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#1
05-02-2007, 04:25 PM
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It\'s a shame about my street
A very nice little old lady that lives on our street decided that there was just too much trash along the sides of the public road that we live on. She canvased the neighborhood looking for volunteers to help her pick up the trash. Since my wife takes regular jogs with our dog, she said she would be happy to pick up any trash she saw while running.
I have tried to explain to her about all of the free riders who will benefit from all of the positive externalities she will be creating, which will surely prevent her from picking up the trash. I mean, I don't want her wasting her time and effort on something that any economist who understands the theory of positive externalities and public goods knows will end in failure. But she won't listen. She just keeps picking up trash. She's just a girl though; it's not like she can understand simple economics. 
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#3
05-02-2007, 04:31 PM
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Re: It\'s a shame about my street
[ QUOTE ]
A very nice little old lady that lives on our street decided that there was just too much trash along the sides of the public road that we live on. She canvased the neighborhood looking for volunteers to help her pick up the trash. Since my wife takes regular jogs with our dog, she said she would be happy to pick up any trash she saw while running. I have tried to explain to her about all of the free riders who will benefit from all of the positive externalities she will be creating, which will surely prevent her from picking up the trash. I mean, I don't want her wasting her time and effort on something that any economist who understands the theory of positive externalities and public goods knows will end in failure. But she won't listen. She just keeps picking up trash. She's just a girl though; it's not like she can understand simple economics. [/ QUOTE ] Suppose she values having a clean street at 10 utils. If it costs her -100 utils, she will not clean the street. However, if she finds 10 other people who value having a clean street at 10 utils, they can split the cost of cleaning it, and it gets done, even though some other people might benefit from it and have no work. Making these types of arrangements is reasonable when you have a small number of people involved. For example, your street can't have more than a few dozen people on it. This method falls apart the more people are needed to agree to get it done. For example, if she lived on a really large street that took -100,000,000 utils to clean. She surely isn't going to clean it alone. She isn't going to clean it if she finds 10 people to help her either. She's going to need to find thousands of volunteers to help before it becomes worthwhile to clean. Free rider situations are easy for small groups. Much harder for large. Your analogy is like saying if I jump off of a 5 foot ledge and don't break my leg, jumping off a 50 foot cliff surely is no problem. Sorry, its a strawman.
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#4
05-02-2007, 04:49 PM
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Re: It\'s a shame about my street
[ QUOTE ]
[ QUOTE ] A very nice little old lady that lives on our street decided that there was just too much trash along the sides of the public road that we live on. She canvased the neighborhood looking for volunteers to help her pick up the trash. Since my wife takes regular jogs with our dog, she said she would be happy to pick up any trash she saw while running. I have tried to explain to her about all of the free riders who will benefit from all of the positive externalities she will be creating, which will surely prevent her from picking up the trash. I mean, I don't want her wasting her time and effort on something that any economist who understands the theory of positive externalities and public goods knows will end in failure. But she won't listen. She just keeps picking up trash. She's just a girl though; it's not like she can understand simple economics. [/ QUOTE ] Suppose she values having a clean street at 10 utils. If it costs her -100 utils, she will not clean the street. However, if she finds 10 other people who value having a clean street at 10 utils, they can split the cost of cleaning it, and it gets done, even though some other people might benefit from it and have no work. [/ QUOTE ] lol at "utils". Here are the two possible scenarios: 1. Value(cleaning street) > Value(not cleaning street); Wifey cleans street. 2. Value(not cleaning street) > Value(cleaning street(; Wifey doesn't clean street. [ QUOTE ] Making these types of arrangements is reasonable when you have a small number of people involved. For example, your street can't have more than a few dozen people on it. This method falls apart the more people are needed to agree to get it done. For example, if she lived on a really large street that took -100,000,000 utils to clean. She surely isn't going to clean it alone. She isn't going to clean it if she finds 10 people to help her either. She's going to need to find thousands of volunteers to help before it becomes worthwhile to clean. [/ QUOTE ] You can make up numbers all day long to show anything you like, but they still don't. [ QUOTE ] Free rider situations are easy for small groups. Much harder for large. Your analogy is like saying if I jump off of a 5 foot ledge and don't break my leg, jumping off a 50 foot cliff surely is no problem. Sorry, its a strawman. [/ QUOTE ] Your analogy of my analogy is a bad analogy. It isn't a strawman. It shows that people will undertake actions for which they receive the primary benefit, regardless of "free riders" and "positive externalities." And only they get to subjectively value the perceived benefits vs. the perceived costs. Any action can have both positive and negative externalities depending on the subjective value system of an observer of the action. The solution to the street trash problem is not to institute some non-market-tested monopoly coercive collective action solution, but rather to fix the thing that causes the problem: nobody owns the street. You can define away any problem you like as "too large" to be handled by individual action. How about "crime"? That certainly affects an enormous group, yes? No possible individual solutions there. Must have a coercive collective monopoly solution imposed on everyone! Except that it is actually private investment by individuals that deters crime, and that deterent effect has massive "positive externalities" that reduce the total level of crime.
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#5
05-02-2007, 04:56 PM
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Re: It\'s a shame about my street
The freerider situation where one person (or a small group) can overcome the cost to gain a benefit is the simplest free rider case. Very few people have any objections to this case.
Yesterday I squeeged a public basketball court so I could play. Some people played afterward and they "freerode" on my effort. No one is denying this happens. But if squeegeing the court was a very difficult activity, I wouldn't have done it unless I would have gotten help. If there were more groups that wanted to play and valued playing enough to pay the cost (help squeegee), then the court gets squeegeed. This is clearly a better outcome than no one doing anything. In small situations, voluntary agreements work very easily. I can find 10 people to help me, we are done, even if 15 people decide to play afterward. They free ride, no one cares. However, when you have a very large group (in the millions of people), its (practically speaking) impossible to make such agreements. When these problems are very important to survival (national defense for example), the consequences of inaction are far worse.
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#6
05-02-2007, 05:27 PM
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Re: It\'s a shame about my street
[ QUOTE ]
The freerider situation where one person (or a small group) can overcome the cost to gain a benefit is the simplest free rider case. Very few people have any objections to this case. Yesterday I squeeged a public basketball court so I could play. Some people played afterward and they "freerode" on my effort. No one is denying this happens. But if squeegeing the court was a very difficult activity, I wouldn't have done it unless I would have gotten help. If there were more groups that wanted to play and valued playing enough to pay the cost (help squeegee), then the court gets squeegeed. This is clearly a better outcome than no one doing anything. In small situations, voluntary agreements work very easily. I can find 10 people to help me, we are done, even if 15 people decide to play afterward. They free ride, no one cares. However, when you have a very large group (in the millions of people), its (practically speaking) impossible to make such agreements. [/ QUOTE ] Oh yeah? Insurance FTW. [ QUOTE ] When these problems are very important to survival (national defense for example), the consequences of inaction are far worse. [/ QUOTE ] See our AIM conversation. Insurance works fine for this as well.
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#7
05-02-2007, 05:33 PM
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Re: It\'s a shame about my street
[ QUOTE ]
[ QUOTE ] The freerider situation where one person (or a small group) can overcome the cost to gain a benefit is the simplest free rider case. Very few people have any objections to this case. Yesterday I squeeged a public basketball court so I could play. Some people played afterward and they "freerode" on my effort. No one is denying this happens. But if squeegeing the court was a very difficult activity, I wouldn't have done it unless I would have gotten help. If there were more groups that wanted to play and valued playing enough to pay the cost (help squeegee), then the court gets squeegeed. This is clearly a better outcome than no one doing anything. In small situations, voluntary agreements work very easily. I can find 10 people to help me, we are done, even if 15 people decide to play afterward. They free ride, no one cares. However, when you have a very large group (in the millions of people), its (practically speaking) impossible to make such agreements. [/ QUOTE ] Oh yeah? Insurance FTW. [ QUOTE ] When these problems are very important to survival (national defense for example), the consequences of inaction are far worse. [/ QUOTE ] See our AIM conversation. Insurance works fine for this as well. [/ QUOTE ] It may work. I'm not completely convinced, but I see your point. My only point is proving that a single free rider case works out doesn't mean that ALL free rider cases can be resolved realistically with an optimal outcome. Maybe they are. But this is like saying all prime numbers are even because 2 is.
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#8
05-02-2007, 05:34 PM
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Re: It\'s a shame about my street
I have a problem with the solution that people are always offering: instituting large-scale extortion mobs. How.. is that solving anything? Seems to me that's like trying to make the streets cleaner by bombing them.
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#9
05-02-2007, 05:45 PM
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Re: It\'s a shame about my street
[ QUOTE ]
[ QUOTE ] [ QUOTE ] The freerider situation where one person (or a small group) can overcome the cost to gain a benefit is the simplest free rider case. Very few people have any objections to this case. Yesterday I squeeged a public basketball court so I could play. Some people played afterward and they "freerode" on my effort. No one is denying this happens. But if squeegeing the court was a very difficult activity, I wouldn't have done it unless I would have gotten help. If there were more groups that wanted to play and valued playing enough to pay the cost (help squeegee), then the court gets squeegeed. This is clearly a better outcome than no one doing anything. In small situations, voluntary agreements work very easily. I can find 10 people to help me, we are done, even if 15 people decide to play afterward. They free ride, no one cares. However, when you have a very large group (in the millions of people), its (practically speaking) impossible to make such agreements. [/ QUOTE ] Oh yeah? Insurance FTW. [ QUOTE ] When these problems are very important to survival (national defense for example), the consequences of inaction are far worse. [/ QUOTE ] See our AIM conversation. Insurance works fine for this as well. [/ QUOTE ] It may work. I'm not completely convinced, but I see your point. My only point is proving that a single free rider case works out doesn't mean that ALL free rider cases can be resolved realistically with an optimal outcome. Maybe they are. But this is like saying all prime numbers are even because 2 is. [/ QUOTE ] No, it isn't. Asserting that there exist "free rider problems" that cannot be "solved" through voluntary action is not something that can be done objectively, and saying that such a "problem" exists does not show that the statist's perpetual proposed solution, a monopoly coercive scheme that is untested by the market and imposed on everyone, will actually "solve" the "problem", or solve it in the best possible way. Maginot Line FTL.
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#10
05-02-2007, 05:50 PM
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Re: It\'s a shame about my street
Borodog:
You are doing a massive disservice to our Austrian cause. Your wife is clearly behaving irrationally. In accordance with the Austrian analysis, we would have predicted that your wife would rationally self-maximize, which would clearly involve a well-marketed, aggressive business deal with the old lady (and if there weren't any cops around, beating the old lady and taking her purse). But then, women already disprove Austrian logic. We already know that they act irrationally [img]/images/graemlins/smile.gif[/img]
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