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Sunday, April 6, 2008

RE: [LPplatform-discuss] Seeing Privatized Streets In Our Crystal Ball

Michael Wilson wrote:

MW) Maybe as time passes and the libertarian philosophy becomes acceptable to the general public new ideas on how to solve some of these issues will appear. (MW

Instead of setting up libertarianism as a faith-based initiative, I still think the common ground between minarchists and radicals/anarchists should be radical decentralism.  I would love for Susan's county to be free to declare itself anarchotopia, so she could report back to us how well it works.

MW) Canada took their air traffic control system some years ago and made a non profit of it and at the time I recall reading that the results were positive. (MW

Air traffic control is not a physical-network club good like streets and pipes.  Technology can sometimes make a good more excludable than before; Dan Klein cites electronic toll booths at  But the model of how humans react differently to goods based on their excludability and rivalry is as fundamental as rational self-interest itself. 

The prospects for overturning this model are extremely dim.  Coase won the 1991 Nobel prize for his 1960 paper explaining how property rights can overcome certain kinds of externalities. However, this work merely completed the framework of how the three primary kinds of market failure determine government's role, and that framework has remained essentially unchanged now for more than half of the total existence of economics as a science. The 2001 prize was shared by Akerlof, Stiglitz, and Spence for their 1970s work on asymmetric information, which is pretty much the only sort of market failure for which any theoretical progress has been made. However, almost all this work has been to just explain the observed responses to asymmetric information, and very little (if any) of it created new solutions.   The 1996 prize was also partly for work on asymmetric information, but Vickrey was also cited for his 1950's work on congestion pricing. Congestion pricing doesn't solve the problem of natural monopoly, it just shows how a natural monopoly can be more efficiently managed by the natural monopolist.