i had planned on continuing the series on market alternatives to government services with a post on security services, such as police. by now, though, i think it should be pretty clear that this post would be very similar to the other two below and would simply point out that market-based police would be higher quality, lower cost and kept in check by competition. they would exist only to protect the person and property of clients, like cars, homes, businesses and any currently illegal drugs they use, etc., from criminals. i think you get the picture concerning private provision of services.
there's something else that has been on my mind recently that has been rampant in the media. the stories on how the federal reserve (referred to from here as "the fed") is trying to help keep our financial system together by providing aid to companies "too large to fail" and how they are helping to mitigate the the current crisis by "providing liquidity" to the markets. ugh! the assumptions made there are so deeply flawed that i usually don't say anything about it because it would take forever to explain how wrong-headed it is. it's as if someone told you that the earth is flat because the king of atlantis discovered that 2+2=5. it's just so wrong on so many levels. it makes assumptions based on assumptions that are based on flawed premises.
make no mistake, the current crisis is almost completely the creation of the federal reserve's loose monetary policy. supposedly, the fed attempts to stabilize prices by manipulation of interest rates. the first question is, "why"? prices are a necessary function of a market and the way in which resources are efficiently allocated. deflation of prices (meaning prices go down) is a normal function of a healthy marketplace and was the norm for the u.s. from 1800 to 1913 (the year the fed was created). during that time, the u.s went from a few colonies to the most powerful nation on earth. deflation can't be that bad, for that to occur. plus, it's a net benefit for consumers to pay lower prices. some might point out that leads to lowered wages. this isn't necessarily so, but even if it did, the increase in purchasing power makes up for it. it also creates an incentive to save. if the money you hold is constantly appreciating in value, one would be wise to hold it as long as possible. this allows for capital expenditures when opportunities arrive with a greater rate of return than holding the cash. this is wise investment.
currently, the fed is constantly printing money for the stated reason of combating deflation, or stabilizing prices. but this only serves to distort the market and capital investment signals to entrepreneurs. when this occurs, currency never appreciates, and in the current reality actually depreciates over time. this causes a signal to be sent to entrepreneurs to invest in capital because of an expected higher rate of return. because the signals are false, precipitated by an artificial increase in money supply rather than reflecting the realities of the market, capital is misallocated, leading to what is referred to as the "boom" phase of the business cycle (a phenomenon that didn't exist before the fed's creation). because these investments are made in error, the distortions of such malinvestment must eventually be corrected by the market, resulting in the inevitable "bust" phase of the business cycle.
all this aside, there are other reasons why the fed's policy is so destructive. because the fed isn't accountable to anyone and their operations are secret, they can't be effectively overseen and fed chairmen can appointed that are beholden to the will of the power elite. this allows access to an unlimited supply of money that can be printed for political reasons and used at the current market value. once this money is introduced to circulation, the value of existing dollars is reduced because of the increased supply. since the fed's creation in 1913, the dollar has lost nearly 96% of its value. in this way, the fed can be used as a vaccuum to effectively suck the value out of the pockets of all dollar holders and transfer it to the state and the politically connected without anyone (being educated in the state schools where this isn't taught) understanding why their dollars are buying less. no need to raise taxes, or to increase deficits. in fact, politicians can make themselves appear to be heroes by making some paltry, but well publicized tax cuts while increasing spending by looting taxpayers through the inflation mechanism, which they have not been taught to understand.
of course, there is always the issue of theft, ever-present in the machinations of the state. the non-consentual taking of value from citizens is robbery, just as taxation is, but sneakier. the fed is a very dangerous institution from the point of veiw of society, virtually unlimited in its ability to steal, without any transparency. its effects can only be inferred through consquences in the marketplace. the fed is the state's number one tool in achieving its goal of transferring wealth and power from society to the political elite.
this is hardly a complete study on the fed and its effects on the economy, but a simple primer. more rigorous documentation can be found at the excellent mises institute.