Col, then I can only suggest you and these "plenty" of individuals with impeccable moral records go off and start your own country - you shouldn't need any government at all!

OTOH, you are absolutely right that a government that grows to excessive size is a breeding ground for corruption, laziness and any number of undesirable behaviours. To paraphrase Einstien, government should be as small as possible, but no smaller (a quick Google dashed my hope that I might be the first to come up with that phrase!)

You at least accept that goverment is needed to act as a 'referee'.
My argument is essentially that given a large, complex capitalist economy, quite a lot of refereeing is needed, because without it, individuals will pursue activities that they see as immediately beneficial to themselves, despite the fact that the net effect of everyone doing the same thing leaves everyone worse off - as epitomised in the "prisoner's dilemma" scenario.

On top of that, the fact is that government-provided services such as education, health-care and scientific research have worked extraordinarily well over the last century, and any belief that it could be done better by private enterprise alone is at best largely hypothetical, and at worst, in stark contrast to what real-life examples we do have.

As I wrote above (http://forum.onlineopinion.com.au/thread.asp?article=6395#94992), if the Government had not created factories and laboratories in which to conduct scientific research necessary to get our secondary industry up and running between the two world wars, and, instead, had left it largely to the private sector, this country would not have been capable of defeating a Japanese invasion in 1942 (see "Armed and Ready" (1995) by Andrew T Ross and "Can Australia ever be self-reliant for national defence? " at http://forum.onlineopinion.com.au/thread.asp?discussion=860)

BTW, just came across one of the best examples I've come across of a real-life "prisoner's dilemma" type scenario that was ultimately resolved by government intervention:

(from http://www.huppi.com/kangaroo/Prisonerdilemma.htm)

"Until a few decades ago, the tobacco industry was allowed to advertise cigarettes on TV. This was an enormously expensive cost of doing business, but competing firms had no choice; if they did not advertise, their rivals would, threatening to take over the market. It would have been in the best interest of all the tobacco companies to forge an industry-wide agreement to stop advertising. But no single firm wanted to risk it. Then along came the government, and banned TV cigarette ads for reasons of public health. Interestingly, this ban was strenuously opposed by the tobacco companies at the time. But their opposition proved to be misguided. After the ban took place, all the tobacco firms found that their profits improved. It was a classic example of individual benefit deriving not from self interest, but from group action."

Of course the irony in this case is that the point of the government intervention was to help reduce the amount of cigarettes sold, and the long term effect of it probably *has* been to reduce the profitability of cigarette manufactures - however, it has almost certainly increased the profitability of the economy as a whole, as far less productivity has been lost through smoking-related illnesses and deaths...not to mention excessive smoke-breaks.

Col, I'm genuinely curious...as a libertarian, what's your take on this? That individual liberty is more important than an optimal outcome? If so, doesn’t that assume enterprises are genuinely “free” to avoid wasting money on advertising…when in fact they are essentially bound to do so, just in order to stay in business?

Col,

Regarding your comment on government being a referee, I imply that when I say that governments should STEER the economic outcomes it wants. All I said in your quote of me was that governments should centrally BUILD infrastructure. (This could be by some partnership with the private sector or a national initiative like the Snowy Hydro Scheme, say; but I've got no real idea what model will work best these days.) However, I am aware that governments have proven to be pretty hopeless at running them in the past.

BTW, I pinched the following quote from another article on OLO.

"By adhering to dogmatic positions, puritans usually end up with 100 per cent of nothing. Yet puritans also cope well psychologically with such defeats, as their ideology becomes for them a grim gruel which sustains them in their solitude, consoling themselves that they remain forever lefter-than-thou, or greener-than-thou, or feminister-than-thou."

I must admit I thought of you when I read it. But I don't mind telling you because I know you will psychologically cope with it !!

I read with dismay "Latham: Beware the Polls and Swing Voter" of Saturday 17 November the second of two articles by Mark Latham concerning the current elections in the Australian Financial Review. In the article Latham finds surprisingly little fault with the Howard Government and dismisses the grass roots campaign against "Work Choices" a "scare campaign".

By thus having turned his back on those of us who desperately want to see the end of John Howard's misrule, he has shown himself to be little better than those within the ranks of the Labor Party whom he rightly exposed as having undermined his own bid to become Prime Minister in 2004, thereby prolonging Howard's reign.

I have written a response entitled "Mark Latham's political gift to John Howard" and had it puvlished on Margo Kingston's Webdiary on 20 November 2007 at http://webdiary.com.au/cms/?q=node/2195

Obviusly the high regard I expressed for Mark Latham in the article in not longer justified.

James Sinnamon (author)