Saturday, February 16, 2013

Putting all our eggs in one basket

A friend of mine, let call him John Doe, accused me of wanting to put all my eggs in one basket because I do not support governments ruling our lives. He claimed that supporting just the free market is putting my eggs in one basket. For him, having both the market and the government is not having his eggs in one basket.

Unfortunately, John does not understand that free market is not a thing but is the millions and billions of voluntary interactions that happen on a daily basis. No one person or organization has control over the free market. When government enters the picture, however, they take control and become the final arbiter in all decisions.

Let us look at a few ways in which John supports putting all our eggs in the one basket called government.

At one point, John pointed to roads that were run by private organizations, showing how badly the were run and claiming that this form of public-private partnership shows how a free market in private roads would work. In a free market, there is competition that forces producers to keep costs low and provide high quality customer support. Government granting one private group a private monopoly is completely different from the free market in that if a monopoly existed in a free market that tried to charge high prices for low quality, competitors can rise up and provide new options. However, in the public-private venture, only government decides who can provide road service. Our roads egg is still in the government basket.

What about healthcare. While John claims to not like the Affordable Care Act, popularly known as Obamacare, he claims it is better that what we had previously. Previously we had government taking more and more control over healthcare decisions and forcing prices up in the name of saving lives. Since the saving lives never materialized, any rational person would support ending government involvement in healthcare and letting market participants control their healthcare decisions. Unfortunately, politicians are insane and will continue to do the same thing over and over and keep expecting different results. Obamacare places more of our healthcare eggs into the government basket.

What about emergency services? Police and fire protection? Who controls these services? Government. And since the government is not required to provide these services to anyone, when they fail to provide their service, we can make no claim. In the free market, protection services would be required to provide service to those they contracted with. And if they failed to provide service, they could be held responsible. Again, more eggs in the government basket.

What about arbitration disputes? In the free market, arbitration would be handled through independent private arbitrators. Private arbitration still exists but government has made claim to being the final arbitrator. If you have a claim against the government, you have to go to the government and have them arbitrate the dispute. More eggs in the government basket.

What about the rest of the economy? Surely government does not provide every service and the haven't given grants of private monopoly in every market. John however supports government regulation in all businesses. Government should decide how businesses are run and any private decisions made are only made at the pleasure of the government. Private labor agreements should be over ruled to ensure that people have a livable wage and profits should not be too large, economics and reality be damned. Every last egg from the bounty of the market should be placed in the government basket. No part of our lives should be free from government control.

So how do we get all of our eggs out of the one basket? We need private firms providing the services that we thought that government should provide. We should have competition so that we are not putting all our eggs in one basket. Only the free market can insure true competition.