Study their behaviors. Observe their territorial boundaries. Leave their habitat as you found it. Report any signs of intelligence.

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Saturday, August 05, 2006

The Yellow Pages Test

How is it that I'm only now hearing (from Reason Foundation's Annual Privatization Report) of the brilliant rhetorical device called the "Yellow Pages Test"? has mentions as early as 2003, but the phrase seems to go back at least as far as 1992, when Stephen Goldsmith became mayor of Indianapolis and began privatizing city services. In his later book, The 21st Century City, Goldsmith put it this way:
If the phone book lists three companies that provide a certain service, the city probably should not be in that business ... The best candidates for marketization are those for which a bustling competitive market already exists. Using the Yellow Pages test, we could take advantage of markets that had been operating for years.
This is closest thing I've seen to a bumper-sticker-sized way to describe the textbook economic principle that the government should produce pure public goods and manage natural monopolies but not try produce any other kind of good or service. (The government should also manage natural resources to the extent required to prevent negative externalities and tragedies of the commons.) There aren't multiple vendors in the Yellow Pages competing to defend the nation, prevent floods, or provide local networks of roads, pipes, and wires, and it's untenable for anarchocapitalists to fantasize that there would be such vendors if only the state abstained from initiating force.
Of course, the "Yellow Pages Test" doesn't capture all the subtleties of the theory of public goods. For example, if we set aside the point that we desire not just sporadic aid for the indigent but a guaranteed minimum level of sustenance, then one can find multiple charitable organizations that compete to aid the indigent, or one can imagine multiple voluntary defense militias or police services. However, none of them can overcome the free-rider problem, which inevitably causes underproduction of the good (e.g. charity or defense or justice) when those who desire the good behave even approximately rationally.
So now I'm going to have to rework my campaign speech and brochure to use the Yellow Pages Test. And I wonder: what other good rhetorical devices for promoting minarchism are out there waiting for me to hear of them?

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