fund and run libraries in local communities across the nation (where companies may not be heavily invested or even able to afford such efforts)? In the libertarian stance, what would the alternative here be?

Don't get me wrong - I generally find the libertarian mindset quite agreeable but there are certain examples where I'm unable to reach the conclusions truer libertarians do, and this would be one of them.