371 sats \ 6 replies \ @Undisciplined 24 Jan \ on: What Role Should Governments Play in Markets? history
Abolishing themselves
Monopolies arise from state protections. In a free market there is always at least the implicit competition of new entrants. Here's a fairly short essay on the subject from David R. Henderson.
The transparency part is tougher, because the rise of giant state regulatory agencies coincided with the decline in agrarian society. People did know where their food came from before the administrative state, because they mostly grew it themselves.
People sure do seem a lot sicker than they used to be, so I'm not sure the state is doing such a bang-up job safeguarding our health.
Empirical evidence weighs heavily against state monopoly protections for intellectual property. I suspect the same holds for other aspects of innovation. All the state does is channel resources away from where people most want them to go, so the extra innovation from the state will generally be less aligned with what people want than the foregone innovations that were crowded out.
Are you sure that's what's happened? Maybe the form shifted from direct funding to indirectly subsidizing private innovators or academics. Maybe less innovation that is directly funded gets disclosed to the public.
Monopolies arise from state protections. In a free market there is always at least the implicit competition of new entrants
how do you square this idea with the economies of scale that arise as a market leader grows larger? won’t they naturally trend towards becoming a monopoly?
Are you sure that's what's happened?
Yes, in that last point I’m sharing my personal opinion, it seems to me like America doesn’t value innovation to the extent they did in the early industrial years.
AI is a great example of this, the federal government seems way more concerned with regulating and limiting AI than helping it succeed.
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Economies of scale have limits. Firms have the same problem as governments with a lack of internal profit and loss accounting. Eventually, that inefficiency overtakes economies of scale.
On the innovation point, I definitely think you're right about the prevailing attitude being one of fear, rather than optimism. I have a half-baked hypothesis about why new communications technologies bring down existing regimes. It might be that the US power structure was designed to be resilient to the types of communications technologies that existed before the internet and now they feel threatened by something they know they can't control.
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interesting theory.
there’s a section in Bhu’s book that talks about radio and how challenging it was in the early days to prevent people from interfering with other broadcasts on the same frequency… which led to the government licensing of radio frequencies to maintain clean lines of communication
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It's a good example of how scientific advancements can require us to rethink our property rights framework.
I think market coordination could have solved that, though, since it's not in anybody's interest to broadcast an indecipherable message.
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it's not in anybody's interest to broadcast an indecipherable message
however, it could be in the interests of adversaries to make sure Americans are unable to hear important broadcasts, and this seems like without government intervention the costs for someone to interfere would remain incredibly low.
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I doubt adversaries care about having the proper FCC licensing. The ability to disrupt radio communications is readily available and it's easy enough to do without getting caught immediately.
The difference between a market solution and the government solution would be pretty minor, functionally. Instead of leasing the frequency from the government, radio operators would rely on arbitrators to recognize homesteading of frequencies based on who used it first. At least that's my guess.
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