Comments on: A Slight Definition

By: bhurt-aw

bhurt-aw — Tue, 17 Jan 2006 21:01:50 +0000

So what would happen if Minnesota outlawed monopolies, and specifically tried to break up Microsoft? Microsoft is incorporated in Delaware, IIRC, and has it’s headquarters in Seattle. Or would Microsoft simply laugh at them? Minnesota could then try to intervene in the relationship between Microsoft and Dell (a Texas company)- but again, it can’t really do much. But Microsoft’s monoply does effect Minnesota, quite deeply. Minnesota, by itself, simply isn’t big enough to deal with the issue.

Let’s say there’s a company that wants to build a plant that’ll spit out a bunch of air pollution, and it wants to build it in the western part of the state. Minnesota says no- we don’t want the air pollution. So the company says OK- and builds the plant across the border in South Dakota. We still get all the pollution, but now we get none of the taxes, nor can we do anything about the pollution.

And when it comes to things like greenhouse gasses, pollution released in China does have an effect on Minnesota. How do we tell China to reign in the pollution? How does China tell us to do the same?

Worse yet, in this situation, attempts to correct the failures of the market are penalized. The US’s attempts to internalize previously externalized costs (such as pollution, and worker health and safety and economic justice) simply cause the jobs to get moved to places that aren’t trying. Which means the US doesn’t get the jobs, and gets all the problems it tried to avoid. The response is- logically enough- to repeal the environmental laws, wage minimums, worker safety laws, etc. If the costs are going to be externalized anyways, we might as well get the benefits (such as they are).

Welcome to the new gilded age.

The other alternative is to truely segment the market- to simply not allow stuff made in sufficiently different regulatory domains to be imported. In a word, protectionism. Except that anyone who has been paying attention knows that this doesn’t work.

By: Candide

Candide — Tue, 17 Jan 2006 17:51:13 +0000

> The goverment has to be large enough to effect the market, and
> large enough the members of the market can not escape the
> “intervention” of the goverment just by moving to a different part
> of the market. If it’s against the law to do something profitable here,
> move it to some place where it is legal (or at least not illegal)- South
> Carolina or China or Bermuda or where ever. Basically, the
> goverment needs to be as big as the entire market in order to be
> effective in fixing the problems of the market.
>
Yes, if you treat the market as one atomic entity, you’re right. But it’s not one atomic entity — it’s nearly infinitely subdivisable. If a state illegalizes the sale of a product (say, cigarettes), it’s certainly large enough to effect the market, when the market is topologically limited to the state. Sure, boundary people might be able to run to a different state to circumvent the requirement (c.f.: “blue laws”, “Wisconsin run”), and that needs to be recognized by the state, but the requirements are there.

By: bhurt-aw

bhurt-aw — Tue, 17 Jan 2006 17:21:30 +0000

The goverment has to be large enough to effect the market, and large enough the members of the market can not escape the “intervention” of the goverment just by moving to a different part of the market. If it’s against the law to do something profitable here, move it to some place where it is legal (or at least not illegal)- South Carolina or China or Bermuda or where ever. Basically, the goverment needs to be as big as the entire market in order to be effective in fixing the problems of the market.

Now, talking about a world goverment brings in other problems- like how do you make sure the goverment remains responsible/responsive. But it’s the difference between the goverment having (soluable) problems, and the goverment being completely ineffective.