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> On a systemic level, what advantages does government provide to solving these various problems that private individuals couldn't?

Private action in a free market suffers from numerous issues: free rider problems, collective action problems, problems involving positive and negative externalities, problems involving information asymmetries, etc. These are well-developed areas of economics that libertarian-minded policy folks tend to ignore, but which simply cannot be ignored. Most government programs, from environmental protection (negative externalities) to Social Security (irrational hyperbolic discounting), are rooted in one of these economic phenomena.

> VC money more often comes from highly successful past ventures, not grandma's retirement savings plan (which are terrible investments anyway)

See the sibling comment about private equity fundraising after changes in ERISA. Some VC money does come from people taking money from past ventures and putting them into new ones. But the bread and butter of VC involves raising money from limited partners, specifically pension funds, mutual funds, etc. The other major sources tend to be endowments, banks, insurance companies, and sovereign wealth funds.

See: http://fisher.osu.edu/supplements/10/12707/LPReturnsJanuary2... (p. 1).

Getting the government to do the right things and do them well is itself a public goods problem, and one that as far as I know is as-yet unsolved. All of those "numerous issues" apply to public provision of goods at least as well as they apply to private provision. Your list of objections to private action ("free rider problems, collective action problems, problems involving positive and negative externalities, problems involving information asymmetries") would only constitute evidence supporting government action IF we had access to bureaucrat-gods - government workers who have perfect information, are perfectly benevolent, are motivated to do the right thing, never do anything that produces unanticipated negative consequences.

Since bureaucrat-gods don't exist, you need to at least argue that the problems of externalities and such will be lessened by public action. But I don't believe that argument has been made - it's usually just assumed away.

You know whenever I see spats like this I feel compelled to point that governments cause such profound economic distortion that we really can't speak of what a 'free' society would be actually be like - it's so far removed from anything humanity has known in a very long time.

We're all (more or less) coders here, right? What happens when we tinker with a big, complex, undocumented system that nobody really understands? Government as a concept isn't so much tinkering as it is a blindfolded child refactoring by typing with his elbows.

The economy is itself a distortion caused by government. In the state of nature there are no economies because as soon as you accumulate a little capital someone clubs you on the head and takes it away. This is why most libertarians are of the statist variety. They talk about the economic distortion caused by government, but what they mean is the distortion caused by the parts of government they don't like (I.e. besides the police, courts, etc). This is a perfectly fine position, but is susceptible to the economic arguments I listed.

As an economist I assure you that if I noted a correlation between head clubbing and capital accumulation I would take offensive and defensive steps to protect my head. In fact most would, leading to a nice little equilibrium where head clubbing is not a worthwhile strategy. They may even form a protection racket, and call it "Police".

Economics is not the study of capital, it's the study of trade - which incidentally is so natural we even observe it in the animal kingdom.

Few libertarians would deny the need for at least occasional collaboration, but that is not the same as government. Governments are universally wasteful of resources, susceptible to corruption, resistant to changing needs, and have a nasty habit of claiming absolute moral authority on things...which in turn has a nasty tendency to start wars. It is, objectively, a limiting and archaic system that does us all a great deal of damage.

> As an economist I assure you that if I noted a correlation between head clubbing and capital accumulation I would take offensive and defensive steps to protect my head.

With what? You're an economist, not an MMA fighter.

> In fact most would, leading to a nice little equilibrium where head clubbing is not a worthwhile strategy. They may even form a protection racket, and call it "Police".

Right, so the nerds get together and beat down the MMA fighters and create laws against "murder" and "theft" and pretty soon you've got government. We're living in your nice little equilibrium.

> With what? You're an economist, not an MMA fighter.

A) you don't know that, B) everyone else would be an MMA fighter?

> Right, so the nerds get together and beat down the MMA fighters and create laws against "murder" and "theft"...

Premise construction

> ...and pretty soon you've got government.

Magic

> We're living in your nice little equilibrium.

Conclusion

I can't even accuse you basing your argument on a logical fallacy, because there isn't an argument present.

The beauty of this protection racket equilibrium is that everyone gets exactly the amount of protection they can afford. This leads to rapid and efficient re-allocation of resources (via the mafia/police) when inefficient organizations cannot meet their obligations.

> free rider problems, collective action problems, problems involving positive and negative externalities, problems involving information asymmetries, etc.

The usual statist objections to pure market action are total myths, not to mention weak and tangential objections. I'd love to argue the market with a hardline Marxist because at least they take a true thrust at market action rather than just nibbling.

>free rider, externalities

How is it a problem to anyone that a persons actions benefit others without deriving some monetary value for the benefit? No one is coerced, no rights violated. This is the only standard for judging these matters. No person should be forced to pay for a benefit for a transaction they did not agree to. Collective defense, for example, does not suffer because some people don't pay to play --- forcing equal patronage only serves to undermine the entire relationship between buyer and seller. More: http://mises.org/daily/2769

>collective action

Kickstarter.

>Information assymetries

Information is a value that is open on the market, as all values are. Not sure if the product your buying is safe? Buy insurance for it. Or, take the time to do your research and make comparisons. That time spent has a value. Decide which you are willing to give up: that time, or the cost of the insurance. Value is a dynamic and multifaceted concept. http://mises.org/daily/1135

> The usual statist objections to pure market action are total myths

The usual libertarian objections to modern economics are usually wishful thinking.

Much of modern economics directly inspires libertarian objections to state action. (Krugman and his acolytes notwithstanding.) I tend to think of libertarians as "liberals who learned economics".

There's nothing more wishful than hoping the watchers do their jobs, without watchers themselves. Ad infinitum.

> Silicon Valley does not need DC, it is hindered by DC

Then why doesn't Silicon Valley exist in some place without an effective government?

They are trying... https://blueseed.co/

"A startup is trying to sell idea X" and "Silicon Valley is trying X" are not equivalent.

And even Blueseed has, as part of its pitch: Silicon Valley is the best place in the world to scale a company, and once you’re large enough there are legal channels available to move into Silicon Valley proper. We will provide you with the resources and contacts you need to make the transition. [1]

https://blueseed.co/quick-facts/

Perhaps not, but it does get a point across that I don't imagine anyone had trouble interpreting.

Minutiae aside (it was a short post for a reason), the fact this idea is not considered crazy and has a bit of traction is extremely relevant to the discussion as a whole.

> the fact this idea is not considered crazy and has a bit of traction is extremely relevant to the discussion as a whole.

Does it? As I see, the idea is choosing a location to take maximum advantage of the benefits of Silicon Valley including those provided by government while avoiding particular restrictions, particularly related to immigration, related to government.

Insofar as hacking government -- which this is -- being considered a potentially-viable startup proposition is relevant to the discussion, its relevant as evidence that government has utility to Silicon Valley even though it poses constraints, not evidence that Silicon Valley doesn't need government.

(And, while I think that it is a fact that the idea "has some traction", I'm less convinced that it is a fact that it is "not considered crazy". An idea can be considered crazy and have some traction.)

Defending government by pointing out things they provide is fundamentally flawed - of course we all get utility from public goods, it's unavoidable.

The argument is not that the government doesn't provide utility, it's about recognising the possibility that there may be other, better ways to deliver the same or better. Ways that do not, for example, divide societies by political leaning; lead to absurdities like irrevocable entrenchment of power in one guy in a big white house; give rise to further insanity such as giving the power to write anti-corruption laws to those most at risk of being corrupted.

This is the best way to build roads? Really? This is the best way to do anything??

> The argument is not that the government doesn't provide utility, it's about recognising the possibility that there may be other, better ways to deliver the same or better.

You are free to make that argument, but asserting the conclusion and asking leading questions isn't an argument.

FWIW, we've already, extensively tried the idea of not having a State with a monopoly on force and instead managing the world through private property rights and contractual relationships without the State imposing limits on such relationships to address power imbalances, etc., it's called feudalism.

At no point in this thread - or anywhere else for that matter - have I advocated anarchy, feudalism, feudal anarchism, or anything of the sort. Centralisation is inevitable to an extent. However to say that our options are binary - the status quo vs feudalism - is absurd. There exists a whole set of improvements and new solutions. Parliamentary democracy is intrinsically flawed for many reasons, and I have given some, but fundamentally it's a machine whose original raison d'etre was to be a solution to an information problem. The views, concerns, and opinions of the uneducated, illiterate population were to be distilled into a smaller, more manageable, representative subset who held the power to affect change as per popular will.

One thing we - especially us on HN - have excelled at these past decades is the manipulation of information. This system was designed when paper was a luxury and literacy a specialist skill; we solved democratic decision-making the day we cracked UIDs and radio buttons.

Governance is like software: it takes information (capital, data, views, problem definitions, etc) in, transforms it, and spits information out (capital allocations, laws, etc) out. Tasked with rewriting the current, proprietary, overly ceremonious, deeply coupled, trillion line leviathan that only runs on a single ancient hardware architecture and has a man page that is not only out of date but is purposely deceptive...would we declare it perfect and go home? Would we dare be so arrogant as to keep it closed source and prescribe our opinions on the world?

Or would we open source it, and see what amazing shit starts to happen?

> The democratic, lobby-based, "law-for-sale" system is systemically disadvantaged to the classic survival of the adaptable.

Odd, I was reading a history book the other day and took note of this passage:

"The other wrong lesson [the philosopher William James] thought people took from On the Origin of Species is, in effect, the flip side of the first. It is the belief that evolutionary science can lay a foundation for norms–that natural selection serves as a kind of "bottom-line" arbiter of merit. This is the doctrine of "the survival of the fittest," .... It makes the logic of evolution the logic of human values: it suggests that we should pursue policies and honor behavior that are consistent with the survival of characteristics understood to be "adaptive," and it justifies, as "natural," certain kinds of coercion."