Larger level government authorities are not more trustworthy than local ones and are likely to have their loyalties further from me geographically than the untrustworthy local government.
The alternative is to live with market failure: watching your locality make poor investment decisions that transfers wealth to neighboring cities and counties.
If you want to work together, the cities need to form up a larger scale contract and work together. If you are willing to compete against your local cities, you are allowed to do that as well.
The market transfers your wealth away to those who are willing to provide services for a cheaper price. At some point, you gotta work together if you want to counteract this force.
The market allows me to voluntarily trade my wealth for goods and services that I perceive as having equal or greater value than what I'm giving up in trade. Every single voluntary purchase is a net benefit to both me and the seller.
The same can't be said for involuntary trades, like those that filter through the government. This is the situation we're discussing right now. The government took your money and spent it on some pet project, probably tied to a donor. They then opened that project to "the public," some of whom use it without paying in. That is definitely a problem. But it is not solved by moving up to the next tier of government. That only makes the situation worse, because the pet project/donor is more likely to be even further from you geographically. At least with the local government there is some chance you will benefit from the project, and you have more ability to oversee and change local political priorities.
And yet, such situations lead to market-failure situations.
For the most part, I'm a free-market capitalist. But every philosophy has an error if you take it to the extreme. In the case of pure capitalism, you cannot deal with "market failures" (in particular: externalities, monopolies, cartels, tragedy of the commons...) with purely market-driven economics.
Its a known fact. The only solution to market failures is to stop using the market as a tool.
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Government policy should be to default to capitalism, but if an externality (or other market failure) is identified, you should use the Government as a tool to correct the market failure.
Ideally, you should minimize the Government's enforcement. Regulation is poorly accepted by the lay population who fail to understand its importance. But since 3rd party intervention are provably the ONLY solution to a market failure (indeed: its the DEFINITION of a market failure: when a 3rd party has to intervine)... your choices are as follows:
1. Accept the market failure as reality. (Ex: allow monopolies to exist. Allow externalities to warp the costs. Etc. etc.)
2. Create a 3rd party (usually Government) to regulate or force people to leave the market driven approach.
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> The same can't be said for involuntary trades, like those that filter through the government. This is the situation we're discussing right now. The government took your money and spent it on some pet project, probably tied to a donor.
Case in point for market externality: City A uses up too much water from a river, such that City B no longer has enough water to survive. Gathering water from a river is extremely cheap, and maybe City A and B lived in peace before... but today cities can grow exponentially. And the increased usage by City A has led to City B's downfall.
This is a realistic situation on the Colorado River, where cities upstream have taken so much water that the Colorado River no longer flows to the ocean. To ensure that cities downstream even get enough water, there is a multi-city and multi-state agreement to ensure that Nevada, California and Arizona split the water appropriately.
Unfortunately, the agreement is flawed. But some agreement is better than no agreement at all.
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The free market "solution" is that City A gets all the water, because its upstream. There's no reason for City A to cooperate with City B, any cooperation at all means that City A (from a free-market perspective) "loses" water that it feels like it deserves.
When people talk about infrastructure built by one municipality being used by people who avoid taxes by living across a political boundary they don't usually mean rivers. What are you talking about?
> avoid taxes by living across a political boundary
If you're really worried about that issue, then just use toll roads owned by the local municipality. Sometimes there's a simple market solution to some problems. So I'm not really concerned about problems where the market has a solution.
The issue with your way of thinking: is that in general... you will eventually come across an externality which cannot be addressed by market-driven thinking. Realize that capitalism is a tool that works in specific circumstances (basically any circumstance without a market failure / externality).
You're arguing against things I didn't say and don't believe. All of my comments assume the context of this discussion which is people moving just beyond political borders to avoid taxes and then using the public infrastructure of the place with the high taxes. Nothing I've stated was intended to be universal or without exceptions.
Alright. So its an externality. At the end of the day: the people who benefit from the infrastructure aren't paying for the use of it.
Public infrastructure needs to be built, but if a local government builds it, other people come and the local government fails to get paid. Local government needs to tax those other people somehow, but they're outside the jurisdiction.
So the solution is to use the state-government taxes (or national government taxes, if it crosses state lines) to pay for the infrastructure.
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I mean, do you not agree that its a market failure situation? If you agree its a market failure, the only solution is a 3rd party enforcing its will to override the market.
Its proven. The free market cannot solve any externality. Its a true market-failure situation.
