How Taxing Utilities Can Keep Governments In Check

How Taxing Utilities Can Keep Governments In Check



Under free market,​ all companies can talk all they want that all the​ stuff they put there is​ for my own good. However,​ if​ the​ product is​ overpriced or​ if​ it​ doesn’t serve my interest to​ get the​ product,​ I just don’t buy it.

No companies,​ full with corruption and inefficiency,​ will last in​ the​ market,​ unless it​ is​ governments companies.

The same mechanism doesn’t apply to​ governments program.

Indonesian governments build airplanes. it​ doesn’t make business sense. Then every one is​ required to​ buy air plane stocks. Then governments sell the​ planes to​ Indonesians’ airways companies.
Bad business gets smaller,​ smaller,​ and gone. Bad governments business gets bigger and bigger. There is​ no check and balance mechanism whatsoever to​ ensure that when governments spend money the​ money worth spending.

When governments build public school,​ people simply says that it​ benefits the​ people. Yet,​ how do we know that the​ benefits worth the​ cost? Governments’ public school can be plagued with corruption and efficiency. What are the​ intensives that the​ school boards will care about the​ kids’ interests when deciding curriculum?

Recently we heard costly debate on​ whether evolution or​ creationism that should be taught in​ school. Face it. Do we care? Most of​ us would rather learn business or​ economy so we can make big bucks.

I took graduate level Math classes straight without prerequisites and got as​ easily. Do I need to​ pay expensive teachers? Different kids have different needs and capability that properly harvested can really cut down costs of​ education. How do governments’ regulated system adapt to​ it?

However,​ the​ harm of​ governments’ program can be greatly reduced by requiring anyone that uses it​ to​ pay for the​ utility. That way,​ if​ governments build a​ pyramid and no body visits it​ then we know that its money wasted.

The list can go on​ and on. Currently poor people use bikes and the​ rich use car. Yet governments pay to​ build roads. the​ usage of​ roads is​ proportional to​ the​ usage of​ gas. There will be less cars and more bicycle if​ governments tax gasoline and use the​ money to​ build roads. That way,​ people that work at​ home (like me) and save a​ lot of​ cash hence getting rich faster. the​ only time people will buy car is​ if​ it​ worth’s to​ pay for the​ car and the​ road.

The exception to​ this principle is​ on​ business with economic of​ scale. Some Nobel winner,​ like John Nash,​ argues that deviation from competitive equilibrium is​ inefficient and encourages governments to​ actively split monopoly,​ or​ even create public monopoly. Some like Milton Friedman argues that even though it​ is​ true that some economic of​ scale is​ un-efficient. However,​ there’s nothing you​ can do about it. After all,​ the​ only naturally occurring worldwide monopolies nowadays are diamond monopolies,​ which will be toppled if​ it​ goes too much. the​ market failures fail to​ exceed typical governments’ failure.

Hence,​ I have no strong opinion.

If our country is​ full with corruption then cost for governments’ failure is​ huge. So market mechanism is​ the​ way. if​ corruption rate is​ relatively low,​ we may be able to​ play around safely with some governments’ intervention. Watch out for what Friedman says.




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