Posts tagged John Stossel

Markets Not Capitalism on the Air!

Edited by Gary Chartier & Charles W. Johnson
Published by Minor Compositions

To-day (Thursday 12/12) at 9pm US/Eastern, 8pm US/Central time, my co-editor Gary Chartier will be appearing on the John Stossel show on Fox Business Network, to discuss our book, Markets Not Capitalism. We just got confirmation from the show that the segment would be airing tonight; here’s a blurb from the show’s blog:

MARKETS NOT CAPITALISM: Gary Chartier, co-editor of Markets Not Capitalism, says there’s actually a lot to hate about capitalism when the word suggests capitalists using political connections to get special privileges. . . .

Well, that’s not really quite the point of the book.[1] But of course we appreciate the chance to talk about some of the themes and to get the good word out.

Setcher DVRs. Markets Not Capitalism is coming to prime time.

WHO: Gary Chartier
WHAT: Prime-time interview on Markets Not Capitalism
WHEN: Thursday, 12 December 2013 9pm EST (8pm Central)
WHERE: John Stossel show, Fox Business News

  1. [1] Cf. illud, hoc, and Is this all just a semantic debate?, if’n you’re looking for a different sort of gloss on the point of the book.

Subsidized Order

Here’s a recent paint-by-numbers column on Spontaneous Order by John Stossel. It’s a passable introduction to the concept, and I will say that the opening illustration of spontaneous order in an ice-skating rink is nicely chosen. Then there is this:

At last January’s State of the Union, President Obama said America needs more passenger trains. How does he know? For years, politicians have promised that more of us will want to commute by train, but it doesn’t happen. People like their cars.

— John Stossel, Spontaneous Order, in The Freeman (May 2011)

It would be more accurate to say that people like their cars when they come with a massively subsidized network of government roads and a government-imposed glut of subsidized parking spaces.

Some subsidized trains cost so much per commuter that it would be cheaper to buy them taxi rides.

— John Stossel, Spontaneous Order, in The Freeman (May 2011)

As if subsidized highways and parking had no costs!

People’s cars are useless without this subsidized and monopolistic infrastructure, which is in artificially great supply due to the government’s monopolization of land use, which the people in question have to pay for, whether they use it or not, and which the people in question do then get to use at little or no marginal cost above what they were forced to pay in taxes. I wonder how much people would be liking their cars if alternatives weren’t locked out by government’s use of eminent domain and land-use mandates, or if people were free to pay — or to withdraw — the real marginal cost of driving, rather than the deformed structure of costs that government’s Infrastructure Monopoly has produced.

This is of course no argument for the desirability of ridiculous government-fueled high-speed heavy rail boondoggles, or any other sort of government funding of mass transit. Those are stupid too, and guaranteed to stay stupid as long as they are enacted through the political means. It’s not even an argument against the desirability of cars. But American car culture is no example of spontaneous order emerging from revealed preferences in a market free-for-all. It’s a perfect example of pervasive, intensive, map-redrawing government planning, from the repeatedly bailed-out, sometimes government-owned auto makers down to the parking lot of your nearest strip mall. The only way to find out how people will like to travel in a free market is to leave people free to experiment — and the current massive exertion of force to channel land into roads and parking lots, and wealth out of people’s pockets and into fancy new roads for the benefit of downtown merchants, billionaire sports team owners, and Wal-Mart distribution centers is anything but a free experiment or a spontaneous social process.

Against privateering

From an excellent recent feature on Strike the Root on a distinction I’ve discussed here before — what he calls a distinction between privatizing and marketizing, and what I called the distinction between privateering and the socialization of the means of production:

… [I]f the New York subway system is basically a government monopoly, then simply leasing, selling, or transferring it from our local Transit Authority to a politically-vetted outside agency doesn’t make it less of a monopoly per se. It’s just the same system with a different face and attitude to hide its statist legacy. All that’s changed is that the privatized option is supposedly run more efficiently.

Indeed, schemes like these are more about efficiency than they are about reducing the state’s presence and legacy.

So many problems arose with the Indiana deal championed by Stossel that even the local arm of the Indiana Libertarian Party opposed it. The contracts were for a 75-year lease in return for $3.8 billion to the government’s coffers – pretty sweet deal, no? The bidding process wasn’t very transparent, nor did it even involve local community input as a courtesy. Ultimately the foreign firms that were awarded contracts by the Indiana government to take over and manage its toll highway are now profiting from an infrastructure put in place neither by their own free efforts nor on their own dime, but by the state. It’s a de facto double charge to drivers, who have to pay high tolls to access the very infrastructure they financed through their exploited tax dollars in the first place. Is that so unlike the government taking away a family’s home via eminent domain, giving the land to a corporation like Wal-Mart, and then celebrating this criminal act as if it were a part of free enterprise?

Every market enterprise involves risks, costs, and profits. The market way is that all three aspects are privatized. . . . But Indiana ‘s privatization scheme involves privatizing the profits while passing on many of the original costs and risks to everyone else whether they like it or not. Governments aim to socialize all three factors — though here again it’s usually small cliques of the politically-connected who reap the most benefits at our unwitting expense. How utterly revealing! Why do so many privatization cheerleaders, however libertarian they may be otherwise, ignore that?

Because they want it both ways.

The appeal of public-private partnerships is that they seem to be a win-win situation — capitalists are happy because they get to make profits through shifting day-to-day management from politicians to themselves; politicians are happy because they still have ultimate control and bargaining power, and can claim to cut waste and big government just in time for the election; customers are happy because the services become nominally more efficient and there’s no taxes or surly public servants involved. Yes, they look like market entities on the surface, and yet we can still have the aegis of the State in the background so as not to appear too radical for the Zogby polls. After all, we love capitalism, right?

The idea that you can somehow run government like a business and get the best of both worlds is absurd because the incentives and economic calculation just aren’t there. Public-private partnerships reek of the Original Sin of state privilege, monopoly and exploitation, and they can never escape that legacy. Even the very language of privatization alienates so many people already that when libertarians talk about replacing government services with market-based ones, folks assume we’re shilling for corrupt things like Halliburton or Blackwater or wimpy school vouchers. Instead of merely privatizing the management of existing monopoly government infrastructure, let’s focus on augmenting and replacing it outside the statist complex, through marketization.

We’ve never had a central state agency handling food production and distribution to all 300 million Americans. We have thousands of independent enterprises big and small that have evolved instead, and this works just fine even with state subsidies and agencies in the mix. This is marketization in essence. We certainly don’t need a monolithic Food Agency to develop, and then evolve into an equally monolithic public-private partnership, because it would be no more effective than the decentralized market structure that currently feeds us.

So I propose to Indiana (and New York for that matter): Instead of just transferring a government-run highway into the hands of some politically-connected firm in a sweetheart deal, why not simply permit firms to build and run their own independent (privately built and owned) highways, subways, schools, hospitals, and taxi/limousine services to supplement and replace the existing statist monopolies? Or better, ignore the state and do it anyway?

— Marcel Votlucka, Strike the Root (2009-03-27): Don’t Privatize, Marketize! Boldface is mine.

Read the whole thing.

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