A few minor grumbles: there’s no such thing as “The Police” in America, because police departments are very much decentralized, and that’s by design in order to allow some capability for people to vote with their feet and leave a bad area. Comparing American police to other countries is meaningless, especially where in most other countries their police are also at least somewhat decentralized.
For example, Australia mostly operates on state and territory police, with some (slightly unconstitutional) federal police doing a small number of jobs that genuinely require international cooperation.
Separate issue: regarding the “Babysitting Co-Op” the problem was that their “currency” was based on the belief that all hours are of equal value, while with known seasonal variation there was a high season where babysitting was in high demand and a low season where demand was low … that’s why prices were unable to adjust. You would get the same outcome using something like ice-cream coupons as “currency” and discovering that more people want ice-cream in Summer.
Strictly speaking the US Federal Reserve is a private monetary system, with the special case they have been granted a patent monopoly by the sovereign. These type of monopoly grants were quite normal under Feudalism, but they tend to be frowned upon as noncompetitive these days, even though there are still plenty of examples out there (the legal industry, the medical industry, etc, etc).
The normal economic assumption is that if you grant one particular private supplier a monopoly on some aspect of the economy, then this supplier will deliberately withhold goods in order to drive up prices and maximize their profit margin. There’s a curve based on marginal costs and you can work out the theoretical optimal peak of a monopoly supplier, it’s part of the Theory of the Firm. We could argue about what exactly it is that the Federal Reserve is a supplier of, but suppose that they are a money printer, their monopoly position should (based on standard theory) give them incentive leaning towards tight money.
Another separate issue: at the end, the part about workers being paid based on marginal product, as opposed to being paid based on total product is something that gets messed up and confused so many times over … it’s become something that gets my blood up. The world is non-linear, and diminishing returns are normal so it is completely expected that for any worker the overall total product would be significantly larger than the marginal product which is only calculated on the last hour (or the first derivative in mathematical terms). IMHO it’s quite important for free market people to explain this clearly, else you get straw-manned quite easily and Krugman is quite cunning at times.
A few minor grumbles: there’s no such thing as “The Police” in America, because police departments are very much decentralized, and that’s by design in order to allow some capability for people to vote with their feet and leave a bad area. Comparing American police to other countries is meaningless, especially where in most other countries their police are also at least somewhat decentralized.
For example, Australia mostly operates on state and territory police, with some (slightly unconstitutional) federal police doing a small number of jobs that genuinely require international cooperation.
Separate issue: regarding the “Babysitting Co-Op” the problem was that their “currency” was based on the belief that all hours are of equal value, while with known seasonal variation there was a high season where babysitting was in high demand and a low season where demand was low … that’s why prices were unable to adjust. You would get the same outcome using something like ice-cream coupons as “currency” and discovering that more people want ice-cream in Summer.
Strictly speaking the US Federal Reserve is a private monetary system, with the special case they have been granted a patent monopoly by the sovereign. These type of monopoly grants were quite normal under Feudalism, but they tend to be frowned upon as noncompetitive these days, even though there are still plenty of examples out there (the legal industry, the medical industry, etc, etc).
The normal economic assumption is that if you grant one particular private supplier a monopoly on some aspect of the economy, then this supplier will deliberately withhold goods in order to drive up prices and maximize their profit margin. There’s a curve based on marginal costs and you can work out the theoretical optimal peak of a monopoly supplier, it’s part of the Theory of the Firm. We could argue about what exactly it is that the Federal Reserve is a supplier of, but suppose that they are a money printer, their monopoly position should (based on standard theory) give them incentive leaning towards tight money.
Another separate issue: at the end, the part about workers being paid based on marginal product, as opposed to being paid based on total product is something that gets messed up and confused so many times over … it’s become something that gets my blood up. The world is non-linear, and diminishing returns are normal so it is completely expected that for any worker the overall total product would be significantly larger than the marginal product which is only calculated on the last hour (or the first derivative in mathematical terms). IMHO it’s quite important for free market people to explain this clearly, else you get straw-manned quite easily and Krugman is quite cunning at times.