Kevin Carson wrote:
From: Bryan Caplan [EMAIL PROTECTED]
First, the roads and airports are already here, so there would not be
much of a decentralizing effect of cutting off subsidies and eminent
domain now.
But because of the effect of subsidies in distorting the market price link
between quantity supplied and quantity demanded, the system will always tend
to be overwhelmed with demand beyond its capacity.
You're conflating subsidies with lack of congestion pricing. They're
separate issues.
If you take away the sugar tit, and build or expand airports and highways
only on land that is willingly sold, with building and maintenance costs
obtained entirely from weight-based user fees, the costs of shipping will
continue to rise dramatically, and the system will continue to become more
congested until it reaches the breaking point. Ongoing maintenance costs
are an important issue in their own right, BTW--the highway beds weren't
designed to handle the abuse caused by 18-wheelers.
I agree that lack of user fees is a problem. But what lack of user fees
and concentration have to do with each other remains mysterious.
Second, at least part of the subsidies have been to sustain small
communities that can't carry their own weight. That was one of the main
pro-airline regulation arguments - cross-subsidizing small unviable
airports with monopoly pricing in big cities.
How small a community are we talking about here? Economists who specialize
in issues of economy of scale--Walter Adams and Barry Stein, for
example--argue that production in large-scale manufacturing industry takes
place at many times peak economy of scale.
This is the standard argument of fervent antitrusters, but it does not
strike me as remotely convincing. There are all sorts of fixed costs -
harder to measure but just as real - that their estimates ignore. And
intuitively, why would firms keep expanding well beyond their efficient
scale? If you want to blame legal persecution of smaller firms, you
would have an internally consistent story, though it is hard to see what
this persecution consists in.
But there's no inherent
barrier to such a diversified local economy that couldn't be solved by
intensive education in (the 1970s version of) Karl Hess, Colin Ward, and the
*Appropriate Technology Sourcebook*.
I'd say they're just crackpots.
1. What Tucker calls the money monopoly in fact leads to a much
higher rate of monetary growth than free banking would.
But how much *availability*, to what groups, and at what interest cost?
Banking, historically weighed down with draconian pro-smallness
regulations (branch banking laws) seems like a particularly bad example
for you.
In any case, what do you think banks are doing now? No bank is big
enough to have much effect on depositor or borrower interest rates.
They lend to people who can repay at interest rates that adjust for
default, etc. Why would small banks be any different?
But at least as important is the ongoing restriction of
access to land, by enforcing absenee landlord rights over tenants and over
unoccupied land. It is by this ongoing restriction of access that occupier
and user has to pay a monopoly price to the landlord.
How is vacant land different from vacant rental cars? Are we paying a
monopoly price for rental cars? Owning stuff you aren't currently using
is ubiquitous, and getting rid of it would be a disaster.
3. Tariffs, as I said, are globally deconcentrating. Without them,
inefficient national industries would be driven out of business by the
world's best.
Historically, though, tariffs also first helped to build up concentrated
industry on a national scale *within* this country.
Fine. That's the way a lot of pro-smallness regulation works. But this
is just the flip side of my original point about globalization: Yes, it
is increasing concentration in *some sense of the word*, and yes, this
increased concentration is a good thing.
First Britain, then the
U.S., industrialized under the protection of tariffs, and then adopted free
trade as an ideology when it was safe to do so.
So would U.S. and U.K. have been worse off if they had never had
tariffs? Or what?
During the 1990's, we were able to see the California military high-tech
sector switch significantly into civilian production. The latter may
have been less concentrated in some ways, but it is not a clear call
either, even in the areas where copyright doesn't matter.
Nevertheless, the high tech industry is the collective beneficiary of past
state capitalism or military Keynesianism, and its ability to make such
strategic changes is heavily influenced by a privileged position resulting
from previous state aid to accumulation.
Hard to see how previous government contracts improve your ability to
make strategy changes. The reality looked quite different - tough years
for defense firms.
I've heard this whole story many
