Tuesday, November 30, 2010

Rachel Maddow...Let's Shower Together!

Dear Rachel Maddow,

I am a straight male and I would not kick you out of bed.  Would you mind taking a shower with me?  Does that question sound totally inappropriate?

You seem to have it in your head that the military is just like any other job.  The detail that you are missing is that soldiers, unlike most coworkers, often have to shower together...especially during basic training.

Yes, it would be possible to designate different showering times for gay soldiers but the military is all about cohesion and uniformity.  "Dress right dress" so to speak.  You DO NOT want to be the solider that's not like the others.

On your show you've had plenty of ex-military gay people...but to make a truly informed decision invite some random, ex-military, straight soldiers on to your show.

Sincerely,
An Army Veteran

Monday, November 15, 2010

It Wasn't My Idea

When I was in elementary school I was always getting in trouble for reading books during class.  Nope, not comic books...but books from the class library [1].  I would read pretty much any book that I got my hands on. My friends had it good because I would read a ton of books and then share with them only the very best of the best books.  Music was also eventually added to the same filter-sharing process.

If a friend enthusiastically mentioned that they got so and so's new book or CD I would jokingly ask them who told them about that author/band...even though we both knew that it was me.  Sometimes, just to give them a hard time, I would claim credit for an author/band that I hadn't told them about.

One band I definitely did share with friends was Ben Folds. He has a song called Rockin The Suburbs in which he strongly disclaims the idea of slavery...
In a haze these days
I pull up to the stop light
I can feel that something's not right
I can feel that someone's blasting me with hate
And bass
Sendin' dirty vibes my way
'Cause my great great great great Grandad
Made someones' great great great great Grandaddies slaves
It wasn't my idea
It wasn't my idea
Never was my idea
Some things we deserve credit for, some things we'd like credit for and some things we don't want any credit for.  In my post...Justification for Government...Debbie H. shared the following comment...
Well, if you only want to figure out how to make stealing be a tad less irritating to the victims of the theft, then go right ahead. But if you want to do that, you can't also claim that your ideas don't affect those who are striving for a voluntary society. Because your idea still requires coercion through the threat of violence on your neighbors.
Pragmatarianism is a combination of taxes (coercion) and the invisible hand (choice).  I definitely can't take credit for either taxes or the invisible hand.

Who gets credit for the idea of taxes?  No idea.  What does come to mind is Jesus's response to the question of whether Jews should have to pay taxes to the Roman occupiers..."Render unto Caesar the things which are Caesar’s, and unto God the things that are God’s".  Two thousand years later and we're still not happy about taxes.  Nothing is certain but death and taxes.

In comparison, there's no question who deserves credit for the invisible hand...Adam Smith.  In his book, The Wealth of Nations, he wrote the following...
By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
What about pragmatarianism?  Do I get credit for that?  Nope, not according to a member of the facebook libertarian group.  A long time ago he'd read a sci-fi story with the same concept.  He couldn't remember the name of the author and for all I know I might have read the same story and totally forgotten about it...at least on the conscious level.  For fun we can complicate the answer a bit.

How much do you have to modify somebody else's creation before you can call it your own?  It's probably an urban legend but I've heard it said that you only need to change one element of a patented invention for it to lose its patent protection.  That doesn't sound right.

In terms of music, back in the day Vanilla Ice took ("sampled") the catchy bass line from Queen's song "Under Pressure" and added it to his song "Ice Ice Baby" [2].  Initially he did not feel the need to give Queen any credit.  In more recent times, I discovered that nearly all Drum and Bass songs are based on a sample of an old song by a group that I'd  never even heard of.  The group was called The Winstons and in 1969 they released a song called "Amen Brother"...the world's most important 6-sec drum loop.

On the visual side of things...Marcel Duchamp's Mona Lisa comes to mind.  The physical changes he made to the Mona Lisa were very minimal...but still more than the changes he made to his Fountain.  The "Fountain" was actually just a urinal placed on a pedestal.  Kind of the same but completely different was Edward Weston's photograph of a bedpan.  In both cases, without any physical changes...the ordinary became extraordinary.  Adam Smith did the same thing when he showed us self-interest in a positive light.

Would I like credit for the invisible hand?  Sure.  Would I like credit for taxes?  Eh.  Just because taxes have been around forever doesn't make them ethical.  But if we remove taxes from the definition of pragmatarianism then we're just left with the invisible hand.  Adam Smith himself recognized the necessity of some coercion.  From The Wealth of Nations...
When a civilized nation depends for its defence upon a militia, it is at all times exposed to be conquered by any barbarous nation which happens to be in its neighbourhood. The frequent conquests of all the civilized countries in Asia by the Tartars, sufficiently demonstrates the natural superiority, which the militia of a barbarous, has over that of a civilized nation. A well-regulated standing army is superior to every militia. Such an army, as it can best be maintained by an opulent and civilized nation, so it can alone defend such a nation against the invasion of a poor and barbarous neighbour. It is only by means of a standing army, therefore, that the civilization of any country can be perpetuated, or even preserved for any considerable time.
Any coercion over what is absolutely necessary to secure our freedom from harm can be considered unethical.  Some people have a narrow definition of harm (negative liberties) while other people have a broad definition of harm (positive liberties).

Whether your definition of "harm" is broad or narrow...pragmatarianism can only positively affect those who are striving for a voluntary society.  Here are three things that I have no doubt of...
  1. Voluntary organizations can provide all the same public goods that the state currently provides.    
  2. Voluntary organizations can provide most of these goods more efficiently than the state.
  3. Opportunity costs would ensure that tax payers would choose the most efficient option.
For example, if voluntary organizations provide better public education than the state does...then less and less people would allocate their taxes to the department of education.  Voluntary organizations can make most state organizations completely redundant.  




[1]Daniel Boone is one person I remember reading about.  There really should be more historical fiction books for kids.   "there is nothing to be learnt from a Professor, which is not to be met with in Books." - Hume
[2]Ok, I'll admit that at the time I could recite all the lyrics from "Ice Ice Baby"

Friday, November 12, 2010

Department of Redundancy Department

In a few days my "English" friend will be visiting from England.  He's actually Welsh so he shakes his fist at me when I refer to him as "English"...and I shake my fist at him for a few reasons as well.  He's "visited" (where does "visit" end and "stay" begin?) several times before and it usually takes a bit of time for my ears to adjust to his Welsh accent.  However, I've since learned most of the different words and expressions that they use over there.

For example, over there they euphemistically say, "you've been made redundant" while over here we say, "you're fired".  Fans of the UK Office*  will of course recall the poignant scene where David Brent is Made Redundant.  In that scene, when David is confronted with redundancy, he says the following line with utmost sincerity, "I will try twice as hard, I really will.  I've been complacent, I'll turn this place around..."

Pragmatarianism is the single most effective way to eliminate government complacency.  Each and every tax payer would have the power to use their taxes to decide whether congress or any other government organization was redundant or complacent.  The democratic process on its own is not sufficient.

Here's what a liberal friend wrote to me a while back...
My ex works for the state department. She debriefs Hillary on the 5 or 6 countries in Africa that she represents in the areas of human rights and labor. This job consists of reading articles on the internet, facebooking and taking a 2 hour daily nap in the vacant office behind her cubicle. She makes $97,000 a year. And I've met some of her friends / coworkers. She's not alone in these habits. She also has friends in high government office downloading porn and sleeping with not only the people they are supposed to be regulating, but pretty much everyone else they meet. It's crazy. 
Maybe my liberal friend was inclined to exaggerate the situation because he was disgruntled with his ex?  I don't know...but we all have unique perspectives and insights.  It's why we all agree that two heads are better than one.  We should also all agree that, whether you are a liberal or libertarian, the government can produce the exact same levels of public goods using a lot less money.  Getting more bang for our buck is otherwise known as efficiency.

Interestingly enough, the State Department was one of the few cabinet departments that Milton Friedman said was necessary...Milton Friedman on Libertarianism.

In my last post, when I shared my justification for government, there were quite a few people that disagreed with my justification.  How crazy would it have been if everybody had agreed with my justification!?  It's really not a bad justification though.  We just work backwards from the premise that everybody would agree that an entirely redundant government would be entirely unjustified.  A partially redundant government would be partially justified and an entirely necessary government would be entirely justified.

What's necessary for you might not be necessary for me.  We don't purchase exactly the same private goods so it's highly unlikely that we would use our taxes to fund the exact same public goods.  There's no way that the visible hand (congress) can factor all the myriad of valuations and market signals that the invisible hand can.

A pragmatarian is somebody that is well aware that congress, in terms of tax allocation, can be made redundant.  Watch the video again of David Brent being made redundant and imagine the American public telling congress that they've been made redundant.

*I'm a fan of both the UK and American Office but, even though I can appreciate a decent amount of awkwardness, sometimes the UK version crosses the line into unbearable levels of awkwardness.

Thursday, November 11, 2010

Power and Control

Politics is all about power and control...which is why we need checks and balances.

Frank Herbert -  "He who controls the spice, controls the universe!" - Dune

Pragmatarianism would transfer some control of taxes from congress to taxpayers.  The amount of control transfered would be determined by taxpayers themselves and would reflect their confidence in congress.  This check on the power of congress would have been supported by Herbert Spencer.

Herbert Spencer 
     When that "divinity" which "doth hedge a king," and which in our day has left a glamour around the body inheriting his power, has quite died away - when it begins to be seen clearly that, in a popularly-governed nation, the government is simply a committee of management; it will also be seen that this committee of management has no intrinsic authority. The inevitable conclusion will be that its authority is given by those appointing it; and has just such bounds as they choose to impose. Along with this will go the further conclusion that the laws it passes are not in themselves sacred; but that whatever sacredness they have, is entirely due to the ethical sanction - an ethical sanction which, as we find, is derivable from the laws of human life as carried on under social conditions. And there will come the corollary that when they have not this ethical sanction they have no sacredness, and may be rightly challenged.
     The function of Liberalism in the past was that of putting a limit to the powers of kings. The function of true Liberalism in the future will be that of putting a limit to the powers of Parliaments - Contemporary review, Volume 46
For a few weeks now a Marxist concept that I learned while studying International Development at UCLA has been on my mind but the word wasn't even on the tip of my tongue.  Surprisingly, I just remembered it..."comprador bourgeoisie".  Basically, they were well-connected, upper class, middlemen in developing countries.  A multinational corporation (MNC) would go into a developing country and deal with the local comprador bourgeoisie...who would help "facilitate" the MNC's exploitation of local resources.  The MNCs and the comprador bourgeoisie would get rich and very little, if any, money would trickle down to the proletariat.

Is it a bit much to think of congress as comprador bourgeoisie?  Perhaps...but, in a pragmatarian system, that would be up to each taxpayer to decide.  I kind of just wanted to write it down in case I forgot it again.

Another term that I struggled to remember was "moral hazard".  I'll just be lazy and grab this one from Wikipedia...
Moral hazard also arises in a principal-agent problem, where one party, called an agent, acts on behalf of another party, called the principal. The agent usually has more information about his or her actions or intentions than the principal does, because the principal usually cannot completely monitor the agent. The agent may have an incentive to act inappropriately (from the viewpoint of the principal) if the interests of the agent and the principal are not aligned.
It's straightforward to see that the interests of congress (the agent) and taxpayers (the principle) are not completely aligned.  The primary goal of politicians is to be (re)elected so their interests are strongly aligned with whoever will finance their campaign.

Guido Calabresi 
In a market regime, some are made richer and some made poorer; in a command structure, some have greater authority and some less. It is equally clear that, in an all-market regime, wealth constitutes authority, and that, in an all-command structure, authority results in wealth. Also true, but perhaps less plain, is the fact that in mixed systems like ours people will use their distributional advantage in one medium to overcome their distributional disadvantage in the other by 'altering' or 'corrupting' that other medium. The use of money to influence or 'corrupt' those in authority is easy enough to understand, whether through bribes or campaign contributions.- The Origins of Law and Economics: Essays by the Founding Fathers
This is also know as rent-seeking behavior...when special interest groups and big business attempt to influence congress.

Some decades before Herbert Spencer was worrying about how the power of parliament would be limited...Alexis de Tocqueville was worrying about tyranny of the majority.  

Alexis de Tocqueville
Again, it may be objected that the poor are never invested with the sole power of making the laws; but I reply, that wherever universal suffrage has been established the majority of the community unquestionably exercises the legislative authority; and if it be proved that the poor always constitute the majority, it may be added, with perfect truth, that in the countries in which they possess the elective franchise they possess the sole power of making laws. But it is certain that in all the nations of the world the greater number has always consisted of those persons who hold no property, or of those whose property is insufficient to exempt them from the necessity of working in order to procure an easy subsistence. Universal suffrage does therefore, in point of fact, invest the poor with the government of society. - Democracy in America
As I pointed out in my entry on taxpayers, taxpayers are better educated than the general public.  Therefore, pragmatarianism would help function as a check against any possible tyranny of the majority.

To review, pragmatarianism would...
  1. help check the power of congress
  2. help check tyranny of the majority
  3. result in an optimal division of labor between the private and public sector
  4. ensure that public goods would be produced with maximum efficiency
  5. ensure levels of all public goods would accurately reflect society's values
  6. provide greater freedom
  7. allow taxpayers to joyfully contribute to public goods 

Wednesday, November 10, 2010

Uninformed Taxpayers

One criticism of pragmatarianism that crops up fairly frequently is that "other" people would make uninformed allocation decisions with their taxes.  To address this criticism we can compare three different groups...the general public, taxpayers and congress.  

Taxpayers are better educated than the general public.  In fact, the more educated somebody is the more money they earn and the more money they earn the more taxes they have to pay.  Here's a diagram from the Bureau of Labor Statistics that illustrates the strong correlation between education and income...


To give you an idea of how much taxes the general public would have to work with...the bottom 40% of the US population owns less than 1% of the wealth.  

Would taxpayers make more informed allocation decisions than congress?  In a pragmatarian system every taxpayer would ask themselves that question.  If they answered "no" then they would give all or some of their taxes to congress.  If they answered "yes" then they would allocate their taxes themselves.

Of course, the tax allocation decisions of congress are also a public good.  The total quantity of revenue congress received would reflect how much taxpayers valued that public good.

It's important to note that just because somebody is educated doesn't necessarily mean that they are informed.  It just means that they have reasonable critical thinking skills.  Lobbyists currently provide congress with information in order to help make them make informed decisions.  In a pragmatarian system lobbyists would also be motivated to share that information with taxpayers.

Congress as a group can only process a certain amount of information.  Allowing taxpayers to decide how their taxes are allocated would expand the quantity of information that factors into how taxes are allocated.  It would also more accurately reflect the values of taxpayers.  

Justification for Government

On Kent's "Hooligan Libertarian" Blog I was asked..."Do you have a justification for government?".  I'm guessing that the person who asked the question is an anarcho-capitalist so that's how I'll approach it.

The founder of anarcho-capitalism, Murray Rothbard, really hated the state.  He said if there was a button that would completely destroy all of government in an instant...then he would push that button until his thumb blistered.  If, after pushing that button, it turned out that a state was necessary…then what?  Do we just hit ctrl + z?

To his credit, Rothbard didn’t just hate the state because he hated paying taxes.  He wrote numerous books with detailed explanations how the free-market could provide all public goods better than the state.  Were his explanations any good?  Liberal academics didn’t think so…they were considerably more threatened by the limited government ideas of Robert Nozick.

If the free-market can provide all public goods better than the government can, then is government justified?  It’s a Catch 22 though because the only way we can truly know if government is redundant is by getting rid of government.  Most would agree this approach is too risky…and since we live in a democracy…we have to take the majority’s opinion into consideration.  

Rather than one button that would destroy government in one fell swoop…what if all tax payers had a button that when pushed would deprive redundant government organizations of their tax dollars?  This is the pragmatarian approach.

If a government organization is redundant…but none of your taxes fund its existence…is there any reason to hate that government organization?

I’d say that at least 99.9% of people think at least one government organization is absolutely necessary.  For you .1% of people that think otherwise…the solution is simply to work together to provide free-market alternatives to that one government organization.  

The more say people have how their taxes are spent the more justified a government is.  The American Revolution occurred because people were being taxed without representation.  

The current government is only partially justified because people only have a very imperfect say with regards to how their taxes are spent.  They lose their say if the person they vote for is not elected and there's no guarantee that a representative will accurately represent the interests of the people who voted for them.

Incidentally, in contrast to the anarcho-capitalist perspective of hating the state...Reason magazine shared five reasons why libertarians should love the state.  My favorite is number #4..."Government bashing alienates those you want to reach"...
Incessant government-bashing may make you feel good, but alienates most everybody who knows and loves a police officer, firefighter, teacher, social worker, anyone who has ever collected an unemployment check, and anyone who saw NASA put a man on the moon.

Tuesday, November 9, 2010

Libertarianism

Simple

Libertarians are socially liberal and economically conservative. Social freedoms can be represented by the bedroom and economic freedoms can be represented by the boardroom.
  • Libertarians = keep government out of both the bedroom and boardroom 
  • Liberals = keep government out of the bedroom but in the boardroom 
  • Conservatives = keep government in the bedroom but out of the boardroom 
  • ??? = keep government in both the bedroom and the boardroom. 
Another simple way of thinking about libertarianism is that, to paraphrase Oliver Wendell Holmes Jr... the freedom to swing your fist ends where somebody else's nose begins. This concept is specifically referred to as J.S. Mill's Harm Principle.

Less Simple

Libertarianism is an ideology of limited government. Why should the government be limited? There are two main theoretical justifications...consequentialist (results) and deontological (rights).

The consequentialist theory is that, for most goods, the invisible hand is more efficient at allocating resources than the visible hand (planners - congress). Therefore, the state should be limited to producing goods that society values but, due to lack of financial incentive, the market largely fails to produce.

The deontological theory is that property rights trump "most" market failures. The exceptions are those public goods that deal with protecting your property. Therefore, the state should be limited to providing goods that help protect your property from others.

Practical

Libertarians want to move welfare, education, healthcare and numerous other public goods over to the private sector. These goods can be thought of as Pseudo Public Goods (PPGs) because they only loosely match the economic criteria of a public good. From the consequentialist perspective it's generally assumed/believed that the private sector will produce comparable (if not greater) levels of PPGs as the public sector. From the deontological perspective, given that property rights trump PPGs, it's irrelevant whether the private sector will produce the same levels of PPGs as the public sector.

Criticism

The free-rider problem is by far the strongest argument for not moving PPGs over to the private sector. If people had a choice whether or not to fund PPGs it's very likely that funding for PPGs would decrease significantly.

On the off-chance you manage to convince a libertarian that the private sector will under-produce PPGs they can always fall back on the deontological argument. It's their ace in the hole.

Trying to attack the deontological justification for libertarianism is as useless as trying to attack the 10 Commandments. Everybody has different value systems...they are all subjective and as such cannot be proved wrong.

Recently though I was pleasantly surprised when a member of the Libertarian Party on facebook shared a link to Jeffrey Miron's blog where he acknowledges that the free-rider problem isn't just applicable to national defense...Libertarianism and Anti-Poverty Programs *

Solutions

Libertarians, liberals and conservatives all have different value systems. It's fairly reasonable that people do not have the choice whether they pay taxes but it's very unreasonable that people are forced to fund public goods that they do not value. Tax payers should have the liberty to use their tax dollars to directly fund the public goods that they believe government should be responsible for providing. This is the pragmatarian approach.

The pragmatarian approach would allow the invisible hand to decide whether the public or private sector is better at producing a "public" good. The result would be...
  1. an optimal division of labor between the private and public sector
  2. public goods would be produced with maximum efficiency
  3. levels of all public goods would accurately reflect society's values
  4. everybody would have more freedom
  5. government would have less power
  6. taxpayers would transform into donors...and they would feel a "warm glow" when they made their "donations" to public goods.
The question then becomes...is it easier for liberals or libertarians to fully appreciate the pragmatarian solution? Pragmatarianism provides more freedom then we currently have...so libertarians should easily recognize it as being a far superior option when compared to the current system. However, some might refuse to concede that the free-rider problem is a legitimate problem. Liberals on the other hand might not sufficiently "grasp" the invisible hand to realize how much benefit they would derive from the pragmatarian approach.

So in other words, we can say that pragmatarians are either libertarians that understand the free-rider problem or liberals who understand the invisible hand.

To conclude here are a bunch of quotes. The first set establishes the connection between classical liberalism and libertarianism. The second set establishes who the most prominent libertarians were/are and the last set establishes what they thought/think about the scope of government.

Classical Liberalism and Libertarianism
  • The word liberal has an odd history. It comes from the same root as liberty, and originally it simply meant "free." In that broad sense, the United States as a whole is a liberal country, and all popular American ideologies are variants of liberalism. In a more restricted definition, a liberal was a person who believed in limited government and who opposed religion in politics. A hundred years ago, liberalism referred to a philosophy that in some ways resembeled modern-day libertarianism. For that reason, many libertarians today refer to themselves as classical liberals. - American Government and Politics Today 2008: The Essentials
  • The classical liberal movements of the eighteenth and nineteenth centuries are, of course, the forebears of contemporary libertarian thought. - Total freedom: toward a dialectical libertarianism
  • Contemporary libertarians believe, with some legitimacy, that the greatest threat to liberty is an expanding government with a monopoly on state power. Their answer: limit government, protect a basic skein of fundamental rights, and the rest will work itself out. In this respect, libertarians are true heirs of the classical liberal tradition. - The Political Centrist
  • Libertarianism has been more an intellectual than popular movement since its ancestor, classical liberalism, was first articulated by John Locke. William Maddox and Stuart Lillie identified six tenets of classical liberalism to which American libertarians subscribe in a modified form today: individualism, an instrumental view of the state, limited government, individual rights, legal equality, and representative government. These six tenets cluster around two domestic policy questions - the proper role of government and the prescriptions for apparent social inequalities. - Hostile takeover: the House Republican Party, 1980-1995
  • Scalet and Schmidtz quite correctly identify the classical liberal contribution to political theory as its focus on limited government, rather than (as classical liberals are often accused of preferring) "weak" government. The size of government is not the primary concern of classical liberals; its limits are. Limited governments tend to be small relative to unlimited governments. They also note that "classical liberals have been champions of democracy." The two issues - limited government and democracy - have traditionally been linked together in classical liberal thought by the theory of constitutionalism, which limits the powers of majorities no less than of minorities. - Realizing freedom: libertarian theory, history, and practice
Most Prominent/Influential Libertarians

This source establishes the prominence of Jefferson, Tocqueville, Adam Smith, John Stuart Mill, Ludwig von Mises, Friedrich von Hayek and Ayn Rand...
Libertarians cite as progenitors Jefferson, Tocqueville, Adam Smith, and John Stuart Mill as well as economists of the Austrian school Ludwig von Mises and Friedrich von Hayek, author of The Road to Serfdom (1944). But most Republican libertarians were first inspired not by these classical liberals but by the author of The Fountainhead and Atlas Shrugged. - New York Magazine Mar 4, 1996
This source establishes the prominence of John Stuart Mill and Herbert Spencer...
John Stuart Mill, the great and generous theorist of liberalism, and Herbert Spencer, a major exponent of laissez-faire individualism, whose writings appealed immensely to the Spanish anarchists, can be - and have been - rightly designated as 'libertarians' - Anarchist seeds beneath the snow
This source establishes the prominence of John Stuart Mill...
In contemporary times, libertarians have positioned themselves as the heirs to J. S. Mill and his defense of individual liberty. Their ideas have grown increasingly influential. Contemporary libertarians embrace Mill's On Liberty because it "sounds important libertarian themes: that individuals should be free to live as they choose so long as they don't harm others and that the power of government should be strictly limited." - Putting ideas to work: a practical introduction to political thought
This source establishes the prominence of Robert Nozick...
With thirty years' distance on its publication, one can safely assert that Robert Nozick's Anarchy, State, and Utopia (1974) has achieved the status of a classic. It is not only the central text for all contemporary academic discussions of libertarianism; together with John Rawls's A Theory of Justice (1971), it arguably framed the landscape of academic political philosophy in the last decades of the twentieth century. - Natural rights liberalism from Locke to Nozick, Part 1
This source establishes the prominence of John Stuart Mill, Ludwig von Mises, Friedrich Hayek and Ayn Rand...
This political philosophy has a long pedigree. It has roots in the classical liberalism of eighteenth- and nineteenth- century British thinkers such as John Stuart Mill, and, more recently, in the Austrian school of economics represented more powerfully in the United States by Ludwig von Mises and Friedrich Hayek. On a more popular level, the novelists Ayn Rand and Robert Heinlein proved effective propagators of a radical anti-statist, individualist ethos, and according to historian Brian Doherty, more than half of the earliest Libertarians cited one of those two authors as their primary ideological influence. - Encyclopedia of American political history
Libertarians on the Scope of Government

1776 - Adam Smith (Michael Howard)
Although Smith was against governmental interference with the market, he had a a theory of government sometimes known as the "duties of the sovereign". The system of natural liberty required the sovereign to perform three duties; defense, the exact administration of justice, and the erection and maintenance of public works. Even though he was a libertarian, Smith realized that the market could not provide certain public goods which were too expensive for provision by private individuals. - Public Sector Economics for Developing Countries

1848 - Frederic Bastiat
For ourselves, we consider that Government is and ought to be nothing whatever but the united power of the people, organized, not to be an instrument of oppression and mutual plunder among citizens; but, on the the contrary, to secure to every one his own, and to cause justice and security to reign. - Government

1865 - John Stuart Mill
That the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. - On Liberty
1865 - Herbert Spencer
And now mark that whether we consider government from this point of view, or from that previously occupied, our conclusions respecting it are in essence identical. For when government fulfils the function here assigned it, of retaining men in the circumstances to which they are to be adapted, it fulfils the function which we on other grounds assigned it — that of protector. To administer justice, — to mount guard over men's rights, — is simply to render society possible. And seeing that the two definitions are thus at root the same, we shall be prepared for the fact that, in whichever way we specify its duty, the State cannot exceed that duty without defeating itself. For, if regarded as a protector, we find that the moment it does anything more than protect, it becomes an aggressor instead of a protector; and, if regarded as a help to adaptation, we find that when it does anything more than sustain the social state, it retards adaptation instead of hastening it. - Social statics
1884 - Herbert Spencer (Tom G. Palmer)
The challenge facing Americans today in defending constitutionally limited government was succinctly stated by the English libertarian Herbert Spencer in 1884: "The function of Liberalism in the past was that of putting a limit to the powers of kings. The function of true Liberalism in the future will be that of putting a limit to the powers of Parliaments." - Realizing freedom: libertarian theory, history, and practice
1944 - Ludwig von Mises
Liberalism differs radically from anarchism. It has nothing in common with the absurd illusions of the anarchists. We must emphasize this point because etatists sometimes try to discover a similarity. Liberalism is not so foolish as to aim at the abolition of the state. Liberals fully recognize that no social coƶperation and no civilization could exist without some amount of compulsion and coercion. It is the task of government to protect the social system against the attacks of those who plan actions detrimental to its maintenance and operation. - Omnipotent Government
1962 - Milton Friedman
First, the scope of government must be limited. Its major functions must be to protect our freedom both from the enemies outside our gates and from our fellow-citizens: to preserve law and order, to enforce private contracts, to foster competitive markets. Beyond this major function, government may enable us at times to accomplish jointly what we would find it more difficult or expensive to accomplish severally. However, any such use of government is fraught with danger. We should not and cannot avoid using government this way. But there should be a clear and large balance of advantages before we do. By relying primarily on voluntary co-operation and private enterprise, in both economic and other activities, we can insure that the private sector is a check on the powers of the governmental sector and an effective protection of freedom of speech, of religion, and of thought. - Capitalism and freedom
1963 - Ayn Rand
The proper functions of a government fall into three broad categories, all of them involving the issues of physical force and the protection of men’s rights: the police, to protect men from criminals—the armed services, to protect men from foreign invaders—the law courts, to settle disputes among men according to objective laws. - The Nature of Government
1973 - Friedrich Hayek (Alan O. Ebenstein)
These words were even more significant because of the government services to which he applied them - "without exception to all those services of which government possesses a legal monopoly, with the only exception of maintaining and enforcing the law and maintaining for this purpose an armed force, i.e. all those from education to transport and communications, including post, telegraph, telephone and broadcasting services, all the so-called 'public utilities,' the various 'social' insurances and, above all, the issue of money." In the last pages of Law, Legislation and Liberty, published in 1979, Hayek the classical liberal became Hayek the libertarian. - Friedrich Hayek: a biography
1974 - Robert Nozick
Our main conclusions about the state are that a minimal state, limited to the narrow functions of protection against force, theft, fraud, enforcement of contracts, and so on, is justified; that any more extensive state will violate persons' rights not to be forced to do certain things, and is unjustified; and that the minimal state is inspiring as well as right. Two noteworthy implications are that the state may not use its coercive apparatus for the purpose of getting some citizens to aid others, or in order to prohibit activities to people for their own good or protection. - The Political Theory of Robert Nozick
1995 - Richard A. Epstein
This basic insight - law must control the most lawless - lies behind the strong insistence on the basic rules of ordinary society. It also explains the libertarian's constant theoretical emphasis that the function of government is to control the use of force and fraud against the person and property of others. - Forbidden Grounds: The Case Against Employment Discrimination Laws
1996 - Dick Armey (Jacob Weisberg)
While one can reject this notion of a stripped-down state, libertarianism is a principled and coherent worldview. It provides an answer to every question. Police departments and the army - yes. Just about everything else - no. Ask most politicians, from Gingrich to Clinton, what the role of the federal government is, and you'll get a stream of mush. Poke a libertarian and you'll get a response like the one Dick Armey gave shortly after becoming majority leader: "Defend our shores, build a system of justice, and construct some infrastructure. Gee, I'm running out of other suggestions." - New York Magazine Mar 4, 1996
1998 - David Boaz
Libertarians argue that we can and should move a long way toward minimal government; outside of the protection of our rights by police, courts, and national defense, it's hard to think of goods and services that could be produced more efficiently by a government bureaucracy than in the competitive marketplace. Libertarianism: A Primer
2004 - James Walsh
Libertarians accept the need for a limited state - if only to provide basic levels of safety and security. Their focus is keeping the state limited to a disciplined - and small - number of activities. Anarchists still want to smash the mechanisms of state. As I've noted, anarchy is an emotional system. - Liberty in Troubled Times: A Libertarian Guide to Laws, Politics and Society in a Terrorized World

*[Update - 29 Oct 2011]

Friday, November 5, 2010

Government Efficiency

Last month Tad DeHaven wrote an article on government efficiency... ‘Government Efficiency’

The article was based on the premise that "government cannot operate like a business because it isn’t a business." True or false?

False! Government can easily operate more like a business simply by allowing tax payers to decide which public goods they "purchase" with their taxes. Because of free-riders we can't allow people to choose whether they pay taxes but we can allow people to choose which public goods their taxes help fund. This would force government organizations to compete for our taxes and the result would be greater government efficiency.

In the aftermath of Mao Zedong's devastating policies Deng Xiaoping led China from a command economy to a market economy. His most famous saying was that he didn't care if a cat was black or white...as long as it caught mice. In other words...results matter more than rigid adherence to ideology. This is the foundation of pragmatarianism.

The Free-Rider Problem

[UPDATE] - Here's a more recent post on the subject...Libertarianism and the Free-Rider Problem


How many of you know what the free-rider problem is? For those not familiar with the concept here's a brief but decent overview which includes a few solutions...Free Rider Problem.

One solution not mentioned was...mind reading. Reason magazine wrote an article about the topic last year... A Solution to the Free Rider Problem — Mind Reading

The Reason article shares how Caltech scientists developed MRI technology to determine exactly how much somebody values a public good. The reason article itself is pretty useless...but it does provide 3 things...

1. evidence that Reason magazine acknowledges the free-rider problem
2. 84 comments on the free-rider problem.
3. a link to the Caltech press release... Caltech Scientists Develop Novel Use of Neurotechnology to Solve Classic Social Problem

The comments are useful in that they provide us an insight into how the typical libertarian addresses the free-rider problem. The comments are easy to summarize. Basically, most public goods do not fit the strict definition of a public good therefore they should be moved over to the private sector. 

How does a liberal interpret such comments? Like so...libertarians are willing to subject the public goods I value to the free-rider problem but they are unwilling to subject the public goods they value to the free-rider problem. Of course, the liberal cannot say the same thing about anarcho-capitalists. Anarcho-capitalists are willing to subject all public goods to the free-rider problem. 

It's perfectly fine to have a strict definition of a public good...but it's important to acknowledge that we live in a democracy and most of society has a broad definition of a public good. Promoting a narrow definition of public goods does absolutely nothing to address society's concerns that the public goods they value will be adversely affected by the free-rider problem.

While it's certainly easy to be critical of "mind reading" as a potential solution, at least it acknowledges the political reality of the situation...unlike most of the comments. Here's the most important part of the Caltech press release...

“But this result assumed that the group's leadership does not have direct information about people's valuations"

It's obvious that people will lie if undervaluing a public good will result in less of their money being taken. But if you take their money first...they would have absolutely no incentive to lie about which public goods their money should be used to support.  Pragmatarianism acknowledges that taxes are necessary to deal with free-rider problem but ensures that people do not financially support goods that they do not value.

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

Political Ideology Diagrams

Here are a few diagrams I created to help illustrate that tenets can be used to help define where one political ideology ends and another political ideology begins.

The first political ideology Venn diagram depicts shared tenets while the second and third bell curve, public goods spectrum diagrams depict the scope of government.

The scope of government* should be determined by allowing taxpayers to directly allocate their individual taxes among the various government organizations.  For example, at anytime throughout the year you could visit the Environmental Protection Agency website and directly submit a tax payment.  This is known as pragmatarianism and/or tax choice.

Liberals believe that the government should do a lot more (have a broader scope) while conservatives and libertarians believe that the government should do a lot less (have a narrower scope).  In a tax choice system, if the Red Cross is more effective and efficient than FEMA then people who value disaster relief might not allocate any of their taxes to FEMA. This would narrow the scope of government.  Conversely, because private healthcare is so expensive perhaps more and more taxpayers might allocate their taxes to public healthcare.  The amount of money that public healthcare received would determine what percentage of the population qualified for coverage.  This would broaden the scope of government.  Allowing for a division of labor between taxpayers would reveal the proper scope of government.

One significant problem with the current system is that without allowing taxpayers to consider the opportunity costs of their taxes then there's no way for the government to know how to prioritize spending.  Somebody can say that they value defense, public healthcare, infrastructure, etc but the only way to accurately determine exactly how much they truly value infrastructure is by giving them the freedom to choose how much defense and public healthcare they would be willing to forgo in order to pay for more infrastructure.  Tax choice allows taxpayers to reveal their preferences which is the only way that public funds can be efficiently distributed among the various government organizations.

Pragmatarianism also solves the problem of government inefficiency.  Organizations in the private sector are forced to operate efficiently or they either lose customers (in the case of businesses) or they lose donors (in the case of non-profits).  Government organizations currently receive the same amount of money irrespective of how well they use it.  Without a strong incentive to operate efficiently they have become extremely inefficient.  With pragmatarianism, taxpayers would not willingly give their taxes to a government organization that would just waste their money.

*For a highly entertaining yet very informative historical perspective on the scope of government please see Herbert Spencer's comment at the end of my post on Absurdity-Spotting.

Here is the political ideology Venn diagram.  This diagram helps illustrate that libertarian socialism can more accurately be thought of as anarcho-socialism.


Here is the public goods spectrum / scope of government bell curve diagram.  On the far left the government would provide all the goods (socialism) and on the far right the market would provide all the goods (anarcho-capitalism).  As I mentioned above, allowing for a division of labor between taxpayers would reveal the ideal division of labor between the public and private sectors.  



Here is the same public goods spectrum / scope of government bell curve diagram.  The difference is that it depicts the liberal spectrum.  



Thanks to karmaisking for his suggestion to include control of money/banks on the diagrams!