Maastricht Treaty revisions needed?

[Jester]

I agree with you. However, you took that sentence out of context. I was not speaking of private versus government. I was speaking of collective paying versus individual paying. The example that I gave, of insurance and catastrophic health care costs, should have made that clear. I was refuting the claim that a system would go bankrupt if people paid for their individual usage rather than spreading the cost over many.

But that is the heart of the issue. Collective payment (at least in a government sense) often saves a great deal of money vs. individual payment. There are massive coordination failures that prevent individuals from coming together privately to provide for things like security, or law. Were people to try and pay for them individually, and were they provided on that basis, the costs would not be just their share of the equivalent collective costs. I would say another such coordination failure is evident in most private health insurance - costs are higher than in equivalent public systems.

For some sectors, the whole is basically just the sum of its parts. For others, not so - externalities, information asymmetries and coordination failures can overwhelm the basic market mechanism, or at least severely distort prices.

I don't think so. That is a criterion, of course. But it is not the only one, and maybe not even the most important. Universality of access may trump cost, as might consistent quality across geographic and demographic borders. For some of those goals, government is the only institution with the structure capable of achieving them.

True enough. There are certainly some areas where I'm happy to see government intervene, even when the outcomes are not economically optimal, in order to attain some other goal, like equality - although we always need a careful eye when we start going down that road.

However, I'm optimistic enough to think that the government can solve at least most of the problems it needs to while restricting itself to the things it (probably) does best - utilities, regulation, education, health care, infrastructure, law and order. It seems more efficient to work with those tools, than to go outside them.

-Jester