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Very Hot Topic (More than 25 Replies) Private enterprise is more efficient than Government enterprise? (Read 6361 times)
Jeff
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Re: Private enterprise is more efficient than Government enterprise?
Reply #50 - Aug 23rd, 2015 at 7:39am
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[quote author=404249425748484B270 link=1435394101/47#47 date=1440301390

So the citizens are like stockholders. You can't expect US citizen to derive no benefit whatsoever from having a stake at one of the most prosperous country in the world.

So they do derive benefits. Some get welfare checks. Some got universal healthcare. Some got job protection. Everybody got something.

[/quote]
In the U.S. our Constitution creates a government to serve the people. It's nothing at all like a corporation.
If you have to try to present it as some sort of business relationship (which it isn't) it's more like the government are employees of the people. If they work, we pay them and they get to keep their jobs. Citizens are not "shareholders" in the country, they are Citizens and the government works for them.

The only benefits to the people are defense of the nation, and protection of their rights and property, equally under the law.

Transfers of wealth by government take from productive people and give it to whoever the government chooses. "Everybody" does not get "something" in a welfare state. Some benefit, others pay.
  

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genepool
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Re: Private enterprise is more efficient than Government enterprise?
Reply #51 - Aug 31st, 2015 at 11:16pm
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Okay,

Jeff is a citizen.

Jeff have right for protection from government.

Okay Jeff, you're a millionaire. Now we face 2 threats here.

First, the russian mob may attack you and take your money.

Simple. Says Jeff, I'll pay tax for military and we'll fight the russian.

Aye aye.

80% of the citizens are poor. They want your money.

Simple. I'll pay cops and we'll kill them all.

Here's the thing. It probably cost us more money to kill those welfare parasites than to give them food or give them job.

As countries get richer and richer, governments realized that appeasing the poorest makes more economic sense than killing them. Libertarians stuck in absolute 0 redistribution of wealth rate, which seems to be the optimum rate a long time ago when we were poorer.

Well, said Jeff, I don't give crappity smack which one is cheaper. I am not giving a penny. It's all mine. I have right over my poverty.

And what happens is all you have is right. With so many people against you and so few on your side, right will just mean absolutely nothing.

Libertarianism has a point. Appeasing the poor may not necessarily cheaper than killing them. Many ungrateful poor people will just breed and breed. Many ungrateful immigrants will just come and take the money.

So yea there are issues to be solved in a relatively more libertarian ways.

See what I am saying? I am not saying that social democracy is right or libertarianism is wrong. They're both wrong. I have my own opinion. A mix between stability, democracy, and meritocracy.
  
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Jeff
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Re: Private enterprise is more efficient than Government enterprise?
Reply #52 - Sep 2nd, 2015 at 5:08pm
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genepool wrote on Aug 31st, 2015 at 11:16pm:
Okay,

Jeff is a citizen.

Jeff have right for protection from government.

Okay Jeff, you're a millionaire. Now we face 2 threats here.

First, the russian mob may attack you and take your money.


I'm more worried about the Klingons.
  

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genepool
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Re: Private enterprise is more efficient than Government enterprise?
Reply #53 - Sep 7th, 2015 at 10:36pm
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I think the opposition said something along this point.

You have a right.

But something need to happen for that right be an effective right.

A victim have a right to get his stuff back. However, the cost of getting his stuff back may far exceed the cost of stuff stolen. Also who is responsible to do that?

One solution is to have a government that would track down and punish thieves.

That would work if the number of thieves are few and the number of law abiding citizens are plenty. If every body steal no thing would work.

So that kind of government must be supported by the majority of the population.

No matter how right you are, your right means nothing. if too few support you. Actually this is not quite right either. In Dubai small number of citizens are doing fine in the middle of poorer immigrants.

How do such government supported by the people? I have no idea. However, once a country gets too rich, wealth redistribution seems inevitable. The key here is that the country must be too rich first. Hence capitalism is still absolutely necessary.
  
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stevea
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Re: Private enterprise is more efficient than Government enterprise?
Reply #54 - Sep 8th, 2015 at 8:15am
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Back on the original topic ...

Vexer wrote on Jun 27th, 2015 at 4:35am:
This seems to be a given fact, in the minds of our average Libertarian that Private everything is better than Public anything.  It's a cornerstone of their (your) philosophy.

But what if this was wrong?

At this point, 90% of the three readers that read this will get out their text-knives and start thinking about how to rebutt me, mostly by informing me how stupid I am because I smell like a goat. Which is, as always, very convincing.

For you other 10%, what about this:

Is there any objective way to show that Private Enterprise is in any way better, or more Efficient that Public (Government) Enterprise?




Yes.   You need to consider the multiplier effect of government spending vs private spending. For each dollar spent, how much GDP is created.

Note that all government spending results in correspondingly less private spending (the money either comes from direct taxation or borrowing which also costs taxpayers the debt service and higher capital rates, or by money printing that reduced saved money value).   So for every dollar, we can alternatively decide if is spent by government or by private sector.

Probably the broadest and most convincing study on the topic is by Christina Romer and her husband, David.  Romer is a Berkeley economist and the first Obama Whitehouse advisor, so partisan bias seems to not apply.  Also the evidence is very strong statistical stuff.

The Romers found that government spending had a significantly lower multiplier than private spending.
http://www.nber.org/papers/w13264.pdf

Quote:
The resulting estimates indicate that tax increases are highly contractionary. The effects are strongly significant, highly robust, and much larger than those obtained using broader measures of tax changes. The large effect stems in considerable part from a powerful negative effect of tax increases on investment.


The bottom line is unsurprising - the government gets less economic activity for it's dollars spent than private sector customers do.

Also this is a marginal result that applies for tax rates around the level of the past 4-5 decades.  If the government spending goes to zero - evaporates and there are no police and court nor national defense - this could have a very negative impact on GDP.

Less government for economic growth is rational and supported by evidence.  How much less is TBD.

  
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Vexer
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Re: Private enterprise is more efficient than Government enterprise?
Reply #55 - Oct 3rd, 2015 at 3:01am
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Dear Jeff, you wrote:

Right off the bat, you were told to look at empirical evidence from around the world throughout history. If you won't do that, you'll never learn. I predict you won't learn anything, ever.

You seem to equate “learning” with “agreeing with Jeff”.

Try to imagine if these were not the same thing? Is there any chance you could learn anything?

True, I’m slow to “learn”, but only because I am asking for empirical evidence.


I asked this in the OP:

Is there any objective way to show that Private Enterprise is in any way better, or more Efficient that Public (Government) Enterprise?

If you think this has been answered, tell me where.
  
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Jeff
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Re: Private enterprise is more efficient than Government enterprise?
Reply #56 - Oct 3rd, 2015 at 9:04am
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Vexer wrote on Oct 3rd, 2015 at 3:01am:
Right off the bat, you were told to look at empirical evidence from around the world throughout history. If you won't do that, you'll never learn. I predict you won't learn anything, ever.

I also gave a couple of good examples. East Germany v West Germany, North Korea v South Korea.
How about Eastern Europe v Western Europe? (When the Communists controlled the East and planned their economies.)
How about the rapid economic growth in China when they made part of their planned economy partly free?

Are you really so blinded by ideology that you can't see that the opportunity to profit and the potential to fail and lose your investment are great motivators of human beings, motivating them to work hard and come up with solutions to problems? Or conversely that a guaranteed job in a bureaucracy with guaranteed pay and benefit increases and the promise of an early and generous retirement also motivates people? Motivates them to keep a low profile, not take chances, never disagree with the boss, follow the rules to the letter and not worry about failure, because they can't fail if they just do nothing.

Private companies have competition, so they are required to produce better products at lower costs, or be driven out of business.

Government "enterprises" have cozy relationships with people who can give them more taxpayers money whenever they "need" it, and those are the people they are motivated to please, their political masters, not consumers.
  

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jzk
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Re: Private enterprise is more efficient than Government enterprise?
Reply #57 - Oct 8th, 2015 at 10:13pm
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As far as empirical data goes, it can't be too hard to find numerous examples. 

How about trash removal?  It costs the City of Chicago $231 per ton for residential city run garbage removal.   What is the cost in the private market?
  
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jzk
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Re: Private enterprise is more efficient than Government enterprise?
Reply #58 - Oct 10th, 2015 at 9:50am
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In one of his recent talks, Walter Block gives empirical evidence of market efficiency:

USSR Farms:

97% owned by Government account for 75% of GDP.
3% owned privately account for 25% of GDP.

Market more productive/efficient.
  
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