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Re: minimum level of public works




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Postings not related to the writing of the Manifesto or policy chapters
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Yazad, just a few random things for now... more (perhaps better thought
out things) later...

Watch out: These remarks are just for the sake of an argument...


>>How would you determine 'a minimum level of public works'?
>
>>Chirag
>
>by a simple thumb rule - if private firms can do it and charge market
rates
>- let them (eg toll roads), otherwise the government should contract it

>out. let private firms provide the public good (through competitive
>bidding) and pay them out of tax revenue.

Wouldn't it be difficult to show that private firms 'can't' or 'won't'
do it? At what point does the goverment intervene? Many goods that have
been claimed to have been 'shown' by economists to be 'public goods',
e.g. Adam Smith's famous example: the lighthouse, have been
traditionally provided by private firms... In the nineteenth century,
most British lighthouses were made the property of Trinity House, a
private firm....

Instead, wouldn't it be more advisable to provide the private firms with

incentives (and I don't mean dirigiste incentives) so that they would
enter into production? Incentives could be systemic changes that would
make it easy and profitable (to charge market rates) for private
provision of 'public goods'.

Wouldn't the private sector be more responsive to the production of such

goods and more aware of opportunities if it didn't take govt. provision
for granted?

How about corruption? Isn't the present system 'competitive bidding' (in

most areas)? I am sure, of course, you don't mean 'lowest-cost'
bidding... because I cannot see how that can be good in itself...

The tax money could have been used for the private provision of the
public good and/or the purchase of it by the consumer if the government
had not used coercion to take it away... to be spent on something the
taxpayer might not use at all...

Besides, self-interest isn't the only thing running a free market...

>it is an easy thing to say but very difficult to practise.

Truly.

Chirag
Undergrad student
TYBA (Econ, Socio)
St. Xavier's, Mumbai
chirag_k@hotmail.com





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