From: mccall@mksol.dseg.ti.com (fred j mccall 575-3539)
Subject: Re: The end of the Reagan Era
Organization: Texas Instruments Inc
Date: Mon, 16 Nov 1992 13:53:23 GMT

In <1992Nov16.033124.24899@oracle.us.oracle.com> mfriedma@uucp (Michael Friedman) writes:

>Fred, there is a very simple proof that you have you're head up your
>butt.  

Well, I'm sure you'll understand if I don't expend a whole lot of
effort responding to the sort of idiot who starts off an article with
this sort of remark, but let's look at just a bit of your 'logic'
(using the term as loosely as possible).

>Quite simply, people who live on private roads (and there are
>plenty of them) manage to get together and pay for this kind of thing.

Here we see the common fallacy of 'X exists at Y, therefore we can
expect X to work everywhere'.  Needless to say, it ain't necessarily
so.  As a counter-proof, I have a proposition for you.  I can show you
situations in which both steel and concrete structures can be made to
float.  How about we encase your feet in concrete, put a steel anvil
in each of your hip pockets, and then toss you in a lake?  No?  Gee,
why not?  I can SHOW you steel and concrete floating -- it ought to be
perfectly safe.

>My old boss used to live on a road like that when I lived in Vermont.
>They had a dirt road shared by about forty families.  They paid for it
>to be plowed in the winter, groomed in the spring, and maintained with
>sand and gravel during bog season.  There were periodic rows over
>whether payments should be proportional to distance from the public
>road or equal, but they always managed to come to agreement.

>Places with enough outside traffic to justify it would institute
>tolls.  Others would just put up with the outside use.

Gee, this sure sounds like a vast improvement on the current situation
to me.  I think it would be GREAT to drive back and forth to work
every day on 20-30 blocks of DIRT ROAD, stopping to pay a toll every
block.  Yep, sure sounds like a great idea to me.  Perhaps you need to
extract your head from wherever you are keeping it, Michael?

>>>: But what if there isn't sufficient traffic to justify the initial
>>>: capital investment in the road (in a free market).

>>>If there isn't sufficient traffic, then why do you need to build a road?

>>Do the phrases 'startup costs' and 'initial investment' mean anything
>>to you?  You can 'need to build a road' and yet not have sufficient
>>traffic to justify THE INITIAL INVESTMENT (compared to other, faster
>>return projects).

>Do you mind explaining that?  The usual economic justification for a
>project is that the return on investment (that's all investment,
>including startup costs) is as large or larger than that available
>from other equally risky projects.  You seem to be claiming that the
>decision to build a road should ideally not take into account the
>initial investment.  This seems like a bizarred idea.

Well, I don't feel real responsible for how things 'seem' to you.
What you are describing is the MONETARY reason for PRIVATE ENTERPRISE
to do something (the expectation of monetary profit).  You ignore the
whole idea of high entry costs.  Let me see if I can construct a
physical analogy for you.  There are chemical reactions that will take
place spontaneously, but require an initial input of energy in order
to overcome an initial 'energy barrier'.  There are things that are
economically reasonable investments that behave the same way,
requiring a large initial investment to get them started.  What do you
do IF YOU DON'T HAVE THAT INVESTMENT?  We're not talking about
monetary return here, remember.  We're talking about utility (in the
economic sense -- not by the dictionary meaning of the word)>

>>>As for thouroughfares,
>>>why can't the businesses that are located there assume the cost?  They
>>>benefit from making it easier for customers to get to them.

>>And what about businesses that can't afford 'their share', do not want
>>to pay 'their share', since for the business down the road from them
>>to get any benefit they will have to have a road to them, too, or
>>which move in or out?  How do you propose that this would work?

>The developer who initially builds a block or a subdivision just puts
>a restrictive covenant into the deed.  Alternately, the price of the
>land can include a perpetual maintenance fee like the ones most
>cemetaries have.  

Well, this sounds like it would certainly 'bury' the economy, so
perhaps cemetaries are a good example for you to use.

>>>: Also describe
>>>: what the resident on the typical block would have to pay.

>>>I don't know.  Whatever it costs.  The price will of course influence the 
>>>decision on whether to build it or not.

>>Well, 'whatever it costs' is a pretty loose answer.  How do you know
>>whether your libertarian proposals are even feasible if you don't
>>consider what they cost?

>Well, it can't cost more than it does now, so what's the problem?

The problem is obvious.  [Sorry, it just seemed appropriate.]

The problem is how the costs get distributed, how they get recovered,
how one accounts for 'free riders' and externalities, and a whole host
of other things.

-- 
"Insisting on perfect safety is for people who don't have the balls to live
 in the real world."   -- Mary Shafer, NASA Ames Dryden
------------------------------------------------------------------------------
Fred.McCall@dseg.ti.com - I don't speak for others and they don't speak for me.
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