Friday, November 5, 2010

Pragmatarianism - Defined

The large bulk of political debate revolves around whether a good should be public or private.  Anarcho-capitalists believe that no goods should be public.  Libertarians believe that at a minimum...national defense, the courts and the police should be public goods.  Liberals believe welfare, education, healthcare, etc should be public goods.  Socialists believe that all goods should be public.  For reference...here's a political spectrum diagram.

Where do you fall on the spectrum?  How certain are you that your position is correct?

Pragmatarianism offers you the opportunity to put your money where your mouth is.  It's basically a contest to see whether the public or the private sector is better at producing a good.  The judges of the contest would be the taxpayers themselves and each time they paid their taxes they would use their taxes to indicate who the winners were.  

Whether you are completely certain, or not at all certain of your political position...pragmatarianism offers a safe way to determine who's right.  It's safe because we would initially pay the exact same amount of taxes.  If the market starts winning then the tax rate will gradually decrease.  If the state starts winning then the tax rate will gradually increase.  If we're at perfect equilibrium then the tax rate will stay exactly the same.

Pragmatarianism isn't my idea...I've been told that a sci-fi story* was written on the topic several years ago.  But in the absence of anybody mentioning the name of this idea I took the liberty of naming it myself.  Pragmatarianism as you might have guessed is pragmatism + libertarianism.  Pragmatism contributes recognition that taxes are most likely necessary to overcome the free-rider problem.  Libertarianism contributes recognition that the invisible hand is the best way to determine whether a good should be produced by the private or public sector...or by both.

On one hand we would have coercion and on the other hand we would have choice.  Taxpayers would not have the freedom to choose whether they pay taxes...but they would have the freedom to directly choose how their taxes are spent.  If you are among the 26.2% of the population that approves of congress then you would still be able to choose to allocate some or all of your taxes to congress.

For additional reading on pragmatarianism see...

* I'd love to read the story but the person couldn't remember the title or author

[Update]  We, The People - Jack C. Haldeman II

2 comments:

  1. Taxes don't overcome the free rider problem. They introduce a new free rider problem: Each individual has little incentive to spend resources ensuring that the government is spending tax revenues on the things it should be spending them on.

    What you propose would not solve this problem. Suppose the public, consisting of you and me, wants the government to spend 20% of revenues defending property rights and 0% on drug prohibition. If the people in the government want to spend 10% on property rights and 10% on drug prohibition, they could simply ask how much of our taxes we want to direct to a broad category like law enforcement and make the rest of the decision for us.

    In this case, the government isn't providing a menu that allows us to fully choose how the money gets spent. Either one of us could try to change that, but suppose that correcting the problem is worth $100 to you and $100 to me. If it takes more than $100 in resources to get the government to provide a better menu, the free rider problem is back. If the public consists of more than two people, the problem is even worse.

    This presumes that the government is entirely lawful and just plays games within the law. Based on how the US Constitution is routinely ignored, I would expect the government to not even adhere to any commitment to spend according to the stated preferences of the public.

    By the way, your use of the terms "public goods" and "private goods" is somewhat nonstandard.

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  2. Thanks for your comment. When considering objections to the pragmatarian system it helps to check if your objections are applicable to the non-profit sector.

    In the non-profit sector it seems unlikely that one organization would have as widely diverse goals as defending property rights and enforcing drug prohibition. The leaders would understand that people who value property rights might not necessarily value drug prohibition and vice versa.

    The extreme example that I like to use is to imagine if donors to PETA and donors to the NRA had to pool their donations and elect representatives to decide how to divvy up the pool between both organizations. The result would be hyperpartisan obstructionism and a greatly diminished incentive to donate.

    To reduce hyperpartisan obstructionism and increase incentive to contribute we just need to allow taxpayers to directly allocate their taxes.

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