Arnold Kling  

An Anarcho-Capitalist Tranzy?

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An Inconvenient Question... Maybe the Variance of Gas Pric...

John Stewart writes,


Global governance is essential if nations are to cooperate to overcome the deficiencies of global markets...It can ensure that nations capture the benefits of their contribution to global social, economic and environmental projects that have collective benefits across nations. Only global governance has the power to redistribute wealth between nations in the same way that nations do between their members. Only global governance can prevent war and other destructive competition between nations by using its power to ensure that nations capture the harms they produce. And global governance is the most effective way of ensuring that all nation states use systems of governance that are fair and develop the potential of all their citizens.

This sounds like a clarion call for transnational progressivism. I can see the steam coming out of the ears of John Fonte and Mencius Moldbug. But then there's this:

In a vertical market, it would not be the goods and services traded in economic markets that would be produced and sold. Instead, the vertical market would trade in regulations, market frameworks, systems of education, laws, taxes, law enforcement systems, and programs that build better communities. Any component of governance could be developed and sold in a vertical market. The ‘goods’ of the vertical market would be any act of governance that could organise some part of the society more effectively.

That sounds like something out of David Friedman. But then there's this:

Unlike in economic markets, the products sold in a vertical market would not be purchased by individuals. Acts of governance commonly affect many people, not just individuals. So in a vertical market, acts of management would not be purchased by individuals. They would be purchased collectively by the group of citizens who benefit from the management.

Stewart thinks that anarcho-capitalism will not work, because government services produce a free-rider problem. As the textbooks would say, governments produce public goods. As Bryan would say, government services produce positive externalities.

So how would you solve this free-rider problem? Stewart writes,


The simplest way of overcoming this problem would be a requirement that all who benefit from an act of governance must pay for it if the majority decide to buy the governance.

I don't get that. Anyway, later on, he has an argument for what is wrong with democracy.

consider how ineffective an economic market would be if it were organised in a similar way. A comparable economic market would be one in which there were only two possible producers of goods and services. Each possible producer would develop a package of all the goods and services that each citizen would have over a three or four year period. Citizens would then choose which package would actually be implemented by voting for the producer of their choice. They could not pick and choose goods and services out of each package. They could have only one package, in its entirety. Such a system would obviously be far inferior to our current economic markets. Our present democratic systems of governance share all the features that would make such an economic system incompetent at satisfying the needs of consumers.

Pointer from Creative Capitalism.
I don't really get this guy. I was just intrigued by the fact that he brought up the market-in-governance idea.


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CATEGORIES: Political Economy



COMMENTS (5 to date)
Eric Crampton writes:

I know I've seen before the analogy that democracy is like voting for a pre-made shopping cart that everyone gets stuck with and has to last you the next 4 years. I'd thought that analogy came from Don Boudreaux.

Alex J. writes:

"They would be purchased collectively by the group of citizens who benefit from the management."

And who gets to decide which group benefits from the management?

When I think global government, I think of the Roman Empire, the Mongolian Empire and the UN's oil-for-food program with no escape. When he says global governance is the most effective way of ensuring fair governance, what possible example could he provide?

liberty writes:

"Acts of governance commonly affect many people, not just individuals. "

Eh?

Which of us are not individuals?

Eric Crampton writes:

"Which of us are not individuals?"

I'm not. I'm an autonomous collective of varied homunculi. They take turn wielding executive authority....

Drogum writes:

"Global governance is essential if nations are to cooperate to overcome the deficiencies of global markets..."
Isn't government the biggest cause of inefficiency in the market? In his very first sentence he starts off with the wrong premise, how do I take him seriously from there?

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