Monday, July 31, 2006

Accountability : What's it good for ?

I've talked a lot about accountability lately - how profit is its signal, and we can only have it in a market anarchy. Let me now close on the topic. What does accountability bring to a society ? How does it make our lives better ?

Suppose that the government passes a law saying that only one company - say, Pepsi - will be allowed to produce and sell colas. This would devastate the market of colas. Where there was a flourishing of competition, there will now be uniformity, and prices will necessarily be higher. No competition within the market means that the monopoly's competition only comes from other markets - bottled water, juice, etc. People will not suffer great price difference between competitors, but they will suffer higher prices if it means they can still get some cola, as opposed to a completely different alternative they don't desire.

Furthermore, this lack of incentives to provide a good product applies across the board. The monopoly is not likely to be concerned by quality or taste as much as it would if it had competitors that people could switch to. In all cases, the quality of cola will be lowered.

The effect of a monopoly in general, therefore, is to reduce the incentives to quality and service, and therefore to make a market worse for the consumer.

However, in this first example there is still a strong incentive insofar as people can just give up drinking colas, and drink other, perhaps similar, beverages. Two possibilities exist here : either the monopoly will expand its power to cover those beverages also, or it will have to compete with them.

Let's take another example, power, which industries and homes heavily rely on - be it electricity, propane, oil or natural gas. It is an essential service. If we nationalize power, what will happen ? Power generation will tend to be less efficient, and prices will tend to be higher. But in this case, the lack of incentives is much worse because there is no alternative. Consumers are, for all intents and purposes, prisoners of this monopoly.

What we can expect from such a scenario depends on who controls the monopoly. We can expect plutocratic interests to have a say in how power is generated and sold. We can expect a lot of laws and regulations preventing efficient use of the resource. We can expect colossal inefficiency. We can expect that in all cases the average consumer will be the big loser (by paying double, or more, what he would have paid in a free market - as well as being regulated to death).

What if we establish a monopoly in the most essential markets of all - order and protection from violence ? Well, if we judge from what democratic governments have brought us in the past century, here's what we can expect :

* Constantly growing sums of money extorted from the population in order to finance the expansion of the ruling class.
* A destruction of value in the whole society through inflationary policies.
* Global warfare and social warfare.
* The spectacular growth of a whole category of violent organizations in society (mafias).
* One of the most ridiculous and unjust justice systems ever invented by man.

In short, such monopolies become the greatest threats to order and protection from violence.

So what does accountability give us ? Accountability makes us all peaceful neighbours, because our well-being depends on how much other people trust us. Accountability ensures that inefficient and morally wrong ways of doing things are wiped out instead of being sustained by force. Accountability makes for an evolving, self-correcting society.

Lack of accountability, on the other hand, gives us nothing but chaos and injustice. Lack of accountability ensures that people will see each other as saps to be exploited. Lack of accountability ensures the collapse of society.

Do I want a monopoly of order, or people who are accountable for the order they provide to society ? To be a statist and answer the former is insane. The question shouldn't even need to be asked. It is, by now I hope, a foregone conclusion that market anarchy is the only moral political system that has ever existed.

1 comment:

ryan e said...

Brilliant! My favorite part:

"It is, by now I hope, a foregone conclusion that market anarchy is the only moral political system that has ever existed."

Semi-related is another post from "God is for suckers" I found amusing:

Sean- "That means we don’t just lie down and take it when a corproration poisons our entire drinking supply. And why government sometimes needs to stand with us. And that means we get to stand up and tell our government when it is fighting an illegal war for profit."

Sean believes that his and my own government started an illegal war for profit, and that we need to stand up and *hold them accountable!*

Well, the liberals unsuccessfully never impeached George Bush, never convinced enough people that he cheated in 2000, never actually voted yes on immediate withdrawl of Iraq, never secularized the "country", and never stopped any of the illegal actions by the Bush administration, YET he feels as if governments can be held accountable.

That is liberal accountability in action; bitching and complaining for eight years till they can elect their own puppet!