Sunday, October 23, 2011

Is the Tax Allocation Disparity Divine or Delusional?

Apparently, then, the legislators and the organizers have received from Heaven an intelligence and virtue that place them beyond and above mankind; if so, let them show their titles to this superiority. - Frédéric Bastiat, The Law  (1850)
Too much fun.  It's kind of really dawning on me just how many people implicitly trust the allocation decisions of congress.  Their trust is completely irrational...and nearly universal in scope.  It's nearly universal in scope because it's fundamentally primitive stuff that's been etched into our collective psyche.

Primitive cultures would sacrifice animals to deities and pray for favorable outcomes.  Sacrifice is basically the act of giving up something that you would rather keep.  By giving to a deity people entered into a type of supernatural quid pro quo arrangement.  It shouldn't take much of a stretch to understand that taxes are nothing more than the modern day expression of ritualistic sacrifice.

Since the beginning of recorded history the line between rulers and gods has been blurred...but as rulers became more "rational" they recognized that they could accomplish more with gold rather than with blood tributes.

Around 2000 years ago Jesus said to "Render unto Caesar the things which are Caesar’s, and unto God the things that are God’s".  Trust Caesar with your taxes just like you trust God with your tithe.  Caesar will spend your taxes as wisely as god will spend your tithe.  Don't even try and second guess  the outcomes...Caesar and god both move in mysterious ways.  Trusting in god or Caesar requires faith.  Faith is of course the "... substance of things hoped for, the evidence of things not seen."  (Hebrews 11:1)

It wasn't until around the 1200s that the Magna Carta was signed.  The Magna Carta directly limited the power of kings.  Then 600 years passed before Herbert Spencer wrote...
"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...(1884)
People have obviously projected their expectations of divinity onto congress.  We can see this because people implicitly trust that congress's tax allocation decisions will be "divinely superior" to their own collective tax allocation decisions.  Taxpayers have more faith in congress than they do in the invisible hand...despite the existence of overwhelming evidence that planners fail at efficiently allocating resources.

On one hand we could follow a market approach where the funding for a government organization (GO) would be directly determined by taxpayers.  This would result in a perfectly efficient allocation of public goods.  On the other hand we could follow a planned approach where funding for a GO would be directly determined by congress.  This would result in a perfectly "moral" or "divinely inspired" allocation of public goods.

The market approach to public goods, aka pragmatarianism, would result in the best possible use of limited resources...while the planned approach relies on "divine intervention" and statistics to determine a "better than the best" possible use of limited resources.  We're supposed to have a separation of church and state but maybe each congressperson offers a silent prayer before they decide how to allocate taxes.

With the market approach...perhaps society would only allocate $5 billion dollars to the war on drugs...which would accurately reflect exactly how much society valued the war on drugs...relative to other public goods.  The current planned approach allocates $15 billion to the war on drugs.  We can think of this disparity between the two allocations as a "divine disparity".  It certainly requires copious amounts of faith to trust that this "divine disparity" will produce outcomes that are more favorable than any we could ever hope to imagine...or ever hope to explain.

Personally I grew up in a fairly religious family.  We regularly read the bible...we attended church once a week and we always prayed before meals.  We would even pray before we cut open a watermelon.  My grandfather and I were huge fans of watermelon (as in Ode to the Watermelon by Pablo Neruda) so it kind of made some sense that we prayed before cutting open the watermelon.  Our prayers always started with expressing gratitude and ended with humble requests for some divine intervention that we might be particularly blessed from partaking in the watermelon.

My grandfather was quite eloquent at indirectly asking that the watermelon be a good one but I always felt awkward and self-conscious at asking that god divinely intervene to ensure that our watermelon was a good one.  It seemed so it would be impossible to even discern whether a minor miracle had actually taken place.  My faith was never that strong.

When I was very young I never doubted the authenticity of any of the fantastic stories in the bible...but as far back as I can remember I was always more interested in reading the Zoobook magazines that my mother ordered for me as well as the National Geographic magazines that she ordered for the both of us.

There were so many neat and unusual animals and insects that I'd never even heard was extremely fascinating and enjoyable to learn about new ones.  Not exactly sure when I first ran across the theory of evolution...but I vaguely remember seeing the extinct prehistoric ancestors of present day animals in the Zoobooks magazines.  Perhaps when I was 10 or 11 I started to realize that the evidence for evolution easily surpassed the evidence for religion.

By the time I hit my teens I was pretty much an atheist but still read the bible with my family and attended church when I had to.  And when it was my turn to pray over the watermelon...I self-consciously prayed that the watermelon would be a good one...all the while appreciating the absurdity of doing so.

It's been years now since I read the bible with my family but I still remember quite a few of the stories.  Recently I've been revisiting some of these bible stories with renewed interest in order to try and better understand how ritualistic sacrifice has evolved into taxes.

When Adam and Eve were in the Garden of Eden they were not required to offer up any sacrifices to god.  But then Eve ate from the Tree of the Knowledge of Good and Evil and they were expelled from the garden.

Perhaps somewhat incidentally...Erich Fromm offered a really interesting perspective on this story.  His thoughts were that when Eve ate from the tree of the knowledge of good and evil it represented when humanity first developed conscious self-awareness.  Adam and Eve became aware that they were naked and were then expelled from the garden...which represented being alienated from a harmonious coexistence with nature.

Maybe...perhaps Eve's sin (and the first sin in the world) was for her to think for herself...which meant to question the rules of god.  After Adam and Eve were expelled from the garden it then became necessary for them to offer regular sacrifices to god.  It was the only way that they could understand and attempt to change the harsh realities of the natural world.

Not quite sure if Cain and Abel's sacrifice was the first to be mentioned in the bible...but Cain offered fruits and vegetables while Abel offered a lamb.  For some reason god favored Abel's offering over Cain's offering.  Perhaps this was because Abel had some of that "divinity which doth hedge a king".  If so, then it was divine inspiration... facilitated by a strong connection with god... which led him to allocate a lamb to god rather than selecting fruits and vegetables as his brother had done.  The more you know somebody the more likely it will be that you'll pick an appropriate gift for them.

Google'd a bit to try and find other possible explanations for god rejecting Cain's sacrifice and found this passage somewhat useful in understanding the dynamic between god and his subjects...
We must come to grips with one thing: God, as Creator, is sovereign over His creation. While there are proximate reasons for God’s decrees, what ultimately makes “right” right and “wrong” wrong? God’s sovereign choice. This does not mean God is capricious or arbitrary; God is always reasonable because He is the creator of reason. If God’s actions seem to conflict with or transcend man’s sense of “reason,” that doesn’t mean God is wrong; it means His thoughts are not our thoughts, and His ways are not our ways (Isaiah 55:8). He respects one offering and rejects another, ultimately, for His own reasons and pleasure—and isn’t that the Creator’s prerogative? Again, this isn’t to say He is arbitrary; His Word gives us all the knowledge of Him and the reasoning we need to understand and obey.  - Why Didn’t God Respect Cain’s Offering?
Does this remind you of anything?  Hopefully a few of you were reminded of Adam Smith's "duties of the sovereign".

The next biblical story of sacrifice which comes to mind is that of Abraham.  His willingness to sacrifice his son Issac demonstrated that he implicitly trusted that the outcome would be favorable in ways that he couldn't even begin to fathom.  Abraham had incredible faith.  His story foretold how god would send his son Jesus down to earth to be sacrificed for all of our sins.

The story of Elijah versus the prophets of Baal, like the story of Cain and Abel, also concerned a sacrificial competition of sorts.  Unlike with Cain and Abel though, the sacrifices of Elijah and the prophets of Baal were exactly alike but were offered to completely different gods.   What's also different in this story is that there was a desired  outcome which was established early in the end to a severe famine.  The prophets of Baal were unable to solicit any response from their gods even after they cut themselves and mixed their blood on their alter.  When it was Elijah's turn his god clearly accepted his offering...rain immediately followed...the Israelites' trust in god was reestablished....and all the prophets of Baal were quickly killed.

That cycle of faith being lost and then reestablished can be seen today in how voters alternatively lose and then reestablish faith in the Democratic and Republican Parties.  Primitive societies switched deities in order to try and identify which deity offered the best possible return on their sacrifices just like voters elect different parties in order to try and discover which party offers the best possible return on their taxes.  This return on investment (sacrifice/taxes) can also be thought of as a "blessing".

The problem is that congress adds absolutely no value to the tax allocation process.  In fact, they subtract considerable value from the process by misdirecting the flow of taxes.   Anything other than the best possible use of limited public resources will produce distortions with numerous unintended negative consequences...both of an economic and social nature.

At what point in history will a tipping point be reached where there are enough voters that realize that the current "divine disparity" is actually delusional and damaging?  When will they realize that there is nothing better than the best possible use of limited public resources?   When will they accept that the only objective way of discovering the best possible use of limited public resources is to allow taxpayers to directly allocate their taxes themselves?

And Stephen Crane replies...
Tradition, thou art for suckling children,
Thou art the enlivening milk for babes;
But no meat for men is in thee.
Then --
But, alas, we all are babes.


  1. if I live between Joe and Bill who pay for police, I might free ride and not pay the police, but you are not bright enough to understand this simple paradox

    taxes prevent free riding.

  2. Xerographica,

    Your idea is to negate representative government. Why don't you move to the jungle and see how you like it there?

  3. @Anon, where did I say anything about getting rid of or reducing taxes? Please see my entry on the blind men and the scope of government.

    @mattski, why don't you just explain why you believe that the public goods allocation disparity is divine?