Doesn't their existing infrastructure, and social dependency on that infrastructure, give them a somewhat legitimate need for a bailout? If other, smaller, more efficient companies can replace everything the telecom behemoths do, then let the big boys suffer, but is that the case? Can smaller tech savvy companies do everything the large telecoms do or are we talking strictly about broadband internet?
"People like Friedman and Hayek have proved that markets are the ultimate source of truth, at least in this world."
I suggest you go re-read Friedman. First off, he did not prove that free markets are the best solution, he merely made a (very compelling) argument that it is so. Second, Friedman himself pointed out various examples where 'Market failure' can occur. One example he cites is about public works, for example people might be willing to pay a fee for using properly maintained sidewalks, yet it would be economically unfeasible for a private company to collect these tolls. So instead we all pay a small amount of tax and the government takes care of the sidewalk.
There are other factors that may may prompt a government intervention: in case of the telcos, the government may decide that having a phone line is a basic right, and that telcos are supposed to hook everyone up for a basic fee, with the easy hookups subsidising the ones in remote locations. If governments did not do this, then all the telco's would tell the few customers living in the sticks to get stuffed if they wanted a phone hookup.
I am not saying any of that is right or wrong, but there is nothing fundamental about letting the market economy run its course. It may be the most efficient, and there is a strong case for any government to think twice before interfering with the free market, but not even Friedman suggested to leave everything to the market.
Makes sense to me. However I can't help but ask - if the government didn't support these services, what would have happened?
sidewalks: probably wouldn't exist - except along the lines of "gated communities", with boards far more oppressive than the regular governments could ever dream of. In the cities where sidewalks are absolute necessities, the quality of the sidewalk would be directly proportional to the affluence of the neighborhood - and might even help propel runaway gentrification and disinvestment (or not, since any functional society needs people from a variety of economic levels - that's why they've got rent control in New York).
telcos: until the advent of wireless/satellite communication, the rural areas would almost certainly remain poorly or completely unconnected, putting them at a significant economic and social disadvantage. Industrialized farming would have had an even easier time taking over the farming market. Populations would be much more concentrated in the cities. On the positive side suburban sprawl would probably be significantly curtailed.
If free market principles applied to roads (and to a lesser degree power) the exact same things as above would probably happen, only much more so. As for water and waste... those are two things where the community, up to and including the international community, gets involved because it affects them directly.
Of course there are countless examples on the books along these lines, and where real money is involved it gets much uglier. Unless the government regulates it into something acceptable at the behest of the (generally angry) people, the rich and powerful will increasingly manipulate and monopolize the markets (and the law, and the money) legally and illegally for their personal gain regardless of how badly it affects others. "Free Market" is an oxymoron. Those who want it the most are always either rich or think they could be - and if they actually got it almost all would be disabused of their hopes and money rapidly.
A meddling beauracracy versus a greedy oligarchy -fiscal democrats versus moneyed republicans.
Yes, it is hard to attach a private cost to public goods (like sidewalks). But there is a rich history of private individuals filling public needs. Ben Franklin started the first volunteer fire company in the US. Unlike the existing 'fire clubs' in Boston, these companies would fight ANY fire, not just fires that happened to their members' property. He formed a local group with his immediate neighbors to pay homeless people to sweep the sidewalks.
Any time the government attempts to fill a need, it must be very careful to not squeeze out private competition. If only the government allowed to fill a need (by law) or if it isn't willing to contract out to private companies (eg, it is the only supplier, instead of supplier of last resort) then you will never get anything better than the government's solution. That might be the best solution, temporarily, but beurocrats hate change. It will eventually be a bad solution, and if it has squeezed out all private competitors there is no where else to turn.
"Be there. Aloha."
-- Steve McGarret, _Hawaii Five-Oh_
Legitimate reason for bailout? (Score:5, Insightful)
Re:Legitimate reason for bailout? (Score:0, Flamebait)
This is why we should seriously consider abolishing the government and leaving everything to the market forces.
People like Friedman and Hayek have proved that markets are the ultimate source of truth, at least in this world.
Though it is always funny to read how commie CEO's beg for state subsidies to help their mismanaged companies.
The market economy answer is of course: sell it if it doesn't work.
Re:Legitimate reason for bailout? (Score:5, Informative)
I suggest you go re-read Friedman. First off, he did not prove that free markets are the best solution, he merely made a (very compelling) argument that it is so. Second, Friedman himself pointed out various examples where 'Market failure' can occur. One example he cites is about public works, for example people might be willing to pay a fee for using properly maintained sidewalks, yet it would be economically unfeasible for a private company to collect these tolls. So instead we all pay a small amount of tax and the government takes care of the sidewalk.
There are other factors that may may prompt a government intervention: in case of the telcos, the government may decide that having a phone line is a basic right, and that telcos are supposed to hook everyone up for a basic fee, with the easy hookups subsidising the ones in remote locations. If governments did not do this, then all the telco's would tell the few customers living in the sticks to get stuffed if they wanted a phone hookup.
I am not saying any of that is right or wrong, but there is nothing fundamental about letting the market economy run its course. It may be the most efficient, and there is a strong case for any government to think twice before interfering with the free market, but not even Friedman suggested to leave everything to the market.
But what if they did? (Score:3, Insightful)
sidewalks: probably wouldn't exist - except along the lines of "gated communities", with boards far more oppressive than the regular governments could ever dream of. In the cities where sidewalks are absolute necessities, the quality of the sidewalk would be directly proportional to the affluence of the neighborhood - and might even help propel runaway gentrification and disinvestment (or not, since any functional society needs people from a variety of economic levels - that's why they've got rent control in New York).
telcos: until the advent of wireless/satellite communication, the rural areas would almost certainly remain poorly or completely unconnected, putting them at a significant economic and social disadvantage. Industrialized farming would have had an even easier time taking over the farming market. Populations would be much more concentrated in the cities. On the positive side suburban sprawl would probably be significantly curtailed.
If free market principles applied to roads (and to a lesser degree power) the exact same things as above would probably happen, only much more so. As for water and waste... those are two things where the community, up to and including the international community, gets involved because it affects them directly.
Of course there are countless examples on the books along these lines, and where real money is involved it gets much uglier. Unless the government regulates it into something acceptable at the behest of the (generally angry) people, the rich and powerful will increasingly manipulate and monopolize the markets (and the law, and the money) legally and illegally for their personal gain regardless of how badly it affects others. "Free Market" is an oxymoron. Those who want it the most are always either rich or think they could be - and if they actually got it almost all would be disabused of their hopes and money rapidly.
A meddling beauracracy versus a greedy oligarchy -fiscal democrats versus moneyed republicans.
Re:But what if they did? (Score:1)
Any time the government attempts to fill a need, it must be very careful to not squeeze out private competition. If only the government allowed to fill a need (by law) or if it isn't willing to contract out to private companies (eg, it is the only supplier, instead of supplier of last resort) then you will never get anything better than the government's solution. That might be the best solution, temporarily, but beurocrats hate change. It will eventually be a bad solution, and if it has squeezed out all private competitors there is no where else to turn.