"Most Living Things are Microbes; Most Philosophers are Living Things; Therefore, Most Philosophers are Microbes"

In a follow-up to today's column, Paul Krugman continues his discussion of the problems with government outsourcing. This is from answers to several reader questions and comments about the column:

Selling Out, Money Talks: ..I agree that in principle outsourcing can pay. In fact, we all agree that some (many) things should be outsourced: to go to a reductio ad absurdum, nobody thinks that the ham sandwiches at the Education Department cafeteria should come from hogs raised on government-owned farms.

But the track record of privatization of traditional public services is, in fact, dismal — in two ways. Promised savings rarely materialize, and politicians nonetheless persist because they like the enhanced ability to reward their friends. ...

Often the problem is that there isn't a well-defined bottom line, or at least not one that can easily be embodied in a contract. The fall of FEMA had a lot to do with the fact that true disaster readiness requires more than just performing a set of specified tasks, it's an overall attitude that FEMA had in the Clinton years but lost once everything started being put up for bid. And don't get me started on using hired guns to provide security...

Almost all the real arguments are arguments in favor of competitive markets, not private ownership per se. Where a competitive market isn't feasible — which includes most of what the government does — there's no, zero, zip actual neoclassical argument "proving" that privatization is a good idea. Instead, it comes down to complicated issues involving principal-agent problems — and it's just as easy to use those arguments to make a case against privatization as for it.

So what sound like authoritative arguments for privatization are actually specious: most markets work well; most market participants are privately owned; therefore, privatization is good. That's equivalent to: most living things are microbes; most philosophers are living things; therefore, most philosophers are microbes. ...

Comments

[john c. halasz]

O.K. I'll admit it. I'm an excrescence of microbes.

[calmo]

Where's our resident philospher to assess this modes ponens ponendo? Does it hinge on the tricky Most Philosophers are Living things? Fellow microbial little thing (I cannot say "excrescent pile", I cannot.), john, are there not quite a pile of dead philosophers? In fact by their own judgement, do they often not resort to identifying most of their detractors as 'brain-dead' or worse? I believe the 'soft spot' in this very seductive argument is right there: mostly philosophers B dead.
We are lucky to have eva.
About this whole Aristotelian business: This argument is Specious Type A. Therefore since it is of that ilk, it be No Good.
It is the administrators view of philosophy and not the deepest pondering on the planet, but the most expedient. No taste for tackling that framework of Specious types, no curiosity about the possible evolution of that framework, no puzzling about how there may be provisions for exceptions, no mulling over how an instance might undermine the entire structure and cause a logical revolution along the lines of Kuhn. Nope, just get us a decision procedure about whether it is or is not Specious.
Truth be told, these people hate philosophy and can't wait for quitting time.

[Gavin]

Speaking of competitive markets, I have always wondered about the source of the benefits of free trade. I know about comparative advantage but most trade takes place between similar countries. Germany exports beer to the U.S. and imports beer from the U.S. Germany exports cars to the U.S. and imports cars from the U.S.

So do the benefits of free trade arise from the increase in competitive markets rather than comparative advantage?

[Richard]

Nothing is better than freedom.
A warm beer is better than nothing.
Therefore a warm beer is better than freedom.

An incorrect syllogism is invalid.
Invalids requires medical care and attention.
Therefore an incorrect syllogism requires medical care and attention.

[calmo]

Richard, experienced syllogisist maybe more, why-o-why would one ever go beyond "A warm beer is better than nothing"? In what way, pray tell, is "A warm beer is better than freedom" an advance, an improvement upon the former, the premise from which we argue ferociously?
This is always the mercilessly wicked thing about philosophy that the premises are always so much more glorious and triumphant than the ergo bits. They are not content with 'A warm beer is a warm beer.' and fear being hooted off the stage. [Compare "An angy mob is an angry mob" by non-recognized philosopher and big hooter, Bob Marley. Some tautolgies aren't necessarily so.]
Waiting for the eva rescue...

[evagrius]

Yes. The premises are always more tricky than the ergo, the bit that follows. The conclusions are sometimes a little off, to say the least.

As for privatization- it all depends on the terms, ( sigh).
What's a market?
What's a "market participant"?
What does "privately owned" mean?
And...the big one, what's "good"?

Where's Aristotle and Tommy Aquinas when we need them?

To be frank, the arguments for privatizing what are essentially public needs and goods are specious.

Private is individual is "self-sufficient". Public is "personal" is therefore dependent on relationships of mutual dependence.

Private things are purchases of consumer goods, entertainments, pleasures. They can be bought at any time and at any level. The value of the purchase can be ascertained fairly quickly.

Public things are such things as education and health and are public goods. They depend on complex relationships of mutual interaction. Their value is not easily determined often taking years before becoming apparent, ( Doc, since the last time I saw you,( 6 months ago), I feel much better. Thanks for the advice. Teach, that advice you gave me 5 years ago was really right, thanks!).

[don]

It seems to me that privately-provisioned goods and services are best when there is no free-rider problem. Public goods are mostly those things that we love to have, but hate to pay for, like clean air and water. Public goods are also those goods that are natural monopolies (with attendant free-rider problems), mostly in the area of communications, e.g., highways, electrical transmission infrastructure, internet infrastructure, etc. And of course, the state must have a defensible monopoly on the exercise of violence, or it isn't actually a state. (e.g., Iraq)

Private actors can provide public goods, but as agents of the state, they are in the public realm when doing so. All the state has done by hiring out the work is create an opportunity for profit-making where none had existed before. If, in fact, it is true that the profit motive will make a private actor performing public work more efficient, it is a sad commentary on th competence of the officials we have elected to manage our tax money and our public sector employees.

Properly managed, the state should be able to capture the profits of the private actors by diligence in management. But there's the rub--when the state captures profits, the result is that it fails to spend all of its money, risking a loss of money (as people demand a return of the surplus) and power by dint of having done a good job. I believe that is where the perverse incentive lies that makes out-sourcing government sometimes attractive, along with the ability to buy votes in the process.

[bakho]

Any thoughts on privatizing state lotteries?

The idea is to lease the lottery to a private company in exchange for cash that would go to college scholarships and help attract high quality professors.

http://www.wthr.com/Global/story.asp?S=5807392&nav=9Tai

[bakho]

That would be Mitch Daniels new idea. Lease the toll road first, Next lease the state lottery.

[evagrius]

Gee, why not privatize the whole government while we're at it?

Get honest. Remove bribery and corruption at its roots.

All of us can then work for the Wal-Mart government.

[bakho]

Privatizing State Lotteries. Is this a good idea?

http://www.indystar.com/apps/pbcs.dll/article?AID=/20061214/LOCAL19/612140466