- Here is a John O’Sullivan interview with FA Hayek. It’s sometimes a bit tough to understand Hayek through his ridiculous accent, but I like the way that O’Sullivan interviewed him. Even though the two agree on a great deal, he still asked good questions and acted like an interviewer should: not quite playing gotcha, but making the person explain his thoughts clearly.
- Cheap talk has a precautionary tale, noting that privatization is not the same as introducing competition. In this case, the city of Chicago handed out the rights to parking meters to one firm. Rather than truly privatizing the industry (allowing anybody to own and operate parking meters), they have created a state monopoly. By doing this, the city collects a great deal of rents from the company, the company collects monopoly profits, and when the company raises meter fees, the public will be outraged at the company but not the city government. City council officials and other local government types can raise a false uproar, make populist speeches, and do exactly nothing.
- Shocking story of the day: a private company can do something better than a government bureaucracy. This time, it’s tracking “stimulus” dollars.
- Speaking of “stimulus” dollars, the President’s vaunted transparency campaign is clearly paying dividends.
- In the “oh, what a world we live in” files, Alex Tabarrok has an article regarding the Chinese government that sounds ridiculously similar to what we have in the US. The comments, though, are priceless. Take the first paragraph from the final comment, for instance: “Why is it an intervention into market? The state is the owner, it can set executive pay at whatever level it wants since this is the exercise between owner and employee.” Err…the whole “government taking over a firm” bit is an intervention in the market. There seem to be two syllogisms going on. In the world of the commenters, it goes: Government is in charge of (i.e., is the primary shareholder of) a firm. Shareholders of a firm should be allowed to set executive compensation. Therefore, government should be allowed to set executive compensation. Tabarrok’s syllogism is closer to: Government interference in industry is inefficient. Government is the primary shareholder in a number of firms. The primary shareholder(s) in firms have the authority to set executive compensation. Setting executive compensation is an alteration in the market. If government does not act as private shareholders would in a circumstance, that alteration is interference. Government has no incentive to act as private shareholders would in this cirumstance. Therefore, government setting of executive compensation is inefficient.
What do people learn in school these days? Apparently, neither logic nor economics…
- Pete Leeson argues that we should privatize the ocean if we want to get rid of pirates. That would probably do it, but there are some problems of enforcability and a lot of property rights issues to deal with. An easier method might be to offer letters of marque as well as bounties on pirates.