What should be private?

foldvary.net/works/private.ppt

Fred FoldvaryDept. of Economics

Santa Clara University, California

The meaning of “private”

• Two sectors of the economy:• Governmental and private.• Private: not governmental,• Pure free market: voluntary for all• Includes private communities: land

trusts, homeowners’ associations, hotels, shopping centers.

Imposed vs. voluntarygovernance

• Voluntary club: do whatever the members want.

• Imposed government can be a tyrant.

• For justice, need to limit the government sector.

• The remainder is private

Some things we only want one of

• What should be a governmental monopoly:

• Army

• Highest court

• Chief

• Legislature (can have two houses)

Everything else can be private

• Money and banking

• Education

• Streets

• Voluntary, contractual governance with civic associations.

• No subsidies other than to the poor who do not receive charity.

Henry George: true free trade

• Implies private property in produced goods and services.

• Natural monopolies owned by the communities.

• Central planning fails.

• The pure free market is efficient.

• For equity: equal shares of natural rent.

A purely private world

• Local contractual communities.• Elect higher level associations.• All governance is voluntary for those

who are peaceful and honest.• Rent is collected from the

communities.• Most join to get a package of goods.

Two systems

• Geo-anarchism: all is private. Equal shares of rent are distributed to individuals.

• Geo-statism. The state collects the rent;

• Either for public goods or dividends.

• Commanding heights are governmental.

• All else is best private, free-market.