What do you say about the idea that the costs of ensuring security and protecting property rights are higher for private companies than for the state, and that the state, by virtue of its exceptional efficiency in applying force and maintaining order, can better provide the protection and guardianship of law and order, as well as courts, than private companies, and therefore it is necessary in this regard?
анонимный вопрос
How can the state’s costs for protecting property rights be lower than those of a private company? Only through games with budget line items. Yes, for a police officer, it is enough to hang a sign saying “forbidden, fine is so-and-so” and carry out a couple of exemplary fines—whereas a private entity would have to constantly hover and be vigilant to ensure the prohibition is not violated. But this does not mean the police officer is mega-efficient. It means that he himself might receive pennies, or even feed entirely on bribes, while the state must bear the primary costs of ensuring that people are afraid to contradict this police officer. And the costs of maintaining this fear are spread across a heap of budget items, from education to the maintenance of prisons.
A private entity, on the other hand, often has to compete with the state under completely unequal conditions. Where the state provides a service already paid for via taxes and requiring no additional money, the private entity is forced to charge the client additional money, since the state does not share taxes with them.
The state introduces distortions, often quite unpredictable ones, into the market picture, and as long as these distortions persist, judging market efficiency becomes more difficult. One might start a business relying on the current market conditions, only to encounter a completely new regulatory framework in the middle of the project, and that’s it—the project must be shut down and the losses written off. State institutions can usually count on their interests being considered during legislative innovations, so planning is a bit easier there. But it is somehow strange to conclude based on this that the state is necessary. This is simply an example of unfair competition, which is created by the state itself.
To summarize. Indeed, the state can impose arbitrarily high costs on private companies for anything by using force or the threat of force. But who needs such a state? Certainly not the consumer, onto whom all these costs will eventually be shifted.
