|
If Richard hasn't specifically outlined his reasoning for believing the market will under-provide defence in these posts, he certainly has elsewhere. Defence is a public good. That means it gives positive externalities. That means (cet par) the public benefit of contributing does not equal the sum of the many private benefits of contributing. Ergo, underprovision. It is a sound theory as far as it goes. The problem with Richard's argument is not that it is non-existent or circular... it is that it is incomplete. He ignores (or gives insufficient attention to) government failure, he ignores dynamic issues, he conveniently ignores the possibility that people sometimes make the wrong decisions (ie underprovision of defence may be optimal), he ignores the posibility non-coercive and non-financial incentives, he assumes a high externality based on theory (without evidence), and then he insists that we play his game of static neo-classical optimisation. There are just so many ways the government can make the world worse. Unless some bright spark can show quite cleary how their fandangled scheme is the 1/1000 that works... then the null hypothesis should always be to let people be free.
| 
