People often buy goods in bundles: we take a subscription to a set of repair services, we buy insurances which protect us from many situations, and Netflix offers us a huge variety of movies.
These bundles grow and shrink in size through the centuries, as new technologies and new business models change the market dynamics. Notably, the internet has and is continuing to reshuffle power in many industries.
There is however one bundle of goods which has remained quite static throughout the world for over 100 years: the goods we receive from governments. Citizens in most countries in the world pay up to 50% of their income, and receive public goods things like healthcare, schooling and roads.
What might an unbundling of their services look like?
To understand how the bundle of government-provided goods might change, let's first have a look at some of the goods which governments currently provide:
- Courts and regulation
- Emergency services
- Environmental protection
- Public transportation
- Public buildings
- Social services
- Urban planning
- Transportation infrastructure
- Waste management
- Water supply network
- Business support (from small innovation subsidies to major stakes in airlines)
- Grants to supra-national governments
Location, location, location
The classic libertarian ideal is to get rid of the entire government. A modern libertarian ideal would focus on getting rid of any big organization and maintain governments where they are still useful. To see which aspects of the government can be kept, it is important to realise:
Governments are just a collection of location-constrained governance mechanisms.
As the economy digitizes and identity is less defined by location, we may see that non-location constrained goods will no longer be provisioned by governments
Consider certain types of (1) education, (2) news, (3) and environmental protection. In principle, there is no need to let these goods be completely provided by governments. Sure, everyone should speak the same language. But if your citizens learn software engineering efficiently online, there's no need to maintain an entire university ecosystem.
How could can we identify how such shifts could indeed happen? Assuming we want to maintain a consistent total level of taxes, a population could fork off to a different legitimate governance mechanism and decide in the future to spend a consistent percentage of its taxes on equal access to online education.
It will require a referendum or overwhelming evidence before a government relinquishes part of its tax power to a different entity though. Evidence is hard to find though. Top-down complex economic analyses are riddled with assumptions and can never predict qualitative differences in service provisions.
The way forward is to experiment and steward organizations which are currently government-subsidized. The first ones suitable to live completely independently from governments may be international membership-based organizations such as municipality collaborations.
If set up in a smart way, individuals will have the incentive to keep donating their taxes to such organizations as long as they receive some actual benefit from the organizations. Precisely as it should be.