Sunday, April 10, 2011

Public v. Privatized Services

The meat of Hayek's application of the rule of law, jurisprudence, and equity under the law seem to emerge in Chapter 15, as Hayek explains further which kinds of service are permissible for the government to provide, and under which conditions.

It is understandable the government should officiate services that are providing goods and services that on a larger scale than that of industry, such as mining statistical data and providing corrective measures in a monetary system.

Since the 1930's we've avoided another great depression and experienced periods of inflation, stagflation, and deflation, but never again a national economic meltdown. This is due to periods of balancing measures facilitated by forms of government coercion such a the federal reserve. But these scales of balanced coercion are becoming over-weighted, and the balancing act has become, completely out of range of what Hayek would describe as the government's general rule of law in the fiscal budget. The result has evolved into a disastrously large debt, not simply an imbalanced trade, but an imbalanced current account through increased spending. The government has attempted to aide more and more of privatized services, exercising its coercive powers through new laws and bills for education and health care, not to mention overseas military operations. As Camilla once pointed out: "We're talking about the government as if it is a person." A superhero...with fewer and fewer onlookers as time & resources pass into the black oblivion.

The government's providing of ever closer estimates of population statistics has made information more freely available under the Freedom of Information Act, and our constitutional rights to see the economic reports they produce and it provides industry with an upper advantage, as technology has made this more readily available.

I want to be so bold as to state the monopolistic markets have never diminished because counter-veiling duties have provided comparative advantages in some instances and inflation in other nations has provided competitive advantage in the U.S.. This is an example of privatized coercion that has been generally beneficial.

I have little conclusions to draw from Hayek's premise, since I am not a liberal by his definition, as I believe in the checks and balances of a constitutional republic, not a purely democratic government. If there are to be general rules of law, then their must be general systems that must remain relatively unchanged over time, and the privatized sphere he is discussing should be the one that changes more often. Our constitution is a solid example of this, it has remained relatively unchanged, and represents a good general rule of law. And the portion of the free sphere that information & technology industry consists of is a good example of a dynamic largely privatized benefit to the industry as a whole . Should the government coercively attempt to alter either of these outside of its general rule of law, our basic freedoms & economic freedom would be in danger.

Writer's block has really hit me this week, so please let me know your thoughts.

Peace out scholars!


  1. The federal reserve is a tool to exercise blind coercion on the people. We have come close to financial meltdown because of state currency control. The federal reserve is the greatest example of coercion in this country and I don't that was included in Hayek's acceptable levels of state involvement.

  2. I would have to agree with you that it is indeed a tool to exercise blind coercion, one that has proved to be helpful in the past, but is a form of coercion that was not agreed upon by the American people, since its origins and progression began as an executive & congressional mandate enacted in 1913, which was widely opposed by fiscal conservatives who wanted a privatized banking system of national banks, and NO centralized banks, best of all an executive controlled central bank. So, I also agree that Hayek would say that this is far out of the general rule of law that is an unacceptable level of state involvement. Perhaps if the voting in of the federal reserve's chairmen and the fiscal policies it employs were not left to exclusively congress and the executive branch, we would have a more fair justification for its activities. I would suggest that its members be voted in by the House, Senate & the President we would have a better outcome.