Controversial Government Services

Matt Yglesias channels a previous Mere Aggregation post in response to a silly Twitter debate he had with Jim Harper of the Cato Insitute:

In some people’s heads, the existence of public functions is presumptively illegitimate. When people point out that many of these functions are, in fact, useful, they sometimes push back by noting that were the federal government forbidden from monitoring hurricanes, it’s not as if the hurricanes would go unmonitored. This is true…  instead of having a single National Weather Service tracking the weather, maybe we’d have three or four private firms all reproducing each others’ data and selling it to clients. We’d have systematically higher costs and maybe (?) a slightly higher quality product.

Alternatively, we could do the sane thing and be glad we have a well-functioning federal agency that performs this function. It’s possible that had we never created federal undertakings in this sphere all would be well. But we did, and — like many other federal functions — it seems to work quite well and be useful to people, to municipalities, to states, etc. So why complain?

I agree with the “why complain?” sentiment.  I see three distinct arguments here:

  1. We need the government to provide hurricane monitoring because the market cannot provide that function.
  2. The market could provide hurricane monitoring, but the federal government does a better job than the market would (cheaper, more accurate, or however you want to measure its performance)
  3. The federal government may or may not be better at providing this service than the market, but it seems to be doing a good job, so why complain?

I don’t think many people believe #1.  I think many people believe #2.  I don’t because I don’t know how well the market would do.  I think a lot of people believe #3.  I do.

If it were left me to decide whether the National Weather Service should exist or not, there is a good chance I would weakly prefer it not to exist.  But it would not be a priority.  And its existence does not outrage me.


Why I Like Jon Stewart

This is why.  Because even though you know Stewart disagrees with him on a lot of things, you can tell Stewart still respects him.

HT: Mike Munger

Government as Administrative Assistant

Noah Smith offers a practical critique of privatization of government services:

irreducible transaction costs are a fly in the libertarian soup. Completing an economic transaction, however quick and easy, involves some psychological cost; you have to consider whether the transaction is worth it (optimization costs), and you have to suffer the small psychological annoyance that all humans feel each time money leaves their bank account (the same phenomenon contributes to loss aversion and money illusion). Past a certain point, the gains to privatization are outweighed by the sheer weight of transaction cost externalities.

For certain things, government provision relieves individuals of the mental burden of engaging in numerous small transactions while imposing only relatively minor costs.  Noah argues that such a society “feels freer”.  This is an interesting argument for government intervention, and Noah makes a convincing case.  The anarcho-capitalist utopia does seem like a huge hassle doesn’t it?

How would a libertarian reply?  Perhaps by suggesting that institutions would emerge to relieve the individual of many of the expected burdens.  For instance, one might be able to join a group that allows access to a network of parks, benches, and roads for a periodic fee, thus eliminating the need to initiate a separate paying transaction every time one wants to sit on a bench.  One might also add that we have no idea what would happen, but if these hassles were a big problem for people, the market would probably find a way to fix them.

That said, unless you are writing your libertarian manifesto, it’s hard to disagree with Noah.  Arguing for real-world action on the finer points of libertarianism can get you into trouble.  Do you really want to lead the fight against government-provided parks?  You might even be right, but who cares.  There are more important things.

PS: The comments on Noah’s post are worth reading.