From: baruch@nynexst.com (Robert Baruch)
Subject: Re: Funding the govt.....(Re: Just a few...
Reply-To: baruch@nynexst.com
Organization: NYNEX Science & Technology, Inc
Date: Wed, 6 Jan 93 15:28:31 GMT

In article 15128@athena.mit.edu, tyadav@athena.mit.edu (T.Y.) writes:
> ================================================
>  
>  What follows, is my attempt to get my own thoughts straightened out.
>  The rightful govt role:
>  [1] protection from criminals
>  [2] protection from invaders
>  [3] run the law courts to settle disputes
> 
>  All this needs funds. "No free lunch" - as economists like to say.

TAANSTAFL!

>  The fundamental question is, then, what is the fair and practical way to
>  fund these activities. (I want to use the term "practical" there because I
>  want the "cost of obtaining funds" to be as low as possible.)

For [1] and [3], that should be fairly obvious.  If you pay for [1] and/or [3],
and you are a victim of a crime or a member in a dispute, you may use [1]
and [3].

> 
>  Having stated my premise, here is the extension of debate:
> 
>  baruch@nynexst.com writes:
> >
> >Sure.  Suppose I want to sell my land, along with it's protection.  If person
> >A doesn't want to buy the protection part of it, then I am free to deny him
> >the sale (since what am I going to do with protection for the land and no
> >land?).
> >
> >If person B does buy the land with protection, and then throws away the
> >protection, he can later sell it without that protection.  He can choose
> >to sell it at whatever price he wants -- he could, for example, include
> >his cost of buying the original protection (even though it doesn't exist
> >at the time of B's sale).
> >--Rob
> 
>  First of, let me clarify the term "protection" here. I do not
>  mean "protection" as is sometimes implied by insurance. Govt functions
>  are different from the insurance functions.
>  Govt is proactive (it should - keep the criminals off the streets; protect the
>  victim while the crime is taking place; assist victim after the crime -
>  where crime has been defined by objective laws).
>  Insurance is reactive. Hurricane Bob comes in; can't do much. Refund for the
>  unavoidable risk planning.

To keep criminals off the streets, you have several choices.  One of them is
to catch a pre-existing criminal and put him away -- jail.  This is not
proactive.  The other way is to make the penalty for crime so great that no-one
with half a brain would want to commit a crime.  That would be proactive -- solving
the problem before it occurs.  And I can think of no better deterrant than 
every potential victim holding a loaded gun.

That loaded gun protects the victim while the crime is taking place.  And...

Insurance is not reactive.  It is proactive.  The way insurance is *supposed* to
work, is that the higher the chance of a disaster, the higher the cost of
insuring against that disaster.  Hurricanes don't happen every day in the US,
so the cost of insurance should be fairly low.  Home insurance for a house
situated close to the beach should be high, since the chances that erosion
occurs (and the house falls into the ocean!) is high.  

All this means is that if YOU, the consumer, are willing to take the risk and
PAY for it, then you have everyone's blessing.  You've paid for the priveledge
of risk.  You can also choose to have no insurance, in which case if the
unlikely happens, you're up the creek.  After all, you didn't want any 
insurance.

[Incidentally, an article in Reason magazine some months ago told how the
government artificially lowers the cost of insuring a waterfront home.  Go
figure THAT one.]

Insuring yourself against crime should make you warm and fuzzy, feeling safe.  So
if you ARE robbed, you are at least insured.

So what you seem to say is that "protection" is before the fact, while "insurance"
is after the fact.  I agree.  But I also say that you can't control everything.
You can't control the weather.  You can't insist that everyone put up houses
which can withstand the strongest hurricane.  If you do, you're forcing people
to spend money which they may not want to spend.


> 
>  With this distinction made, we can now list the source of 
>  "protection costs" (or call this govt functions costs). These
>  are incurred at distances far away from my property.
>  For example, I would like to have roads/freeway free of drunken drivers.

If said roads/freeway were privately owned, then they would be free of
drunken drivers.  People would pay to have it stay that way.

>  I can protect my porsche from theft with a gun. But, I do not want to
>  fix machine gun on the car hood to take care of drunken drivers.......
>  After all, in the spirit of natural justice, I presume innocence till 
>  proven otherwise. So, the car and me need round the clock govt functions
>  to keep streets pleasant to drive.

So what do you propose the government do?  Keep a lookout for drunk drivers
around the clock?  If you pay the owner of a privately owned road to do
this, then you get both before-the-fact protection (in the form of patrols)
and after-the-fact protection (in the form of insurance).

If you get the government to do it, though, you FORCE everyone to have the
same before-the-fact protection (with a hell of a lot less manpower) and
the same after-the-fact protection (which doesn't seem to work -- slaps on
the wrist never work too well), regardless of whether you want it or not!

> In other words, my property is "not just
>  the porsche," the property really is the "ability to race freely without
>  worry on land" - the car is just the means; it ain't the happiness.
>  Don't I therefore, expect more from the govt - because the pleasure I derive
>  from the expensive property is more than say, someone content with a Yugo.

That's the great thing about insurance.  You can insure as you like.  If you
derive more pleasure driving a Porsche than a Yugo (who wouldn't!), then it
is only reasonable that you pay more insurance -- after all, if you crash your
Porsche, you'll be very sad (and you'll want to buy another one to satisfy
your urges!).

> 
>  Take another example: A ranch on the border. Yes, with a gun I can take care
>  of loss on site. But, then what about the other govt functions that conserve
>  the property and its "real value - tranquility and solitude and clean air
>  and clean water" to me. The functions include invasion protection etc. The
>  costs associated seem more fairly distributed if linked to the costs of
>  the base property. Don't they? Am I missing something, hmmmmm!!

Insurance takes care of that, too.  The cost is proportional to the amount
you want to insure, isn't it?  

Don't get me wrong; I'm not naysaying the purpose of government to serve
and protect.  I just disagree with the idea that if a person doesn't want
what the government offers, he still has to pay for it.

> 
>  The questions: 
>  [1] How do you decide who pays how much for the govt functions that
>      exist and affects everyone's happiness: keeping criminals off; keeping
>      invaders out; keeping the courts productive.

*I* decide how much *I* pay, and that's the extent of my protection.  Why do
you want to force *me* to pay for *your* protection (or mine, for that matter)?
Why does everyone have this urge to force other people to pay for things, when
they can pay for it voluntarily?  Answer me that!

>  [2] In what form do you efficiently collect these payments. 

Ever heard of subscriptions?  Monthly bills?


--Rob