1. Does govt activity compete with private enterprise? Then stop doing it. If private enterprise can provide it, let the market work it out. Eliminate the activity and cut the spending by that much.
2. Does govt farm out an activity to private enterprise to execute? Then just stop doing it. Calculate the govt cost of decision making, tax collecting and administration of the activity, and cut spending by that much.
3. Does govt actually provide the goods or service? Then corporatize the activity and eliminate the monopoly on the service, and end the spending on the activity.
Example #1: The government has the securities and exchange commission to regulate the financial markets. Short sellers are necessary and sufficient to the task. Eliminate govt oversight and bring spontaneous order out of the chaos govt introduced. Short sellers spotted Enron, Madoff, Countrywide and every crisis where govt regulators could see no harm. Not only do shortsellers spot the problem, they effect the correction. You and I pay if the govt is wrong. Shortselllers pay if they are wrong.
Example #2: Road building. Govt is in the biz of road building, but it has no equipment or such, so it contracts it out to road builders. Just get out of the biz.. what roads get built, where and when is not up to govt. Let property rights and real estate markets decide what roads get built where and when. Most paved roadwork in USA by far is laid without any government association. Think shopng parking lots, access roads, driveways. Government participation is very low, and what they do can be done without them, at a much lower cost. Calculate the govt cost of decision making, tax collecting and administration of the activity, and cut spending by that much. (When trying imagine govt out of roads, think what happened when govt got out of the internet, to a degree.)
Example #3: Where the govt actually provides the service, eg, fire, police, education - corporatize (not privatize) the service and end the state monopoly. The government delivers the mail, and has a monopoly on the delivery of first class mail. Corporatize the post office: take all of the assets: land, equipment, rolling stock, goodwill, pensions, etc, and divide it up among the workers, management and pensioners and issue stock thereof to all concerned. Then eliminate their monopoly. Cut tax collection and spending associated with the the activity.
Like road building, state provision of police, fire and education pales in comparison if what private industry provides in many ways: proportion, cost, efficacy, and satisfaction. Most states demand all communities put themselves under police control, so there would have to be legal changes for this.
But once the changes came, we would not have the problem of govt workers deciding whose houses are saved and whose burn down, for lack of $75 fee. In a free market, volunteer firemen let no house burn down. Lucky for USA, most firefighters, by perhaps 10 to 1, are volunteer.
Where the state provides the service, and no free market provision is extant, then the govt can do that. I can't think of anything. Ribbon cutting at a new private enterprise park? I dunno...
Give me a tough one: immigration. The solution is to let the market handle it. Get rid of passports and border patrol. Anyone crossing the border has to go somewhere, meaning arrive on someone's property. That immigrant is either welcome or not. Not welcome, life is harder than in say, Mexico. back to Mexico go the unwelcome. The welcome stay as a guest of the farmer or hotel who desires the immigrant to stay.
Why should everyone else pay for an activity that should be up to property owners? Why should you pay to maintain a passport service that issues me a passport for when I want to travel to Hong Kong or Moscow? Really it should be a problem for me and Moscow, not you, and certainly you should not have to pay for my elite activity.
Coming back to USA, (or is it Union of Soviet American Republics, USAR, now?) I have the same problem as the Mexican immigrant: does anyone welcome me, or do I have my own property to go too? if I am not a property owner, or loved, I am out of here.
Charities thrive in free markets, and they dispense love where markets have no business. Charities are property owners too. Let the Salvation Army and Catholic Church decide how many immigrants it wants to support on its property.
Austrian economics has worked all of this out. It is rationally and well formed (although there are raging debates within the community of free market adherents.) Proper order comes out of the markets spontaneously.
Right now USA is bombing and bombing our allies and paying our enemies to protect our troops in Afghanistan. We have more than lost that war, it is more than over, we are just destroying ourselves harder and faster. Our generals, who are promoted by congress, are unworthy of our soldiers.
When this Hamiltonian madness falls, will we embrace Jeffersonian freedom? Or will when one demon is cast out, seven come to take its place?
Saturday, October 9, 2010
Advice On Controlling Government Spending
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2 comments:
I am reading the writings of Chuang Tzu, an ancient Chinese philosopher whose ideas about politics had a libertarian flavor. Here's a quote:
"If someone tries to govern everything below Heaven [by regulations, law and practices], it's like trying to stride through the seas or cut a tunnel through a river or make a mosquito carry a mountain. When a great sage is in command, he doesn't try to take control of externals. He first allows people to do what comes naturally and he ensures that all things follow the way their nature takes them. The bird flies high in the sky and thereby escapes from the risk of being shot with arrows. The mouse burrows down under the hill of the spirits and thus escapes being disturbed. Don't you even have as much understanding as these two creatures?"
Dear John ,
re: "Advice on Controlling Gov't Spending"
As always your comments are welcome, thought provoking, worthy of consideration. I've enjoyed them over the years and generally agree with your positions. I wouldn't be afraid to recommend your musing to anyone.
One area of privatization that I can't foresee as being realistic is law enforcement. The idea of corporate police forces sound a little like the drug cartel armies of Mexico. Maybe once the other various gov't entities are privatized (the easier ones if you will), I would see its potential.
Often in your comments you compare Hamiltonian vs Jeffersonian ideology. I'm far, far from being a historian having read only one biography on Hamilton. I don't think it fair characterizing Hamiliton as "big gov't" and Jefferson as not. Hamilton and of course Jefferson were setting up a new government...trying to form a system of sorts. I doubt Hamilton would agree with your characterization of him as a representation of the big government we have today. The use of the late 1700's Hamilton thought processes/circumstances as representing the mess we have today is a pejorative. To be fair, I've been trying to think of someone else to use in place of Hamilton, but no one comes to mind. It would be interesting to be privy to what our fore fathers think of today's circumstances.
Keep up the good work.
Sincerely, Dean Easlick
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