Barack Obama has displayed an affinity for sports since he first came into the national spotlight. In particular, Mr. Obama seems quite enamored with basketball. I wonder if Mr. Obama thinks there is enough "competition" in the NBA at the moment. If he did not think there was, what would his solution be? If he viewed competition in the NBA like he does national healthcare, why Mr. Obama would simply form an "NBA team". No one would really know what or who this team was, only that it would be implicitly backed by the NBA. In other words, the NBA could shape the rules however it saw fit to benefit its "team".
Now what would this team's name be? How about "Public Option".
Who in their right mind actually thinks this would increase competition?
Showing posts with label Competition. Show all posts
Showing posts with label Competition. Show all posts
Federalism in Action
The Wall Street Journal reports New Hampshire's lack of an alcohol tax is spurring record sales and drawing the ire of neighboring northeastern states. The title of the article, "Tax-Free Liquor Lures Buyers, Stirring Crossborder Tensions", is a bit misleading in that no states seem to actually be irked by New Hampshire's fiscal policy. Massachusetts, the only state mentioned reacting to the lack of tax, seems to actually to accept it as reality and plans to move forward accordingly.
A few things to note. I find this to be a wonderful illustration of our democracy's greatest feature, federalism. Federalism is a preferable style for democratic rule for two reasons. One, it gives states the authority and flexibility to enact policies they feel would most benefit their residents. Consequently the country becomes a hotbed for experimental policy which ultimately results in failure and success. If there is failure, residents exit. If there is success, they flood in. One only needs to observe the Texas vs. California debate to begin to understand. In addition to experimentation (aka the application of freedom), the states disperse power over themselves and away from the federal government. In almost every case this is a good thing.
Another point I wish to address is that one may say this refutes my idea of international, or in this case interstate, competition. I do not believe this is true. New Hampshire's policy, as far as I can tell, was never reactionary. It was simply what legislators determined was the best policy for the state. Now it is possible, theoretically, State A could identify a policy weakness of State B, and thus adjust their policy to capitalize on the failures of State B's policy. In a certain sense, I could see this interpretation of applied federalism to be somewhat similar to the traditional definition of competition. It is an idea worth further studying.
A few things to note. I find this to be a wonderful illustration of our democracy's greatest feature, federalism. Federalism is a preferable style for democratic rule for two reasons. One, it gives states the authority and flexibility to enact policies they feel would most benefit their residents. Consequently the country becomes a hotbed for experimental policy which ultimately results in failure and success. If there is failure, residents exit. If there is success, they flood in. One only needs to observe the Texas vs. California debate to begin to understand. In addition to experimentation (aka the application of freedom), the states disperse power over themselves and away from the federal government. In almost every case this is a good thing.
Another point I wish to address is that one may say this refutes my idea of international, or in this case interstate, competition. I do not believe this is true. New Hampshire's policy, as far as I can tell, was never reactionary. It was simply what legislators determined was the best policy for the state. Now it is possible, theoretically, State A could identify a policy weakness of State B, and thus adjust their policy to capitalize on the failures of State B's policy. In a certain sense, I could see this interpretation of applied federalism to be somewhat similar to the traditional definition of competition. It is an idea worth further studying.
Do Countries Compete? II
A note on this topic. I approached it from a modern-day perspective, aka post-WWII. I suggested Nazi Germany's domestic and foreign policies were some of the most recent manifestations of country competition. I don't think this is a perfect example, but I think it illustrates the point effectively. What illustrates the point even better though, and what I should have mentioned earlier, is mercantilism.
Merriam-Webster defines mercantilism as "an economic system developing during the decay of feudalism to unify and increase the power and especially the monetary wealth of a nation by a strict governmental regulation of the entire national economy usually through policies designed to secure an accumulation of bullion, a favorable balance of trade, the development of agriculture and manufactures, and the establishment of foreign trading monopolies." Mercantilists viewed wealth as a zero-sum game. In other words, if an English ship stole 100 pounds worth of gold from a Spanish ship, the English would be considered better off than the Spanish by whatever monetary amount 100 pounds worth of gold was valued at.
Smith, Ricardo and other enlightened thinkers dismantled such thinking in the 18th and early 19th centuries.
Merriam-Webster defines mercantilism as "an economic system developing during the decay of feudalism to unify and increase the power and especially the monetary wealth of a nation by a strict governmental regulation of the entire national economy usually through policies designed to secure an accumulation of bullion, a favorable balance of trade, the development of agriculture and manufactures, and the establishment of foreign trading monopolies." Mercantilists viewed wealth as a zero-sum game. In other words, if an English ship stole 100 pounds worth of gold from a Spanish ship, the English would be considered better off than the Spanish by whatever monetary amount 100 pounds worth of gold was valued at.
Smith, Ricardo and other enlightened thinkers dismantled such thinking in the 18th and early 19th centuries.
Choice and Competition
I am watching Meet the Press at the moment and David Gregory is interviewing David Axelrod on healthcare. I've heard Axelrod invoke the ideals of choice and competition and that implementing a public choice option is essential to ensuring the optimal amount of competition and providing the American people with the most options. Merriam-Webster defines "competition" as "the act or process of competing as a : the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms b : active demand by two or more organisms or kinds of organisms for some environmental resource in short supply".
A few things to note. First, I am becoming more and more convinced that the interpretation (or misinterpretation) of language is the root cause of many conflicts in the world. Gay marriage strikes me as a great example of an issue that suffers from this language disparity. Ala, how does one define "marriage"? Where does that definition come from? What makes it legitimate? Has it evolved at over time? How does culture change the definition? Naturally, many answers can be given to these questions. Consequently, people will fundamentally disagree on the premise, and it will thus be impossible to move forward.
Axelrod makes the claim that competition is enhanced if the government enters the fray. Given the above definition, I have enormous difficulty in seeing how this is possible. The state is not a desirable producer. There are two distinct reasons for this. The first is the state has the unique power to shape the rules of the game, aka regulations. Consequently, would be like having two teams participate in a basketball game, but the ref is employed by one of the teams. He will clearly be biased and enforce the rules in favor of his team.
Secondly, the role of power and the government's ability to use coercion, has direct effects on the incentives of the state as a producer. When you can collect billions of dollars in taxes, borrow billions of dollars for low interest, or print money at any rate you wish, and the public MUST fall in step with such policy implementions, the government gains an advantage over private companies that can ONLY end in monopoly. Look at public education. No one would suggest that public education in this country is at a desirable level given the cost. Yet what is public education? Quite simply, it is a public option. If a public option or something like it is implemented, we will see the same inefficiency, malaise and perverted incentives that make public education what it is infect the healthcare industry. The cost will be overwhelming.
A few things to note. First, I am becoming more and more convinced that the interpretation (or misinterpretation) of language is the root cause of many conflicts in the world. Gay marriage strikes me as a great example of an issue that suffers from this language disparity. Ala, how does one define "marriage"? Where does that definition come from? What makes it legitimate? Has it evolved at over time? How does culture change the definition? Naturally, many answers can be given to these questions. Consequently, people will fundamentally disagree on the premise, and it will thus be impossible to move forward.
Axelrod makes the claim that competition is enhanced if the government enters the fray. Given the above definition, I have enormous difficulty in seeing how this is possible. The state is not a desirable producer. There are two distinct reasons for this. The first is the state has the unique power to shape the rules of the game, aka regulations. Consequently, would be like having two teams participate in a basketball game, but the ref is employed by one of the teams. He will clearly be biased and enforce the rules in favor of his team.
Secondly, the role of power and the government's ability to use coercion, has direct effects on the incentives of the state as a producer. When you can collect billions of dollars in taxes, borrow billions of dollars for low interest, or print money at any rate you wish, and the public MUST fall in step with such policy implementions, the government gains an advantage over private companies that can ONLY end in monopoly. Look at public education. No one would suggest that public education in this country is at a desirable level given the cost. Yet what is public education? Quite simply, it is a public option. If a public option or something like it is implemented, we will see the same inefficiency, malaise and perverted incentives that make public education what it is infect the healthcare industry. The cost will be overwhelming.
Do Countries Compete?
I wrestled with this question last night as I struggled to fall asleep. During the winter semester my senior year, in an International Business Seminar course, I had said, no, they do not. A fellow student promptly countered my assertion and claimed of course they do. I do not remember too much of what he said, but what from what I do recall it was mostly that countries' compete for foreign investment. I never came up with a proper response (on the spot) to his argument and it has bothered me ever since.
I think the problem lies not in either of our arguments but more fundamentally, how the question is posed. In other words, is competition even a relevant concept to international relations? Or can the word be tinkered from the traditional, market sense to a more cooperative meaning? I'm not positive, but as of now I'm leaning toward the former.
I believe this because the stated goals and disposable tools to accomplish those goals are distinctly different for a nation than they are for a private enterprise. For instance if Dell is selling less laptops than Apple or selling them at a lesser margin, Dell can alter their business model by slashing price, cutting costs, hiring better workers, etc...
For a country, there are two issues fundamentally different from the above. One, a nation does not have the ability to do such things to such an efficient degree as a private company can. This is an issue in and of itself, but for now I will simply accept it as true to examine the more important premise.
A country, ideally, should not base its policies around what other countries are doing. The state should, again ideally, do everything in its power to provide its citizens with the clearest and simplest avenue to achieving their own means and building their own wealth, whatever course of action other countries are taking. In other words, nations should step back to let companies compete. Competition, ultimately, should not be in the vocabulary of government when it comes to international relations. If two countries do decide to effectively "compete", each nation's respective government must seize control of the nation to direct as they see fit to defeat their competitor. This quite obviously would lead down the road to war and totalitarianism.
Looking back, Hitler's Germany seems to be the most blatant case of one country explicitly attempting to compete with other countries.
I think the problem lies not in either of our arguments but more fundamentally, how the question is posed. In other words, is competition even a relevant concept to international relations? Or can the word be tinkered from the traditional, market sense to a more cooperative meaning? I'm not positive, but as of now I'm leaning toward the former.
I believe this because the stated goals and disposable tools to accomplish those goals are distinctly different for a nation than they are for a private enterprise. For instance if Dell is selling less laptops than Apple or selling them at a lesser margin, Dell can alter their business model by slashing price, cutting costs, hiring better workers, etc...
For a country, there are two issues fundamentally different from the above. One, a nation does not have the ability to do such things to such an efficient degree as a private company can. This is an issue in and of itself, but for now I will simply accept it as true to examine the more important premise.
A country, ideally, should not base its policies around what other countries are doing. The state should, again ideally, do everything in its power to provide its citizens with the clearest and simplest avenue to achieving their own means and building their own wealth, whatever course of action other countries are taking. In other words, nations should step back to let companies compete. Competition, ultimately, should not be in the vocabulary of government when it comes to international relations. If two countries do decide to effectively "compete", each nation's respective government must seize control of the nation to direct as they see fit to defeat their competitor. This quite obviously would lead down the road to war and totalitarianism.
Looking back, Hitler's Germany seems to be the most blatant case of one country explicitly attempting to compete with other countries.
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