<story><title>The Hidden Cost of Privatization</title><url>https://www.ineteconomics.org/perspectives/blog/the-business-of-government</url></story><parent_chain><item><author>subverter</author><text>The problem in Keynes thinking on &amp;quot;social services&amp;quot; is that it&amp;#x27;s impossible to gather all of the knowledge necessary to ascertain what those would be. That knowledge is dispersed among ~320m citizens (in the U.S.) who each have particular wants and needs. And even if you could somehow attain that knowledge in one place, the likelihood of finding consensus on how a particular &amp;quot;social service&amp;quot; should be offered is next to zero. The end result? Nearly everyone disagrees with some of what government implements, which breeds resentment and causes gridlock much like we&amp;#x27;re seeing today in the U.S.&lt;p&gt;It doesn&amp;#x27;t have to be that way. By decentralizing decision making down to a level closer to the individual (if not the individual), more people get what they want. For example, right now there&amp;#x27;s a federal mandate for health insurance. Not everyone agrees with this mandate, so why not &lt;i&gt;at least&lt;/i&gt; push it down a level to the states? California can still have a mandate for health insurance, and Alabama can decide not to. And then, why not push it to the city&amp;#x2F;county level? If you don&amp;#x27;t agree with San Francisco&amp;#x27;s mandate for health insurance, simply move to Oakland. You don&amp;#x27;t even have to move states, let alone countries.&lt;p&gt;Why do so many oppose such a solution where everyone can much more easily find a place where they agree with the &amp;quot;social services&amp;quot; offered (or not)?</text></item></parent_chain><comment><author>rayiner</author><text>&amp;gt; Why do so many oppose such a solution where everyone can much more easily find a place where they agree with the &amp;quot;social services&amp;quot; offered (or not)?&lt;p&gt;Because it creates collective action problems. Countries can exercise their sovereign powers to control commerce and the flow of people so as to reinforce their chosen social welfare systems. If they offer universal healthcare, for example, they can control immigration to manage the burden on their system (and keep out people who only move in when they get sick or to retire). U.S. states are precluded by the Constitution from doing that. Say Marylanders decide to pay higher taxes to support generous social services, and Virginians decide to stick to lower taxes and no service. There is nothing Maryland can do about free-loading Virginians who cross the border as soon as they get sick.[1] Likewise, say Virginia decides to reintroduce child labor, which gives Virginia a competitive advantage in producing cheap consumer goods. There is nothing Maryland can do to stop the flow of trinkets from Virginia undermining good Maryland companies whose prices are higher because they don&amp;#x27;t use child labor.&lt;p&gt;It&amp;#x27;s helpful to view the Constitution&amp;#x27;s Commerce Clause and Privileges and Immunities Clause as  a two-pronged economic construct. One prong says that the U.S. is a totally free market internally for goods and labor. The other says that the federal government can intervene to address any collective problem actions that creates. To the extent that the provision of social services has knock-on economic effects (and it has major knock-on effects), it comports with the Constitution&amp;#x27;s design for those things to get kicked up to the Federal government.&lt;p&gt;[1] See: &lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.washingtonpost.com&amp;#x2F;wp-srv&amp;#x2F;national&amp;#x2F;longterm&amp;#x2F;supcourt&amp;#x2F;stories&amp;#x2F;court051899.htm&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.washingtonpost.com&amp;#x2F;wp-srv&amp;#x2F;national&amp;#x2F;longterm&amp;#x2F;supco...&lt;/a&gt;.</text></comment>
<story><title>The Hidden Cost of Privatization</title><url>https://www.ineteconomics.org/perspectives/blog/the-business-of-government</url></story><parent_chain><item><author>subverter</author><text>The problem in Keynes thinking on &amp;quot;social services&amp;quot; is that it&amp;#x27;s impossible to gather all of the knowledge necessary to ascertain what those would be. That knowledge is dispersed among ~320m citizens (in the U.S.) who each have particular wants and needs. And even if you could somehow attain that knowledge in one place, the likelihood of finding consensus on how a particular &amp;quot;social service&amp;quot; should be offered is next to zero. The end result? Nearly everyone disagrees with some of what government implements, which breeds resentment and causes gridlock much like we&amp;#x27;re seeing today in the U.S.&lt;p&gt;It doesn&amp;#x27;t have to be that way. By decentralizing decision making down to a level closer to the individual (if not the individual), more people get what they want. For example, right now there&amp;#x27;s a federal mandate for health insurance. Not everyone agrees with this mandate, so why not &lt;i&gt;at least&lt;/i&gt; push it down a level to the states? California can still have a mandate for health insurance, and Alabama can decide not to. And then, why not push it to the city&amp;#x2F;county level? If you don&amp;#x27;t agree with San Francisco&amp;#x27;s mandate for health insurance, simply move to Oakland. You don&amp;#x27;t even have to move states, let alone countries.&lt;p&gt;Why do so many oppose such a solution where everyone can much more easily find a place where they agree with the &amp;quot;social services&amp;quot; offered (or not)?</text></item></parent_chain><comment><author>ErikVandeWater</author><text>It would work this way if the supreme court hadn&amp;#x27;t killed federalism over time by ignoring the 10th ammendment.&lt;p&gt;People don&amp;#x27;t really oppose federalism, but national level politicians win elections by promising benefits to interest groups to justify their existence. Promising to sit on your hands will never win an election.</text></comment>