18
Jun
2020
BMS ep 124: How to Defund the Police, and Eyewitness Account of CHAZ
This is one of the rare times when my areas of expertise are actually in popular demand. (The other time was when capital theory briefly became cool when Piketty’s book came out.)
I first spend an hour or so laying out the theory of how to think about “defund the police.” Then I interview Whitney Davis, a Rothbardian who happens to live down the street from CHAZ. Here’s the audio, and below is the video.
Great Podcast!
There’s a lot in this podcast (goo work Bob) but to start my criticism, there’s your comment along the lines of “It doesn’t matter who has the most guns, what matters is public opinion.”
I should listen again to get the quote exactly right, but anyway, that’s from memory only.
The problem I see, is that shows a misunderstanding of Democracy … a vote is a proxy for a battle, and the majority wins because the presumption is that the type of weapon involved results in non-linear advantage for the larger group (e.g. longbows, muskets, rifles, machine guns, mass production, etc). The moral preference goes towards voting rather than fighting because overall fewer people are killed, and anyway being on the losing side in a vote is usually much better than being on the losing side of a battle.
What I’m getting at in a somewhat tangential manner is that ultimately public opinion IS GUNS and that’s why it matters. Of course, that’s not true for every different technology system, but it is true (I believe) at present day tech level.
Similar problem comes up when you say, “The Mayor isn’t the one with the most guns” … but wait, if the democracy is working properly and the people who vote for the Mayor are serious about their votes (ok, I understand maybe modernity has softened us up, let’s ride that one out) then yeah … the Mayor IS the one with the most guns BECAUSE he got the most votes. Again, you need to see the election as a proxy for violence.
I don’t see elections as proxies for violence, but rather an attempt to make a contractual relationship between multiple people at once, rather than between two people (in my view, contracts are only legitimate between two people).
But I do agree with you that it’s not public opinion that matters, but who has the guns.
Ask yourself what is the danger of having a poor public opinion. If you said that the public would get guns and fight back, then you’re really saying that guns matter, not public opinion.
If you said that the public would just tell everyone that they’re unhappy and the Mayor and police were really bad people, and then did nothing else, then nothing would change.
The Mayor is only more powerful than the cops because the cops respect, to some degree, the rule of law. In a sense, the cops *allow* the Mayor to have more power.
Fairly recently I remember some Austrian Economist (forgot who, it was not Bob Murphy) bring up a case where the army was pointing their tank cannons at the public, then he says that at some point the army, moved by public opinion, turned their cannons toward the leaders, and the tyranny subsided.
He said that was an example of how when public opinion changed, it ended tyranny. But I don’t see it that way.
The people with the guns ended the tyranny, not public opinion.
On the issue of public opinion, there’s a number of important steps here.
The public very rarely has direct visibility of a special event like CHAZ, or like a guy killed by police (be that justified or unjustified) or a whole bunch of government actions. That means “public opinion” is almost always not first hand opinion.
I totally support episodes where the Bob Murphy Show does do those “on the scene” interviews, but unfortunately insufficient people listen to this type of show. What we have instead are the “Mockingbird Media” or if you prefer to call them “The Mighty Wurlitzer” … or whatever you like … but you know who I’m talking about. In this case there’s a process where we have real world events, then media talking points, then somewhere down the gullet after digestive process has run for a while … we have public opinion. As a consequence, public opinion does not always accurately reflect the events that took place on the ground.
This leaves the people in charge with a difficult decision: either worry about what happens, or worry about how it spins. You can see how we are heading down unhealthy territory already, but I think this can happen in any system, regardless of who those “people in charge” are and what type of marketplace is in operation.
Here is, I think, the TheBlaze article that Whitney Davis mentioned:
Videos show sreet preacher assaulted in CHAZ autonomous zone – TheBlaze
[www]https://www.theblaze.com/news/street-preacher-chaz-autonomous-zone-video
As far as the choking claim, she appears to be right. None of the videos in that article show the preacuer being choked, and no other videos of the event that I could find (before giving up) show him being choked.
At one point, someone briefly lays on his back after he rolls, or is being rolled, onto his stomach, but the man’s arms are under the preacher’s armpits.
And at one point, the preacher does appear to fake a passing out.
As for the suggested motives of the preacher as being an instigator, I think his actions are better explained by a legitimate desire to tell people what he’s there for (and then not really say anything, in my opinion). He says that if the other protesters have a right to speak, then so does he (fair point, imo). I would add that he has the same right to speak through an amplifier like the others, too.
At one point a man explains to the preacher that he was told he could speak through his amplifier in this other spot that he mentions.
All in all, it looks like TheBlaze was being misleading about the choke holds. The first picture is a frame from a section of video in which the preacher is being hugged in a manner the preacher considers “forceful” (I think is the word he used), and to which the preacher jokes that it was “a love hug” (we soon discover why it seemed forceful). So, definitely not a choke.
But also it looked to me, from all the videos I saw, that the preacher was, indeed, actively being prohibited from speaking – at least most of the time. His presence was unwanted, and many people seemed to voice that displeasure.
The preacher didn’t really say anything, though, and you could tell that, after some time, people weren’t really taking him seriously. So maybe, apart from not wanting to hear a preacher, they also didn’t want to hear someone being weird.
Looks like CHAZ disbanded.
The following message was posted to Twitter on June 24, 2020 from an account that claims to be the official accound of CHAZ / CHOP. The account is @CHOPOfficialSEA:
(Bold mine.)
“Dear Comrades in the struggle:
“Over the last two weeks we achieved what no one thought possible. We successfully built a self-governing community and convinced city leaders to enact meaningful police reform, including substantial budget cuts to the SPD.
“Last night, Solidarity Committee received notice from some of our trusted partners that persons in the park were in danger. We immediately implemented our emergency relocation plan, successfully evactuating most of the park. Thankfully, no danger materialized. However, we are now left with the reality that very few people remain in our beloved CHOP. This morning’s census finds fewer than two dozen clustered near the East Precinct. Eleven additional people are at the Space Needle. Last night’s BLM march had 71 participants, a number we expect to continue to drop. It is time we shift to the next phase of our organizing and move from direct action to virtual activism. We call on everyone to continue the struggle through Twitter, Facebook, Instagram, and Snapchat. We have held city officials accountable and can continue to do so in a way that is safe for everyone.
“The CHOP project is now concluded. While we expect a very small handful of holdouts may try to remain in the CHOP, no further organizing will be occurring to support this presence and the number on-site will be too small to be more than an annoyance for pedestrians rather than a zonal blockade. We have been briefed that full rehousing of SPD East Precinct staff into the station will occur no later than early next week and will be preceded by removal of barriers and the reopening of streets to traffic.
“Thank you to everyone for your support over the last two weeks and congratulations on your victories. You should feel proud! Let’s not let this momentum die. Please remember to continue supporting the kind of revolutionary change we just created by voting for Joe Biden as president of the United States in November and Jay Inslee as governor of Washington. And, despite our occasional differences, we believe Jenny Durkan has stepped up and shown the leadership that will help us heal. We urge you to vote to reelect her in 2021.
“In Solidarity!
“The Capitol Hill Occupied Protest Solidarity Committee”
HT to ZeroHedge:
Seattle CHOP Leaders Claim “Success”, Urge Protesters To Go Home, Continue “Struggle” Online
[www]https://www.zerohedge.com/political/seattle-chop-leaders-claim-success-urge-protesters-go-home-continue-struggle-online
So … a “self-governing community” with dwindling numbers? Yeah, right.
At 30:57 you describe the merchants chipping in some money to hire some protection from the bad guys. Maybe they would pick 7 protectors. Could even be a magnificent film in it!
Public schools – are they a smashing success? Yes they are in Finland! Consistently ranked among the top education systems. This is not a case that public schools cannot work, or will always be failing, but the in the US are like that.
We all know that is has been established that there would be no roads without public funding. Who would build them? (Joke). There is however an argument that externalities could not be properly accounted for. There is also a counter argument that this does not happen with public funding also. It is always going to be something of a trade off.
Defund the police seems to be a call for more social investment and less social control. Social investment sounds like (and probably is) socialist, so cannot be named in the US. However, this is a move towards socialist policies.
“There are tons of laws on the books that don’t get enforced.” Indeed, lying to the FBI for example (but only if you are friend of the Pres.). Apologies for bringing this up. I promise not to respond to any responses to avoid an off-topic storm.
Moving services to the private sector has happened a lot in the UK. Football matches are now supported mostly by stewards rather than police officers. Cash transports no longer have police guards and prisoner transport is generally hired out to private contractors. Road closures for events are done privately. Parking offences are largely privately enforced and police forces employ a lot more civilian workers for paperwork type activities. Some police services are funded by private sector – e.g. some fraud units covering insurance and vehicles. There is usually a bit of an outcry until people get used to it, then general acceptance that the police have better things to do takes over. Generally the police have a oversight role in all these – they will do it themselves when required. As with new housing developments, everyone is campaigning to stop the latest, but when it has been there a few years almost nobody cares that there is no longer a field where there are now houses.
On public opinion, I agree in part. Policing needs to be by consent if it is not to be oppressive. The reason we have a generally orderly society is not because the police have more guns. In the UK they generally do not have guns. It is because most people agree with the objectives of the police and most people do not commit crimes. They refrain from doing so not because they fear getting caught, but because humans are generally cooperative. They do not want to steal an old ladies’ purse because they are stronger. There are norms as well as rules and it is more by respect for norms than obeying rules that society peacefully gets by. There are always some non-cooperators, and for these we need some sort of enforcement. If the non-cooperators rise to too high a level, the enforcement becomes oppressive.
The idea of private police is not as absurd as I would have thought a few years ago, but I remain unconvinced that it would work as advertised.
“… and prisoner transport is generally hired out to private contractors.”
This is not an example of privatization, but of cronyism. The privately contracted transportation has to follow government guidelines and take them to a government-run prison, and the government pays the company out of funds coerced from the private sector.
“There is however an argument that externalities could not be properly accounted for.”
No, the “externalities” would automatically be accounted for by all parties in their voluntary acts of exchange.
For example, I may not like the guy sitting next to me, and I may not want to give him the pleasure of smelling the awesome bread I want to eat. I can either not eat, thereby depriving him of something he hasn’t paid for, but also hurt myself by depriving myself of the bread; or I can decide that the satisfaction I derive from eating the bread is worth more to me than depriving him of the smell.
Same with roads. The “free rider problem” is no problem at all. You either value having a road for your own benefit, knowing that others will benefit as well, or you value having other people not benefit from something they didn’t ask for, anyway. Your choice. Shoot yourself in the foot, if you want.
But there are plenty of incentives to build roads if you’re in a highly populated area. In John Stossel’s video “The Tragedy of the Commons”, he gives an example of parks that seem free to use because anyone can go there, but are actually paid for by the businesses surrounding the park – businesses who would tend to benefit from people hanging around in the general vicinity of their business. The same would be true for roads.
If you own a business park or a housing tract, you want people to be able to make it into and around the place that generates you an income.
(If you’re living out in the woods by yourself, then you’re generally the only one who wants a road, so you’re probably going to be forced to compete with nature for your walking or driving space. Don’t live away from civilization and commerce, next time.)
And if you’re a would-be consumer of roads, and there’s some place that you’d like to go, then whether there’s a road or not you’re going to find ways of getting there. If you leave the area because you can’t get to where you want, well that’s less potential revenue for the place you want to go, so that also gives an incentive to try and get paying customers to stay.
Er, I don’t think you know how externalities work.
In the absence of transaction costs, there would be no such thing. Perhaps that is what you are getting at. With transaction costs they do exist, and result in economically inefficient use of resources.
At the margin, you may be almost willing to bake the bread, but it is not quite worth it to you. You don’t get the bread and your neighbor does not get the smell. In principle your neighbor could pay you the tiny amount the smell is worth to him, and that gives you just enough reward to make baking the loaf worthwhile. You get the bread, he gets the smell and this is economically efficient.
If the cost of the transaction is worth more than the benefit to you or your neighbor, the transaction will not happen. You have the economically inefficient result of no bread and no smell.
Very often the transaction costs are very much higher than the potential gains, so the transaction do not happen and you end up with the economically inefficient use of resources.
This means that your assumption that externalities would be automatically accounted for is wrong.
On the roads, this does not mean that with only the market there would be no roads, but there would not be the economically efficient amount of roads. I believe this is undeniable. The counter argument I presented was that we don’t get the economically efficient amount of roads with Govt. funding either. This is also certain. Which system gives the closest fit to the economically efficient amount of roads is undetermined, and probably varies from place-to-place and time-to-time.
“Er, I don’t think you know how externalities work.”
I don’t think you know how *value* works.
“At the margin, you may be almost willing to bake the bread, but it is not quite worth it to you. You don’t get the bread and your neighbor does not get the smell.”
A decision that is economically efficient for both of them, as evidenced by their voluntary decisions to not bake the bread and not paying for the smell.
See, it is worth *more* to the baker to spend his time and resources doing something else than to eat the bread under the conditions that he doesn’t get his neighbor’s money (or a million gold coins, for that matter).
He has chosen his most valued end under the circumstances, voluntarily, which is to not bake the bread for less than X amound of monetary incentive.
His neighbor would rather save or spend his money for something other than a smell.
He has chosen *his* most valued end under the circumstances, voluntarily, which is to keep his money.
“… and that gives you just enough reward to make baking the loaf worthwhile. You get the bread, he gets the smell and this is economically efficient.”
An increase in the supply of a good does not, in and of itself, result in, or increase the potential for, an increase in economic efficiency. That’s not how value works.
Economics is about economizing to satisfy one’s highest ranked ends in any given set of circumstances. Therefore, economic efficiency is entirely subjective in nature.
It is precisely because the baker voluntarily chose to not bake the bread that we know that it was an economically efficient decision.
Economics is not, primarily, about numbers or even “output”. The following video will explain why, if / when you are so inclined (no presuure; who has the time?):
The Birth of the Austrian School | Joseph T. Salerno
[www]https://www.youtube.com/watch?v=dZRZKX5zAD4
OK, with the bread.
You value the loaf at $1
you value doing something else at $1.01
You don’t bake the loaf and you are better off for it individually by $0.01 by doing the something else. As an individual this is efficient. OK so far?
However, your neighbor pays $0.1 to smell the baking bread. Say he is indifferent at $0.11, but has a surplus of $0.01 at 10 cents. So he pays you 10c, is 1c better off.
You bake the bread and now have the bread worth $1 to you and 10c, so you are better off by 9c compared to doing the other thing, which you valued at $1.01.
The total benefit is 10c if you bake the bread with the transaction. I am sure you agree that in this instance there is benefit to both parties if the transaction were to take place and you baked the bread.
This is the economically efficient outcome.
We can make the same argument without giving numbers to the benefit, just on ranked preferences. Your neighbor prefers to pay 10c to get the smell. You prefer to get 10c and bake a loaf. Both get their higher preference compared to not baking the loaf.
Your neighbour does not know you are considering baking, nor that you would be persuaded to do so by 10c. To find this out would cost him $1. The transaction costs are higher than the benefit, so the transaction does not take place. You do the other thing, for value $1.01, you do not get your 10c and your neighbour dos not get his surplus.
When you say “He has chosen his most valued end under the circumstances, voluntarily, which is to not bake the bread for less than X amount of monetary incentive.
His neighbor would rather save or spend his money for something other than a smell.”
You are incorrect. They are both missing out by the bread not being baked. The neighbor would rather spend the money getting the smell, and the baker would rather get the loaf and the money, but that does not happen because of transaction costs.
Externalities are really trades that do not happen because transaction costs are too high.
Anticipating your response – you did say “under the circumstances” which includes transaction costs. I think this is hand-waving away what the individuals actually value. This makes economics a tautology – whatever happens is efficient, because, under the circumstances that it happened, it happened.
I am OK if you wish to use the term to mean this, as long as I understand what you mean by the term. That way we do not talk past each other.
(I realized too late that you do address some of my points in the first two sections, but my response is still useful.)
“OK, with the bread.
“You value the loaf at $1
you value doing something else at $1.01
“You don’t bake the loaf and you are better off for it individually by $0.01 by doing the something else.”
I don’t understand this scenario.
I value the loaf for the satisfaction I get from eating it. I don’t value the bread at any monetary value: I’m not going to buy the ingredients because I already have them. I’m not going to sell the bread because I intend to eat it.
So, I can’t value the bread at $1.00 or any other amount of money in this scenario.
As it turns out, I happen to value something else at the moment more than eating the bread.
That changes when my neighbor pays me enough so that what I can do with the money becomes worth more to me than the activity I’ll choose if I don’t bake the bread.
(Maybe my neighbor’s little bit of money makes another opportunity possible for me that wasn’t possible before, and I like that more than the non-baking activity [and also more than the leisure of not baking the bread].)
I’m not comparing my neighbor’s monetary contribution to my monetary value of baking the bread because I have no monetary value for baking the bread in this scenario.
My response should make more sense in my response to something else you said.
“The total benefit is 10c if you bake the bread with the transaction. I am sure you agree that in this instance there is benefit to both parties if the transaction were to take place and you baked the bread.
“This is the economically efficient outcome.”
You seem to think of economics solely in terms of numbers and monetary units. This is a problem.
That’s why I shared the video (I’ve shared it before in a different thread, too).
I don’t value the non-baking activity at $1.01 – I just value it more than eating the bread.
The money my neighbor might give me just allows me to do something with the money that I value more than the non-baking activity.
It’s what the money allows me to do, not the amount of money, as such, that is valuable to me.
You felt a need to assign a monetary value to the bread so that you could present a monetary calculation using my neighbor’s contribution and my value for the bread.
That’s how you came up with a number that suggested that there would be a necessary monetary profit if the transaction took place.
But there is no money value involved in the satisfaction of eating the bread.
Just for fun, watch this music video. It’s a rap battle between bankers and consultants. When they talk about “work / life balance” that’s along the lines of what I’m getting at. It’s possible for there to be an incredible amount of profit involved in working 100 hour weeks, but it is also possible for someone to value leisure more than a monetary profit above a certain amount:
Damn It Feels Good to be Banker — A Wall Street Musical
[www]https://www.youtube.com/watch?v=ROlDmux7Tk4
(Not a subtitute for the previously mentioned video.)
“Anticipating your response – you did say “under the circumstances” which includes transaction costs. I think this is hand-waving away what the individuals actually value. This makes economics a tautology – whatever happens is efficient, because, under the circumstances that it happened, it happened.”
I didn’t say “whatever happens”. I said that whatever is voluntarily chosen is economically efficient because that’s what it means to economize.
I have a highest preference for every choice I make. I never stop being in direct control of what my body does, and so every decision I make is necessarily one that I believe serves my highest ranked end, otherwise I would decide to do something that results in more value to me.
Regarding the concept of trades that do not happen because of transaction costs.
It is logically impossible for there to be zero cost to a transaction because costs are inherently part of deliberate human actions (which is why there will logically always be scarcity).
When you go about doing something, the fundamental reason you do so is to exchange your currently less-desired state of being for a more-desired state – that is, you seek to alieviate some felt uneasiness.
Your costs of your action are the opportunities you do not get to pursue because of your chosen action, including continuing to remain in your previous state. And monetary costs are simply one form that these “psychic costs” take.
So, transaction costs are a logically necessary part of human life.
Therefore, attempting to alleviate transaction costs using government coercion merely shifts transaction costs onto others in one form or another.
And shifting costs from one group to another is cronyism.
I have been thinking about this.
My interpretation is that the smell benefit is external to you. You will not bake the bread because you prefer not to without the transaction. The benefit your neighbor gets could be internalised by the transaction. My claim is that the state where the transaction occurs is more efficient. I think we agree on this as everything has been done by voluntary free exchange. This state would be Pareto efficient. The efficient number of loaves would be 1.
The welfare economic view (I think) is that the state where you bake the bread and your neighbour gets the smell is more efficient even if the transaction does not occur. This would be Kaldor-Hicks efficient. The efficient number of loaves is still 1. This I do not think you agree with. You say the efficient number of loaves is 0 when the transaction does not occur and the idea of Kaldor -Hicks efficiency is nonsensical.
This is a made up example, and we “know” things about it because we have defined it that way. We “know” that you both prefer the baked bread state because we have defined it so.
I think that your objection is based on the interpretation that it makes no sense to say that, without the transaction, the neighbor has gained more than you lose if you bake the bread, although we do in fact know in this case that you would have both been happy with the exchange.
An alternative reason would be that in the world we would have no way to determine what the efficient state would be without the exchange. We cannot know that your neighbor wants to compensate you if he does not actually do it. I do not think this is your position.
Is that about right?
“The welfare economic view (I think) is that the state where you bake the bread and your neighbour gets the smell is more efficient even if the transaction does not occur. This would be Kaldor-Hicks efficient. …”
“… This I do not think you agree with.”
Right.
“This is a made up example, and we “know” things about it because we have defined it that way. We “know” that you both prefer the baked bread state because we have defined it so.”
Right. I get that.
“I think that your objection is based on the interpretation that it makes no sense to say that, without the transaction, the neighbor has gained more than you lose if you bake the bread …”
“… We cannot know that your neighbor wants to compensate you if he does not actually do it. I do not think this is your position.”
This is not exactly my position, as you suspect. But it does sound very close.
I would qualify that it’s not the transaction, itself, that results in efficiency. A transaction cannot make the resulting allocation of those traded goods efficient.
Rather, what I’m saying is that the act of trading – or not trading – reveals a perception of efficiency in the minds of the two parties.
If presented with an opportunity for a trade, and the trade doesn’t happen, that is proof that at least one of the two parties did not consider the trade to be efficient.
It’s not the trade, but rather the party’s subjective ends that make any given trade efficient. You need the trade to know it, but the trade is not what makes it so.
So, because its the subjective ends that make a trade efficient, it could not be the case – unless by complete accident (say I wasn’t expecting a meteorite full of gold to drop into my back yard) – that efficient trades are possible without conforming to the preferences of the parties to a trade.
“If presented with an opportunity for a trade, and the trade doesn’t happen, that is proof that at least one of the two parties did not consider the trade to be efficient.”
My discussion is about when the opportunity is not presented. You do not know the other person wishes to trade. Does it make any sense to talk about if you would be better off with the trade? Or is every trade possible in principle, so if it does not happen, that is demonstration that it would not be mutually beneficial?
Something of a philosophical ramble follows. Just thinking aloud. At the core, I think this is an argument of holism vs reductionism.
I lean towards philosophical naturalism as a working hypothesis. Things happen because they are material. Consciousness arises from material brains. Economically, things happen because individual humans do things.
However, we cannot study everything at this level. So I am something of a methodological holist. Some things we can only study as a system.
Consciousness happens because of material things, but we cannot study it by studying atoms and chemicals. We investigate by studying the conscious being as a whole. There is some progress in the underlying materialist understanding, but we are nowhere near an explanation, if such a thing is even possible.
Economics is similar. Whilst it does arise from individual behavior, we cannot productively study it only at that level. We must look at the economy as a system.
In my view, the reductionist approach of examining only individuals is too reductive. Philosophically I agree, but methodologically we cannot get far with that approach.
“My discussion is about when the opportunity is not presented. You do not know the other person wishes to trade. …”
“… Or is every trade possible in principle, so if it does not happen, that is demonstration that it would not be mutually beneficial?”
It will never be the case that humans will simply decide to lay still and do absolutely nothing with their lives.
In other words, human desires are infinite.
For any given state, whether rich or poor, or even filthy stinking rich, humans cannot and should not stop doing things with their lives.
So, given that humans will not stop trying to better their lives (“better” however the individual interprets that), what that means is that each trade that a human wants to engage in, whether he knows it or not, is based on his current satisfaction with his current state of affairs.
The baker and the smeller may choose to trade with each other if they knew about the other, but they may want to trade with someone entirely different if they knew about someone else.
There’s no way to know that. It’s something subjective to the individuals.
By using government to shift costs onto someone else to bring knowledge of the potential trade to the baker and the seller, it could be that some other trade that is more desired is made unavailable.
As well, the costs you shift onto others make still other trades unavailable.
You’re not making “people” better off by making some trades more likely than others, but rather making some people better off at the expense of others.
“However, we cannot study everything at this level.”
True, but the tools we use to study systems must account for the parts. We can’t just take the system as a given – that’s sloppy.
“Economics is similar. Whilst it does arise from individual behavior, we cannot productively study it only at that level. We must look at the economy as a system.”
Presumably, you want the study of economics to benefit mankind.
But why? Is it because every single human has intrinsic value? (Stay with me. I’m not going where you think I’m going. Heh.).
If so, then doesn’t every individual have an interest in making his own life better for precisely the same reason – that he’s intrinsically valuable?
It seems that if the goal is to make humankind better off, that the person with the most knowledge of what “better off” means to each individual – himself – should be the one to make the decisions for that person.
That seems efficient to me.
“The baker and the smeller may choose to trade with each other if they knew about the other,”
Not just may, they would trade, becaue that is how it was set up.
That is what I was describing as the externality. The baker does not know of the potential benefit to someone else, so does not trade. Neither party gets the potential benefit.
I think I understand your position. You said above “No, the “externalities” would automatically be accounted for by all parties in their voluntary acts of exchange.”
I said I do not think you know how externalities wrok, but that is not it.
I think you do not believe the concept of externalities even makes sense in the way I mean by the term.
Because conceptually, or possibly practically (we did not quite resolve that one, but it doesn’t matter too much for now), discussing potential benefit to the smeller does not make sense in the absence of a trade.
Unless there is a demonstration of the improvement in states by action (in this case the trade), to talk of potential benefits either makes no conceptual sense, or there is no way to know about it, so it makes no practical sense.
Following this, things like cost/benefit analysis for policies do not make sense. I think you are OK with this because you do not think there should be any policies that require a cost benefit analysis, as they require a re-distribution and an interference with free choices of individuals.
My argument in the roads case (which started this dicussion) is that if you build a road, other people may benefit from it. That is an external benefit and in my model this beneffit shoud be taken into account to asess the amount of roads that is efficient.
You disagree, and your position is that the amount of roads that arise through free choice is by definition the efficient amount.
Have I expressed your position accurately?
Maybe campus police forces are a place to start? In UK, there is only one such -Cambridge. It is not very active in enforcement. “the university constabulary made no arrests between 2010–2015 and may not have made any in the previous 10 years either.”
So this is a concept I am not very familiar with. In the USA they do seem to be large private police forces. Their record is not too great at avoiding controversy.