Wednesday, December 21, 2011

Lupis42's Critique of Pragmatarianism


Lupis42 offered the following really great critique on my entry...A Taxpayer Division of Labor
I've been reading a bunch of your stuff over the last couple of days, because while I wanted to like it, I keep coming back to a series of fundamental problems: 
1st - Complexity. Imagine for a moment that, in a moment of sanity, Congress passes this measure for the 2012 tax year on. Because of the way congressional accounting currently works, allocating your tax dollars would be immeasurably difficult. For example, if a farmer allocates his money to farm subsidies, effectively lowering the taxes he should have paid in, does he get a refund check? What about all those people who, through deductions and credits, would pay effectively no income tax - do they need to allocate the income tax they pay to those credits then receive it back at the end of the year? Also, how granular can they get? Can they pick and chose (for example) which military projects get backed?
At anytime throughout the year people would pay their taxes directly to the various government organizations (GOs) of their choice.  They would receive a receipt and the GO would automatically send a receipt to the IRS.  The IRS would just make sure that everybody had paid the proper amount of taxes for the previous year.

It's pretty straightforward that if the government is just wasting your taxes...then everybody would want a refund.  Kind of along the same vein...if you're a pacifist and the government is spending your money on war then...chances are good that you'd want a refund.  Now...I'm not quite sure what happens to the refund concept when people are directly responsible for funding GOs that they value.  Do we see people asking for refunds from non-profit organizations?  Would an environmentalist ask for a refund from the EPA?  Why directly allocate your taxes in the first place if you're just going to want a refund?  If somebody wanted a refund then wouldn't they just give their taxes to the IRS as normal?

The granularity issue would be between the GOs and their supporters.  Well...perhaps it is primarily an issue with the military.  My mother was very much against the war...but as I was her only child...she definitely would have wanted to allocate her taxes...and then some...to try and ensure that my unit had adequate funding to purchase kevlar plates and the such.  In this case, the military would have received funding that it wouldn't have otherwise received.  So I guess we can imagine that the families of soldiers would actively try to ensure that the units that their loved ones were in had adequate funding.

For the people who don't have family members in the military, yet still value national defense, would they be inclined to allocate taxes to the Marines rather than the Army?  Or would they just allocate their taxes to the DoD?  This is an issue that the DoD would have to try and figure out...how it could maximize revenue without compromising its effectiveness.

The military projects issue is an interesting one.  I remember liberals criticizing the government for doing absolutely nothing to stop the genocide in Darfur.  But what if we had a non-profit peace keeping force that was capable of stopping genocide and/or ethnic cleansing?  Kind of like the A-Team but more substantial.  In other words...it would have a heart, brains...and muscle.  An army of liberals.  Personally, I could see myself donating to such an organization.  What would happen if more and more people donated their money to this non-profit while less and less people allocated their taxes to the DoD?
2nd - Inequality. Right now, around 50% of the populace pays income tax, and the top 10% pays more than 40% of the incoming revenue. Economics will encourage them to divert all of it to programs that, in one way or another, directly benefit their firms (i.e. Raytheons CEO will direct money to military programs that involve Raytheon projects, Solyndra's CEO will send his money to the line item "loan to Solyndra", etc.) 
If self-interest promotes the general interest in the private sector...then why wouldn't self-interest promote the general interest in the public sector?  Why do corporations engage in philanthropy?  Is it philanthropy if a company that sells products to the Red Cross makes a donation to the Red Cross?  Does doing so guarantee that the Red Cross will continue to purchase products from that same company in the future?

Here's a passage from my very first poli-sci textbook...A Delicate Balance by Paul Light...
Roughly one out of every six Americans currently works for a private firm that receives federal contracts. Roughly two-thirds of those contracts came from the Department of Defense, which accounted for over $120 billion in 1997, and roughly two-thirds of those defense dollars went to just five firms: Lockheed Martin (airplanes), McDonnel Douglas (airplanes), Northrup Grumann (airplanes), General Motors (tanks and trucks), and Ratheon (weapons systems). 
The textbook was published in 1999...so...feel free to come up with updated stats if you feel they are pertinent.  The point is...who would complain if Lockheed Martin or McDonnel Douglas or Northrup Grumann or General Motors or Ratheon allocated their taxes to the DoD?  Surely none of their employees would complain.  Surely none of the people who valued national defense would complain...well...unless they believed that those corporations were somehow overcharging the DoD.

How would it help the environmentalists to complain that the DoD was "overfunded"?  How would criticizing the DoD help people understand the value and importance of the EPA?  The same concept applies to people who value public education, public healthcare, infrastructure, etc.

What about tax repatriation holidays?  If it would be economically sound for corporations to allocate their taxes to the GOs that they directly benefit from...then what incentives would they have to hide their profits overseas?
3rd - Choice. Whoever (Congresscritters, I assume) is responsible for determining what line items are available for taxpayer choice, and how they are worded will have a huge amount of power. Previously, the way a Congresscritter got a pork project funded was to agree to support another Congresscritter's project. Now all they have to do is write good copy.
Right now you have 0% control over how your taxes are spent.  We'll always disagree with how other people spend their taxes...but at the end of the day we'll have to recognize that other people will disagree with how we spend our taxes.  This is the essence of political tolerance.  Clearly though you can't be the only one to define something as a "public good".  Sure..I could make the argument that it's a "public good" for me to take a vacation to Madagascar...but the positive externalities are negligible.  For the most part I've said that voters would determine the functions of government and taxpayers would determine which functions to fund.
4th - Law Enforcement. Theoretically, the public can now defund unacceptable forms of law enforcement (e.g. the war on drugs), but this does nothing for the actual criminality of the laws on the books. This will lead to highly selective enforcement, which is even worse than consistent enforcement because it allows corrupt, bigoted, or agenda driven targeting of people. Even more problematically, if the taxpayers were to defund prisons while funding enforcement, for example, it would be impossible for even fair-minded, honest, diligent enforcement officers to actually apply the law. If some programs are made contingent on 'end-to-end' funding, then we're back at problem 3, but with more of a vengeance.
When I was pulled over for my speeding ticket...(see my post on the Opportunity Costs of Public Transportation) I asked the officer if it was a coincidence that I always drive the same speed in my old Toyota Tundra...and have had cops right behind me several times...but I end up getting a ticket the one time I borrowed my friend's Mercedes.  Heh...like the cop would admit that he pulled me over because I was driving a Mercedes.  I also asked him why he didn't give everybody who was driving over the speed limit a ticket.  He literally passed people who were breaking the law to give me a ticket.  Here in Los Angeles nearly everybody drives over 65 mph on the freeway.

If people want to pass a law...then they should have to put their money where their mouths are.  It's not enough for people to say that something should be illegal...they need to understand that if they want something to be illegal...then they will be the ones responsible for ensuring that the law is enforced.  As I mentioned in my post...it's a sign of maturity to accept responsibility for one's decisions.  If people aren't mature enough to accept responsibility for the laws that they voted for...then it's not a bad thing if those laws are not properly enforced.

This of course ties into the opportunity cost concept.  If you want people to purchase your product...then it's your responsibility to convince them to forgo the other products that they value.  If you want other people to pay for your law to be enforced...then you should have to convince them to forgo the other public goods that they value.  This is how we ensure the best possible use of scarce resources.

What you're saying in essence is that...the current method of dealing with crime is the best method of dealing with crime.  How could anybody truly know that?  What you're doing is blocking heterogeneous approaches to crime.  Personally, I believe that an ounce of prevention is worth two of cure.  My grandfather was always fond of saying that idle minds are the devil's workshop.  Or something like that.  If I only have a limited amount of money to spend on the problem of crime...which is certainly the case...then I'd spend it on sponsoring activities that offer at-risk youth with more choices besides joining a gang.  Is this the best approach?  Again, I can't know that.  What I do know is that the only way we can truly discover the best approach is if we allow people to support multiple approaches.

Is there a demand to solve the problem of crime?  Yes.  Should organizations have to compete for the  resources to solve this problem?  Yes.
The rest aren't a per se objection to Pragmatarianism wholesale, because they could be applied to our current systems too, but they are relevant when considering it as an alternative to Libertarianism. 
5th - Rate Setting. There's still no good feedback mechanism on what the size of government should be, just it's role. Fundamentally, your objection to Liberals and Libertarians is that each claims to know the optimal size of government, which you want to let the market decide, but unless you propose to allow taxpayers to allocate up to 100% of their taxes to their own tax rebates, Pragmatarianism offers no alternative but to elect either Liberals or Libertarians to set the tax rates.
If I'm an environmentalist...and I want people to allocate more of their taxes to the EPA...does raising the tax rate mean that non-environmentalists will somehow become environmentalists?  Probably not...it just means that I end up paying more of my own money to the EPA.  If I want other people to allocate more of their taxes to the EPA then I have to convince them of the value of the EPA.
6th - Rights. There's nothing in here that addresses the ability of, say, congress interfere in other ways, e.g. criminilaizing activities that have no non-consenting victim (drug use, gambling, prostitution, home-brewing, prayer, free speech, etc. 
True.  Coming from libertarianism...I have my own views regarding rights...and those views won't change if a pragmatarian system was implemented.  Pragmatarianism is all about KISS....Keep it Simple Stupid.  By keeping it completely nonpartisan...it helps to focus the debate.
Ultimately, I like the general idea and it makes a lot of sense in conjunction with a smaller, more limited government, but I have a hard time seeing it work without a much more Libertarian state than we have now.
As a web programmer I spend a lot of time looking for bugs in the code.  It's really frustrating when something should work...but it's just not working.  I'm always like...hmmm...why isn't this working?   To find the bug in the code I have to test each portion of the code separately.  This allows me to narrow down the search.

If you take a look on my page on libertarianism you'll see I created a timeline of prominent libertarians' perspectives on the scope of government.  All those guys were/are brilliant...so why aren't their arguments working?

Pragmatarianism is a method of debugging libertarianism.  It removes the debate over the tax rate and it removes the debate over whether something is a genuine "public good" or not.  The only thing remaining is whether congress can allocate public goods more efficiently than taxpayers can.  It is my firm opinion that this is where the bug is located.

Can resources truly be efficiently allocated by proxy?  Well...parents purchase things for their kids.  That's one or two adults representing the interests of one or two kids.  Well...what about Christmas?  Santa Claus is responsible for giving gifts to all the kids of the world...right?  Well...what about Jesus?  Jesus died for all of our sins...right?  Well...what about congress?  Can 538 congresspeople truly represent the public interests of 300,000,000 people?  Well...as I argued in my post on the divine disparity...it's certainly progress in comparison to having one king represent the public interests of all his subjects.

Kids want to believe in Santa Claus?  Fine...no problem.  People want to believe in God?  Again...no problem.  People want to believe in congress?  Sure...no problem...as long as they respect my beliefs and allow me to directly allocate my taxes.

In other words...the bug in the political system is intolerance.  Why haven't more people come to the same conclusion?  As I argued in my post on the The Devil's Advocate for Public Goods...we think we are all "civilized" aka "all grown up" but we're really not...we're always in the process of growing up.
When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things. - 1 Corinthians 13:11
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. - Stephen Crane
It might be a mistake to implement pragmatarianism...and it might be a mistake not to implement pragmatarianism...but I'm pretty sure it's a mistake not to seriously consider the idea.  So... kudos for seriously considering the idea!

Monday, December 12, 2011

A Taxpayer Division of Labor

My drill sergeants at Ft. Benning Georgia told me that I was a lucky bastard for being assigned to an infantry unit down in Panama.  Their reasoning had nothing to do with the jungle...but that's what quickly wrapped its tendrils around my heart.  Heh....yeah, I can admit that I fell in love with the jungle.

A thousand shades of green, a countless array of intriguing chirps and buzzes, a wonderfully pungent aroma of earth mixed with rotting fruit...and so many fascinating creatures.  The jungle isn't for everybody though.  Certainly none of my buddies loved the jungle as much as I did.

The jungle was full of surprises...many were quite pleasant.  I remember walking past a spectacular display of orchids.  When I slowed slowed down and pointed them out to my friends...they just rolled their eyes, questioned my sexual orientation...and told me to keep up.  Another time while laying in the prone position I observed an amazingly brilliant golden beetle scurrying over leaf litter.  Then there were the Morpho butterflies with wings that were shocking blue on the inside and dull grey on the outside...when they fluttered around they looked like small blue neon signs blinking on and off here and there in the cathedral like gloom of a dense canopy.

In terms of less than pleasant surprises...Cebolla and I were doing some land navigation exercises when we decided to take a quick break and "beat the heat" by drinking some warm canteen flavored water.   Cebolla was my Mexican roommate from Idaho.  The "Mexican Mafia" (the Hispanic guys in our unit...mainly from Los Angeles) liked to joke that the "coyote" that brought Cebolla's family from Mexico got lost and ended up in Idaho.  So they gave him the nickname "Mr. Potato Head"...but Cebolla didn't mind though...he was the most mellow/chill guy ever.  We had barely gotten our canteens out when Mr. Potato Head started jumping up and down screaming that he was being stung.  I rushed over and discovered that he had unknowingly decided to stand right on top of a colony of .50-caliber ants.  We referred to them as ".50-caliber ants" for two reasons...1. they were very large and 2. their stings were said to be as painful as being shot.

The ants were swarming all over Cebolla's legs and making loud angry clicking noises.  We quickly moved away from the colony but Cebolla was shouting that the ants were in his boots.  His "ants in the pants" dance was so frantic that, as I was trying to give him a hand with his boots, he accidentally "buttstroked" me in the head with his rifle.  That knocked enough sense into me to realize that the ants were too large to actually get inside his boots...they'd been stinging him through the thick leather.  Ouch.  In Cebolla's defense though...unlike most ant colonies...the .50-caliber ant colony did not display any of the obvious signs of a typical ant colony.

It was also a very unpleasant surprise to be walking through the jungle and suddenly feeling strong filaments of spider web wrap around your body from head to toe.  This would slow you down literally as much as the ubiquitous "wait-a-minute" vines would.  It wasn't the only explanation why a macho guy would suddenly start jumping around strip searching himself in the middle of the jungle...shouting "Ack!!  Where is it?!  Ack!! Get it off me!"...but it would be a pretty good guess.

In other cases...the surprises came to you.  There I was sitting on a "safe" patch of jungle floor, enjoying a delicious chili mac MRE when suddenly, out of nowhere, a snake quickly crawled over my legs and disappeared into the grass before I even had time to react.  Even in the barracks you weren't necessarily safe from jungle surprises.  Walking back from a shower, I rounded the corner in the hallway and had to jump to just barely avoid the striking fangs from a 10ft boa constrictor.  The guys had put it there as a practical joke...hah...hah.  So of course I joined them and waited for the next guy to round the corner.

Oh man, we had shenanigans for days...but let me try and figure out what my point was.  Well...when you're walking in the jungle...you can't look straight ahead and down at the same time.  When you look down you forgo/sacrifice the ability to look straight ahead.  This is the opportunity cost concept.  The opportunity cost of looking down to try and avoid colonies of stinging ants and poisonous snakes (bushmasters, fur-de-lances) is that you increase the likelihood that you'll walk straight into the gigantic web of a spider that regularly captures and eats birds.  Well...that and you'll end up walking in circles if you don't look up often enough.

This ties into the basic infantry concept concerning patrolling: establishing a perimeter.  Basically we'd form a "wagon wheel"...and each person would be responsible for monitoring their own sector of fire.  If we could somehow "predict" exactly which direction the enemy might come from then there would have been no need to try and provide 360 degrees of coverage.

One word that I frequently hear in response to pragmatarianism is "disaster".  Three things though...disasters 1. already occur all around us 2. have the potential to come from anywhere and 3. are relative.

Is failing to conserve the jungle a disaster?  From my perspective it is.  It seems reasonable to say that the jungle has the potential to yield extremely beneficial and valuable surprises for humanity.  Closer to home...my girlfriend works for a non-profit organization.  She provides therapy for abused children from low-income families.  Needless to say I don't even want to hear her disaster stories anymore.  Then there's my doctor friend who works with the Center of Disease Control...he's got some of the scariest "potential" disaster stories.  Disasters can come from any direction at any time.

Even though we were all about Murphy's law in the military...when we formed perimeters in the jungles of Panama...we never monitored the sector directly above us.  It just seemed highly unlikely that ninjas...or the alien from the movie "Predator"...or asteroids...would present credible threats.  Although...the howler monkeys did throw their poop at us...and several guys were hospitalized after being attacked by killer bees.

Did you ever read Tom Clancy's book..."A Clear and Present Danger"?  It's been so long since I've read it that I can't even even remember what it was about.  That's ok though because the title says it all.  Clearly we all realize and appreciate that one person should not be responsible for shouldering the entire burden of determining and acting on "clear and present dangers"...right?  To drive that point home here is the quote that I shared in my entry on the Opportunity Costs of War...
However well balanced the general pattern of a nation's life ought to be, there must at particular times be certain disturbances of the balance at the expense of other less vital tasks. If we do not succeed in bringing the German army as rapidly as possible to the rank of premier army in the world...then Germany will be lost! - Adolf Hitler, 1936
That's why one person should never have sole control of the power of the purse.  But what if two people share the power of the purse...or three people...or 100 people?  Why not let each and every taxpayer have sole control over the power of their own purse?  Why not create a taxpayer division of labor?

When disasters can come from so many different possible directions...wouldn't you feel safer if America established a perimeter that consisted of millions and millions of concerned taxpayers?  A taxpayer division of labor would allow us to hedge our bets...it would allow groups of taxpayers to be responsible for monitoring the sectors that they cared about the most.

It's easy to imagine how the system would work because we can see the exact same type of division of labor in the non-profit sector.  It wouldn't make any sense to force donors to PETA and donors to the NRA to pool their donations and elect representatives to split the pool between the two organizations...so why does it make sense for taxpayers that care about the environment and taxpayers that care about national defense to pool their taxes and elect representatives to split the pool between the EPA and the DoD?  How does gridlock benefit anybody?  Why don't we recognize that hyperpartisan obstructionism is a byproduct of the structure itself?  Is it so hard for us to understand why people see taxes in such a negative light?  How much more willing would people be to pay more taxes if they had the freedom to directly use their taxes to support the public goods that they cared about the most?

Don't get me wrong...I understand how the current system itself represents a division of labor.  Most people don't worry about the provision of public goods because they've outsourced this responsibility to their "personal shoppers"...congresspeople.  I'm not saying that we should get rid of congress...I'm saying that anybody that does happen to worry about the provision of public goods should have the freedom to bypass congress and directly allocate their taxes themselves.

It's important to understand that the public sector is the sum of everybody's pet projects.  You wouldn't want to pay for somebody else's pet projects...yet for some reason you're ok with other people being forced to pay for your own pet projects.  When are we going to learn to respect, recognize or at least tolerate other people's values?  If you want other people to pay for your project...then you should have to convince them of the value of your project.  If people don't allocate enough of their taxes to your project to keep it going...then try fundraising.  With standard fundraising practices non-profits receive $5 for every $1 they spend...well...assuming that there is a demand for the public good in the first place.

The thing is...it's a "Fatal Conceit" for a small group of people to assume that they have enough information to make resource allocation decisions for the entire country.  The irony is that the Fatal Conceit concept, which was coined by the economist Friedrich Hayek, does not just apply to liberals…it applies to libertarians as well. We’re all just blind men arguing over the scope of government. The scope of government is so complex that it can only be accurately determined by allowing each and every taxpayer to use their taxes to highlight private sector supply failures.

Yet...parents make economic decisions for their kids...and knowledge is relative...right?  Incidentally...did any of you just think of Voltaire's Micromegas?  If it's reasonable for parents to make economic decisions for their children...then isn't it reasonable for knowledgeable adults to make economic decisions for all the ignorant adults?

To help understand the issue I'm currently watching that truTV series...World's Dumbest People.  Generally the only thing I watch on TV is C-Span and the Discovery Channel.  No really...I swear!  Heh...that's not true.  The episode I'm watching right now is the World's Dumbest Pranksters.  Honestly some of the pranks are really pretty funny.  Why are pranks so funny?

A long time ago I read one of Plato's works...maybe the Apology or something or other.  In Plato's book Socrates was trying to figure stuff out.  So he sought out the most knowledgeable people in society and engaged them in discourse.  In the process of trying to learn from these experts though...Socrates ended up discovering and revealing just how little they actually knew, "...it seems that I am wiser than he is to this small extent, that I do not think I know what I do not know."  Although the experts did not find the experience to be enjoyable...many other people did...and Socrates quickly gained a following.

Did you ever watch Ashton Kutcher's show Punk'd?  Ashton Kutcher publicly "punk'ing" celebrities was the modern day relative equivalent of Socrates publicly "punk'ing" intellectuals.  Imagine if we had a TV show called "The Pretense of Knowledge" that consisted of a modern day Socrates revealing to America just how little our public officials actually know.

You'd be able to flip channels back and forth between "The Pretense of Knowledge" and "World's Dumbest People".  The juxtapose would beg the question...what are the information disparities between the general public...taxpayers....and congress?  The trick is understanding that when it comes to the efficient allocation of resources...we're not looking at information averages...we're looking at information totals.  If we added up all the information held by millions and millions of taxpayers...how would this compare to the sum of information held by 538 congresspeople?

When trying to figure out how to convey this idea I remembered a photograph that I took while stationed in Afghanistan (see my post on Anarcho-capitalism vs Civilization).  It's of an American solider on one side of a make-shift seesaw with some Afghan kids on the other side.  Even though the average American solider weighs more than the average Afghan kid...the cumulative weight of 5 kids is greater than the weight of one solider.  

















Even though the average congressperson might have more information than the average taxpayer...the cumulative information held by 150 million taxpayers far exceeds the cumulative information held by 538 congresspeople.  When it comes to the efficient allocation of public goods...we need to consider sums...not averages.  It's interesting to consider though just how many average taxpayers it would take to equal the amount of information held by the average congressperson.

The other day on C-Span I watched a portion of a town hall meeting that was held at the University of Maryland.  A congressman, Steny Hoyer, was asked the following question by a lady holding her crying baby (starts at 44:30)...



How awkward was that?  Well...it wasn't as awkward as an earlier question asked by a fan of LaRouche.  Of course, that's exactly how everybody would have perceived me if I had been there to ask my question...public goods allocation disparity question.  In any case though..the lady's question provides a decent real life example of the information disparity concept.  We all have some information but nobody has all the information.  Out of curiosity I tried looking up the bill in question and ended up finding the lady who asked the question...Liz Reitzig.  Well...at least I think that's her.

The point isn't to figure out whether the congressman is correct that the FDA is awesome or whether Reitzig is correct that it's absurd that the "Feds sting Amish farmers".  The point is to consider the information disparity between taxpayers and congress.  How does the information disparity impact the public goods allocation disparity?  Is this disparity divine or delusional?  Should Reitzig have the right to boycott the FDA?  Should pacifists have the right to boycott the DoD?

But it's not just about the information that we have...it's also about whether our information is accurate.  Here's the article by Arnold Kling that inspired me to write this entry...The Political Implications of Ignoring Our Own Ignorance.  In his article Kling references the book by Daniel Kahneman...Thinking Fast and Slow.  Both Kahneman and Kling agree that "our maps are highly inaccurate"...what's interesting is that they disagree on the political implications.  This provides a perfect example of how two very intelligent people can consider the same exact thing but come to opposite conclusions (for more on this check out my reply to Jason Brennan's Ethics of Voting).  But how strange would it have been if either of them had changed their ideological positions as a result of the "new" information?  For a third perspective on the same book here's David Friedman's blog entry...Thinking Fast and Slow.

From Kling's article I Google'd "Jeffrey Friedman radical ignorance".  That's when I fell down the rabbit hole of my own ignorance.  I mean...I learned just how little I knew about ignorance.  Or...at least...that's the feeling I got.  Incidentally...I just looked up the surname "Friedman" and discovered that "fried" is the German word for "peace".

It actually wasn't too long ago that I'd discovered Friedman's work.  In my entry where I offer "proof" that pragmatarianism is the third solution...I had fun juxtaposing his critique of libertarianism with Mises' dogmatic assertion that there was no third solution.  The third solution is for people to understand how pragmatism offers an alternative to dogmatism.  Here's a bit from Friedman's essay critiquing libertarianism..."Although there is a handful of exceptions, most libertarian empirical work displays an obvious impatience to reach a foreordained antigovernment conclusion."  I added the link...it's to my response to Kling's brief response to pragmatarianism.  For another pragmatic critique of libertarianism see David Brin's Essences, Orcs and Civilization: The Case for a Cheerful Libertarianism.  As you can tell from the title...Brin's critique is a bit more accessible than Friedman's critique.

The first search result for "Jeffrey Friedman radical ignorance" was this blog entry by Roger Koppl...Politics in One Lesson.  Koppl's one lesson was that politicians tend to signal goodness rather than actually doing anything good.  In the comments he uses this phrase, "concentrating benefits and dispersing costs".  If that phrase doesn't quite make sense then here's a two minute video that helps explain the concept...



Koppl's lesson struck me as pretty reasonable...but it's not the ONE lesson that I would have selected.  My selection for the ONE political/economic lesson would have to be Buddha's story of the blind men touching different parts of an elephant.

The reason that Koppl's blog entry popped up as the number one search result is because Friedman commented on his entry.  They went back and forth several times trying to clarify/understand their positions.  Koppl had a bit of trouble figuring out Friedman's criticism...so I don't feel too bad about being in the same boat as Koppl.  But if I had to venture a guess I'd say that Friedman's criticism was the same as Buddha's...that we are all just blind men arguing over the scope of government...but I could be wrong.

In the process of trying to better understand Friedman's argument I ended up at Peter Boettke's blog entry...which reviewed Friedman's book...Ignorance and the Financial Crisis.  The comments are all worth reading...Friedman offers some comments as well.  Many of the the comments offered quite a few leads to follow...and I followed them deeper and deeper down the rabbit hole.

Along the way I picked up several "souvenirs"/quotes...most can stand on their own but there are a couple that I wanted to relate to pragmatarianism.  The first "souvenir" is Jeffrey Friedman's position on how resources are efficiently allocated...and the second "souvenir" is Peter Boettke's position on the Paradox of Thrift.  Here's Friedman's passage...
This epistemic defense of the for-profit and nonprofit sectors requires us to accept that there is nothing like a real market that will weed out failed nonprofits or weed in successful ones.  But we needn't idealize nonprofits in order to see that they may be better than governments - because successes may be hiding amid the thousand points of light, while the reliance of state bureaucracies on social-scientific "expertise" is a virtual guarantee of failure.  Still, and without idealizing for-profits, it seems to me that the situation in the nonprofit world is worse than that in markets, where through profit and loss, firms that are successful in satisfying the test of consumer experimentation gain control over more resources, while the unsuccessful ones lose resources and go bankrupt.  This isn't to say that the nonprofit sector shouldn't be defended.  But I think the defense must be epistemically minimalist if it is to be consistent with a like defense of capitalism - and with Husock's identification of the main problem plaguing human endeavor in all fields: the problem of knowing what works. - Jeffrey FriedmanThere is No Substitute for Profit and Loss
In a pragmatarian system...let's say that you wanted to "purchase" some security.  You would have the option of purchasing this good from any combination of the three sectors...1. the for-profit sector 2.  the non-profit sector and 3. the public sector.  In terms of the for-profit sector you could purchase a gun...hire a body guard...take self-defense classes...etc.  In terms of the non-profit sector you could donate money to your local neighborhood watch...or donate to after-school programs targeting at-risk youth...because...an ounce of prevention is worth two of cure.  In terms of the public sector you could allocate a portion of your taxes to the police...or jails...or the courts.

The idea is to promote "heterogeneous activity"...which is a term I picked up from the comments on Peter Boettke's blog entry reviewing Friedman's book...Ignorance and the Financial Crisis.  I'm fairly certain that heterogeneous activity is the same thing as hedging our bets.  In other words...we shouldn't put all our eggs in one basket.  If you wanted to "purchase" education you could spend money on a private school...and/or donate money to Khan Academy...and/or donate money to public schools via DonorsChoose.org...and/or allocate your taxes to specific public schools...and/or allocate your taxes to the Department of Education.

As Jeffrey Friedman said...it's all about how organizations gain or lose control of resources.  In other words...it's all about the efficient allocation of scarce resources.  Which of course boils down to opportunity costs and partial knowledge.  Whether education belongs in the for-profit sector and/or in the non-profit sector and/or in the public sector should be determined by consumers who have the freedom to spend their money based on their interpretation of the "facts".  Here's a "souvenir" from Tedra Osell's Crooked Timber blog entry on Schooling Anonymous Kids
Funnily enough, that concern was founded on an expectation that charter schools, freed from some of the regulations that public schools have to adhere to, would, in fact, manage to offer better educations. It turns out that that’s not actually the case, though; by now we all know that the results comparing charters to public schools are mixed; there is no clear advantage to charter schools. My guess is that founding schools based on half-baked theories and ideologically driven philosophies, or as for-profit institutions, rather than oh, say, based on actual evidence about what works in education, isn’t the way to go.
It's a Fatal Conceit for anybody to believe that they have a monopoly on "actual" evidence...Crooked Timber Liberals - Monopolizing the Facts.  It's great...awesome...wonderful...even fun to dispute the "actual" evidence...but at the end of the day it should be up to consumers to decide which organizations receive their money.  If somebody's evidence is truly "actual" then taxpayer's tax allocation decisions would shift to reflect the indisputably of the evidence.  At one time everybody knew that the world was flat...and now everybody knows that the world is round.  What do we all "know" today that could turn out to be patently false tomorrow?

Onto the second "sourvinir" that I wanted to comment on...Peter Boettke's, et. al., position on the Paradox of Thrift...
Stated this way, it should be clear that the overpessimistic bias of traders confronted with imperfect information is entirely rational. Imperfect information does not cause actors to behave suboptimally given the choices that confront them.  Rather, the optimal response of rational traders operating in this environment is precisely what leads to a lower rate of exchange than would have prevailed were it not for the fact that they have only imperfect information.  - Peter T. Leeson, Christopher J. Coyne, Peter J. BoettkeDoes the Market Self-Correct? Asymmetrical Adjustment and the Structure of Economic Error  
Not quite sure if the term "Paradox of Thrift" is a general reference to the idea of thrift/saving or whether it is a specific reference to section 11. "Thrift and Luxury" in Frédéric Bastiat's essay on What Is Seen and What Is Not Seen.  In any case...the Keynesian argument is that government spending is necessary to end recessions.  In a pragmatarian system though...taxpayers obviously wouldn't have the option of being "thrifty" with their taxes.  Meaning...they couldn't just put their taxes under their mattress.  So Keynes would get his spending but it would be in terms of Hayek's decentralized knowledge.  Yes...taxpayers could perhaps "pessimistically" allocate their taxes...but you'd figure that plenty of people would follow the allocation suggestions of respected public leaders...see my reply to Jeffrey Sachs and my reply to Paul Krugman.

Ok, time to wrap this up!  Last night I ate some fast food while watching a chick flick.  Sigh.  I simultaneously shortened my life span and wasted the little time I do have.  I blame my girlfriend.  Naw...I accept responsibility...because doing so is a sure sign of maturity.  Besides...you'll burn out if you don't take breaks..."The flame that burns twice as bright burns half as long"...to quote Lao Tzu and Bladerunner.  Life is all about balance.  To help balance out the chick flick I immediately watched Apocalypse Now.  What a movie.  The opening scene is of a magnificent strand of palm trees.  The first thing that popped into my head was...I bet my buddy Gene knows exactly what species of palms those are.  As the palms were totally obliterated by napalm my second thought was...taxpayers should have the freedom to consider the opportunity costs of war.

Here's the mainstream libertarian perspective on voter ignorance...
The best response to voter ignorance is to reduce the size and scope of government. When people act in the market and civil society, they have much better incentives to make well-informed decisions. When a consumer decides whether to buy a product, he knows that his choice will be decisive and thus has reason to acquire needed information and consider it rationally. - Ilya Somin,  An Inconvenient Truth
The "inconvenient truth" for libertarians is that reducing the size and scope of government to the police, the courts and national defense would still allow a small group of "radically ignorant" public officials to be in charge of funding the police, the courts and national defense.

The "inconvenient truth"  for liberals is that, to steal Obama's favorite analogy, it doesn't matter who has the keys to the "car"...the car will always end up in the ditch as long as the driver is driving under the influence of conceit.

Ron Paul and Obama are both fatally conceited for believing that their "theories" on the scope of government are anything more than theories.  The only way to accurately test their theories would be to allow taxpayers to directly allocate their taxes.  Nothing would provide more conclusive evidence than millions and millions of taxpayers directly allocating their taxes.  Everybody wants the most bang for their buck... therefore... taxpayers would not waste their taxes in the public sector paying for something that they could "purchase" in the private sector for less money.  This taxpayer division of labor would reveal the division of labor between the public and private sectors that would maximize the benefit to society as a whole.

The  "inconvenient truth"  for pragmatarians is that, given the problem of confirmation bias, neither liberals nor libertarians are very likely to acknowledge their respective "inconvenient truths".  That being said...if you feel like there's an "inconvenient truth" that I'm either avoiding or rationalizing away or just plain missing...then I highly encourage you to bring it to my attention and to the attention of others.  I take it to be "actual" truth that nobody has a monopoly on "actual" truth...but I could be wrong....given that I don't have a monopoly on "actual" truth.

In parting...here are some articles to check out...
...and a bunch of  "souvenirs" that I picked up along the way...

This division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual, consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another. - Adam SmithInquiry into the Nature and Causes of the Wealth of Nations

Descartes, by contrast, thought that all claims to knowledge should be questioned, because naturally and culturally perceived truths can be illusory. Descartes led to Hume, thence to Kant and Popper. Kant and Popper led to Hayek (Gray 1984; Clouatre 1987). Not surprisingly, then, Popper and Hayek were both keenly interested in ignorance and error, and in biological and scientific (and, in Hayek's case, economic) evolutionary processes by which ignorance can be overcome, errors corrected, and knowledge acquired. - Jeffrey FriedmanIgnorance as a Starting Point: From Modest Epistemology to Realistic Political Theory

We thus propose an epistemological theory of error that applies to all fields, including economics. According to this theory, people make genuine errors when they (a) are ignorant of relevant information (for any of the reasons just specified); (b) are misled by false information; (c) are misled by true but irrelevant information; or (d) misinterpret true and relevant information. - Anthony J. Evans, Jeffrey Friedman"Search" vs. "Browse": A Theory of Error Grounded in Radical (Not Rational) Ignorance

Beyond these effects, tax choice enables individuals to compete more effectively with moneyed interests in policy-making. The politics of tax choice are appealing as well, drawing on both libertarian and conservative themes of individual empowerment and agency, as well as the progressive belief in good government. Tax choice would resonate across a broad political spectrum, and directly engage citizens in the administration of the republic. - Cait LambertonYour Money, Your Choice

Pure libertarianism needs something to curb its extremity. That something is pragmatism. Philosophical pragmatism is an essential American development. Its animating principle is that truth is social and constructed rather than transcendent and objective. It holds that ideas prove their worth in action, and that the results of an idea are the best criteria by which to judge its merit. And since what works for me might not work for you, pragmatism advocates a strenuous openness to all perspectives. - James WalshLiberty in Troubled Times: A Libertarian Guide to Laws, Politics and Society in a Terrorized World

The problem is thus in no way solved if we can show that all the facts, if they were known to a single mind (as we hypothetically assume them to be given to the observing economist), would uniquely determine the solution; instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge. To assume all the knowledge to be given to a single mind in the same manner in which we assume it to be given to us as the explaining economists is to assume the problem away and to disregard everything that is important and significant in the real world. - Friedrich HayekThe Use of Knowledge in Society

Pragmatism is a philosophical perspective linked with the name of John Dewey and other 20-th century American philosophers.  As I tried to learn something about it, I discovered that there is an enormous literature on pragmatism that could easily fill a small library.  Luckily, in his paper Knight [2001] has taught us that the main message of the pragmatist perspective boils down to just a few guiding principles: (i) Evaluate ideas by their consequences (consequentialism); (ii) be aware that your ideas may be wrong and may fail (fallibilism); (iii) don’t be hypercritical (anti-skepticism); (iv) try out, debate, and evaluate alternatives (experimentalism). - Elmar WolfstetterA Pragmatist Approach to the Proper Scope of Government Comment

There is no need to deny that individual members of any public are ill informed or mal-adept at navigating various cognitive tasks.  After all, Dewey acknowledged much of what skeptics of his day took to be the facts of the matter.  But, in the first place, beginning with Peirce, pragmatists have seen knowledge as produced and held by communities of inquiry.  That means we should expect no single individual to either produce or possess all the knowledge or information required to address a given social, economic or political problem.  It means instead that we ought to conceive of epistemology in not just social but institutional terms.  Like Dewey, then, contemporary pragmatists remain critical of arrangements that accord too much of a role to experts or technocrats even as they simultaneously resist naively placing their faith in the capacities of the common man except, of course, insofar as those capacities are deployed under "proper conditions."  From our pragmatist perspective, then, there is little reason to characterize our argument as "psychologically unrealistic."  And there surely are grounds for responding to such complaints. - Jack Knight, James Johnson,  The Priority of Democracy: Political Consequences of Pragmatism

"Idiocracy" thus suggests what might be called an idiocratic theory: If the public is idiotic, as it surely is, then the least it can do, and the thing it must do in order to survive, is to submit to the rule of those who are its smartest and most capable members (even if the smartest are a bit dim themselves). - Mark FensterOn Idiocratic Theory: Rejoinder to Wisniewsky
*Note* This is in reference to the movie Idiocracy which starred Luke Wilson and was directed by Mike Judge...the guy responsible for Beavis and Butthead.  For some reason I think it's just the coolest that Fenster decided to write this piece.

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 BastiatThe Law

Isn't that the central basis for the libertarian creed? The notion that educated free adults can be trusted with matches... not to mention their bank accounts and votes? If the masses are intrinsically stupid -- sheep -- then the paternalists are right and no future society of maximized freedom will ever be possible.
David BrinEssences, Orcs and Civilization: The Case for a Cheerful Libertarianism

That said, Wisniewski is right to disagree with my critique of Edelman because, unlike Edelman and Wisniewski, I am not in fact an idiocrat. As lazy and stupid as the public may be, its members are not incapable of understanding at least the broad stakes of major political decisions.  In this regard consider the increased public knowledge and understanding of the nonexistence of Saddam Hussein's WMD program and ties to Al-Qaeda that have occurred over the past three years. Efforts to provide the public with better information in an effective and timely manner, whether by public or private institutions, are worthwhile, in the same way that efforts to manipulate the public by leaking or releasing false or misleading information can be quite effective. - Mark FensterOn Idiocratic Theory: Rejoinder to Wisniewsky

Thus, the ignorance of the mass public may create opportunities for libertarian forces to undermine state autonomy. In the absence of detailed policy knowledge, such agents can always pose a simple question to the uninformed voter: "Why can't the government program or agency in question be replaced by a private firm or a market mechanism?" The very allure of libertarian metaphors and argument may, I hypothesize, depend upon widespread voter ignorance of particular policy issues and the relative simplicity and conceptual "obviousness" of notions such as "freedom," "competition," "incentives," "cost-benefit analysis," and "the market." - Daniel Carpenter,  The Leaning Tower of “Pisa”: Public Ignorance, Issue Publics, and State Autonomy: Reply to DeCanio

The lower sort of people and small proprietors are good judges enough of one not very distant from them in rank or habitation; and therefore, in their parochial meetings, will probably chuse the best, or nearly the best representative: But they are wholly unfit for county-meetings, and for electing into the higher offices of the republic. Their ignorance gives the grandees an opportunity of deceiving them. - David HumeIdea of a Perfect Commonwealth 

"I have previously stated and I repeat now that the United States plans no military intervention in Cuba," said President John F. Kennedy as he planned military action in Cuba. "As president, it is my duty to the American people to report that renewed hostile actions against United States ships on the high seas in the Gulf of Tonkin have today required me to order the military forces of the United States to take action in reply," said President Lyndon Johnson as he fabricated an incident to justify expansion of American involvement in Vietnam. "We did not, I repeat, did not, trade weapons or anything else [to Iran] for hostages," said President Ronald Reagan in November, 1986, four months before admitting that U.S. arms had been traded to Iran in exchange for Americans being held hostage there. "Simply stated, there is no doubt that Saddam Hussein now has weapons of mass destruction," said Vice President Dick Cheney before the invasion of Iraq; when it turned out that these weapons did not exist, Assistant Defense Secretary Paul Wolfowitz explained that "for bureaucratic reasons, we settled on one issue, weapons of mass destruction [as justification for invading Iraq], because it was the one reason everyone could agree on"
(Cockburn and St. Clair 2003, 1). - Benjamin GinsbergAutonomy and Duplicity: Reply to DeCanio

If we can't persuade the public that it's desirable to do these things, then we have no right to impose them even if we had the power to do it. - Milton Friedman, The Proper Role of the Federal Government

Things will not be necessarily continuous.  The fact that they are something other than perfectly continuous ought not to be characterized as a pause.  There will be some things that people will see.  There will be some things that people won't see.  And life goes on. - Donald RumsfeldThe Poetry of Donald Rumsfeld

It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance. - Murray N. RothbardHow Stupid Are You About Economics

In a market -- one of your beloved markets -- an entrepreneur who presents the same product over and over, deriding customers for not buying it, would be the real fool. You'd laugh at such a fellow and tell him he deserves what he gets -- bankruptcy. Yet, you never view your political program that way, do you? - David BrinEssences, Orcs and Civilization: The Case for a Cheerful Libertarianism

The signal to sentient human beings that they have been inadvertently ignorant is surprise (Kirzner 1997, 81). If we are surprised by something, it is almost certainly the case that we did not know it; or that we thought we knew something that has suddenly turned out to be false; or that we knew something that, it has suddenly turned out, we misinterpreted. Only surprises that are deliberately arranged for us (such as surprise parties) resemble the type of ‘‘ignorance’’ that mainstream neoclassical economics is prepared to accept (in this case, asymmetrical information). But our lives are peppered with unarranged surprises about matters that we didn’t know existed or that we thought we had a handle on but turned out to be wrong about. The absence of conceptual space for surprise, we maintain, is the missing dimension in mainstream economics, without which it cannot produce the needed theory of error. - Anthony J. Evans, Jeffrey Friedman"Search" vs. "Browse": A Theory of Error Grounded in Radical (Not Rational) Ignorance

[T]here are known knowns; there are things we know we know.  We also know there are known unknowns; that is to say we know there are some things we do not know.  But there are also unknown unknowns – there are things we do not know we don't know. - Donald RumsfeldThe Poetry of Donald Rumsfeld

It was Hayek, after all, who insisted that prices aggregate producers’ (and consumers’) local knowledge of actual supply and demand conditions.  (If it were not ‘‘knowledge’’ of actual conditions, it would be mere speculation.) Thus, only the central planning board is ignorant, because it does not have access to "knowledge of people, of local conditions, and of special circumstances" (Hayek 1945, 80). In that case, however, if we had some way to transmit this knowledge to the central planning board-as with portable telecommunications devices-the problem would be solved. - Anthony J. Evans, Jeffrey Friedman, "Search" vs. "Browse": A Theory of Error Grounded in Radical (Not Rational) Ignorance

He who knows not, and knows not that he knows not, is a fool; shun him.
He who knows not, and knows that he knows not, can be taught; teach him.
He who knows, and knows not that he knows, is asleep; wake him.
He who knows, and knows that he knows, is a prophet; follow him. - Persian Proverb

O how they cling and wrangle, some who claim
For preacher and monk the honored name!
For, quarreling, each to his view they cling.
Such folk see only one side of a thing. - Buddha, The Blind Men and the Elephant

Professor Juniper: And this is a plume fossil
Cilan and Ash: Oooo...Ahhhhh
Professor Juniper: Donated to us by Lenora from the Nacrene Museum
Cilan and Ash: Wow!
Ash: This is from Lenora?
Iris: Looks like a rock if you ask me
Cilan and Ash: What?!!
Professor Juniper: *cheerfully* I guess different people do see things in differernt ways
Pokemon, Archeops In The Modern World
*Note* Because...all the cool kids (Herman Cain) are referencing Pokemon...and...we all have a platypus controlling us.

The downside of competition among entrepreneurs who have different and fallible interpretations of "the data" is that some of them will necessarily be wrong, and will waste resources on their mistakes. The upside is that all the resources of an entire economy are not bet on the infallibility of the central planners’ interpretation of what to do, or on the interpretation of a single manager to whom this authority has been delegated. (Capitalism, of course, simply is the delegation of this authority to anyone and everyone who can get a hold of some capital.) - Anthony J. Evans, Jeffrey Friedman"Search" vs. "Browse": A Theory of Error Grounded in Radical (Not Rational) Ignorance

Want to reach a predetermined conclusion? Choose a "fundamental" axiom that automatically produces that conclusion, making any argument with this conclusion futile! By anchoring such claims in bedrock, an ideologue makes further discussion impossible. Those who disagree are either evil or stupid. Voila.
David BrinEssences, Orcs and Civilization: The Case for a Cheerful Libertarianism

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 - Herbert SpencerContemporary Review

Thursday, December 8, 2011

Confirmation Bias and Pragmatarianism

JHC, in a recent comment on my Crooked Timber Liberals entry, shared this article...Your Money, Your Choice.  Much to my pleasant surprise the author of the article, Cait Lamberton, discussed the potential value of allowing taxpayers to have a greater say how their taxes are allocated.  It's always enjoyable to have our conclusions confirmed...aka...confirmation bias.

The thing is...it's not confirmation bias because the author of the article is a liberal/progressive!  A Ph.D no less!  Is this a reasonable rationalization?  Well...in my entry on deontological ethics vs pragmatic ethics I considered that both a "pragmatic" communist and a "fair" natural rights libertarian came to the same conclusion that I was full of BS.  So, just on its own, it doesn't necessarily mean much when people from opposite sides of the political debate come to the same conclusion.

Just how self-aware am I?  Is there a bell curve of self-awareness?  One time an English professor criticized me for writing too self-consciously.  For some self-awareness introspection check out Kent's blog entry...Are We Doomed To Be Wrong?.

Kent (see his critique of pragmatarianism) shared a link to my entry on the Blind Men and the Scope of Government...and a link to Cracked.com's list of 5 Logical Fallacies That Make You Wrong More Than You Think.  Those two articles seemed to have presented a challenge to his very strong anarcho-capitalist conclusion.  Was Kent fazed by these challenges?  No way.  Nevertheless it was still somewhat entertaining to watch him so deftly escape from the possibility of being wrong.  Kent...kinda like an anarcho-capitalist Houdini.

As a pragmatic ethics kind of guy I wallow in anything that demonstrates just how wrong we are.  The more cause for self-doubt the better.  As Socrates said, "...it seems that I am wiser than he is to this small extent, that I do not think I know what I do not know."  And as Oliver Wendell Holmes said, "to have doubted one's own first principles is the mark of a civilized man."  Therefore, doubting our principles makes us wise and civilized!  So with great relish I checked out Cracked.com's list of stuff that makes us wrong.

#5. We're Not Programmed to Seek "Truth," We're Programmed to "Win"

How true is this?  If you love playing devil's advocate then this especially applies to you.  It certainly applies to me.  For example...in a recent entry I encouraged people to become the devil's advocate for public goods.

Where is the intersection between winning and truth?  Is it true that history is written by the conquerors?

When I first thought of pragmatarianism I certainly did not consider it to be truth.  Neither did any of my friends...so it was fun to play the devil's advocate for pragmatarianism.  Several years passed with pragmatarianism being nothing more than a purely hypothetical situation.  It wasn't until I genuinely considered anarcho-capitalism...and experienced a sliver of self-doubt...that I recognized the truth in acknowledging that nobody has a monopoly on truth.

#4. Our Brains Don't Understand Probability
Now take it into the realm of politics. The U.S. has spent $1.3 trillion on the war on terror so far. That was in reaction to about 14,000 total deaths from international terrorism from 1975 to 2003. That's more than $90 million spent for each person killed. 
If you point out that this money would have been better spent preventing industrial accidents (which kill twice as many people per year than died in the World Trade Center) or, even better, curing cancer (the equivalent of about 200 WTC attacks each year), you'll be told, "Say that to the 9/11 victims, hippie!"
People are more likely to gamble with other people's money than they are with their own.  Therefore,  taxpayers should be allowed to consider the opportunity costs of war.  Having served in Afghanistan...and having greatly valued our efforts over there...and having lost close family members to cancer...I'd like to pretend that I'm not biased one way or the other.  Forcing taxpayers to make hard decisions with their own individual taxes is the only way to guarantee the maximum benefit to society.

#3. We Think Everyone's Out to Get Us
In one study, subjects were asked to rate the likelihood that strangers would share pretend winnings with them. The subjects figured about half were trustworthy enough to share. When it came time to actually share, about 80 percent came through. The subjects thought the world was almost twice as corrupt as it actually is.
This is also where you get claims like, "Those conservatives don't really think taxes are too high, they secretly hate poor people!" or "Those liberals don't really think the poor need assistance, they're secretly communists!" It's impossible to learn anything from a conversation with someone who you think is lying to you. The more arguments you get into with those lying extremists from the other side of the aisle, the more you learn about how they lie, the faster your brain turns off after they start talking. 
Maybe the anarcho-capitalists are right that the free-rider problem is not that big of a problem.  Or maybe anarcho-capitalists are proof positive that people have to be coerced into paying taxes.  Allowing taxpayers to directly allocate their taxes would reveal which public goods, if any, the free-rider problem applies to.

#2. We're Hard-Wired to Have a Double Standard
The reality is, of course, that you were on completely different roads. The assumption that everyone's circumstances are identical is so plainly wrong as to be borderline insane, but everyone does it. Pundits and politicians alike mock the unemployed as lazy, even though their own data shows that for every five unemployed people, there is only one open job. "I don't understand, can't you all just become radio talk show hosts like me?"
Right, we're all just blind men touching different parts of an elephant.  The Truth can only be arrived at by integrating all our unique perspectives and values.  Our true values can only be revealed by forcing us to put our money where our mouths are.  Therefore, taxpayers should be allowed to directly allocate their individual taxes.

#1. Facts Don't Change Our Minds
That is why confirmation bias exists. We read a news article that supports what we believe, and we add it to the "I'm right about this" column. News articles that contradict what we believe are dismissed. We make up a reason -- maybe the source is part of the conspiracy from the other side or whatever it takes to make sure the "I'm wrong about this" column remains empty.
This explains why the Ostrich Response to pragmatarianism is by far the most common response.  For another perfect example check out how neither Team Hayek nor Team Keynes responded to my compromise...Opportunity Costs for Thee, But Not For Me.

Well there you have it.  The 5 logical fallacies that make you wrong more often than you think also happen to make me right more often than I think.  But I might be wrong.

Wednesday, December 7, 2011

Anarcho-capitalism vs Civilization


When I lived in Afghanistan for a year, going from village to village, it was like I had been transported back into time. Way back into time. It was like living in the Old Testament.

Part of our efforts in Afghanistan involved trying to help the Afghan people set up a very basic government..."minarchism" so to speak. The challenge is that Afghanistan is a tribal society. They do not have a national identity...they have a tribal identity. They do not bear allegiance to a flag that symbolizes the entire nation. Their motto is not e pluribus unum. Here in America we think of ourselves first as Americans then second as African Americans, Middle Easterners, Asians, Mexicans, Caucasians...or...Christians, Muslims, Buddhists, Atheists...or...liberals, conservatives, libertarians, anarcho-capitalists...or...

If the Afghan tribes had all worked together...would they have been able to repel the countless invasions that occurred throughout their history? If you've read the Bible...how many times were the tribes of Israel conquered by more civilized nations? Same thing with the native Americans.

Clearly we all started out in tribal societies...but some managed to become "civilized" while others have not. Having studied development theory...I can tell you with absolute certainty that we do not know why some tribes develop while others do not. There are plenty of theories but they are all just that...theories.

What would happen if, via anarcho-capitalism, we got rid of our national identity? If we did not think of ourselves as "Americans"...then what would we think of ourselves as? Obviously our secondary identity would become our primary identity. There would be no allegiance to a flag and there would be no e pluribus unum.

But...there would be property rights! Right? Is that enough though?

I'm willing to entertain the possibility that anarcho-capitalism just might work. Yet...I'm also willing to entertain the possibility that it really wouldn't work.

The beauty of pragmatarianism is that I do not have to assume I know what I do not. As Socrates said, "...it seems that I am wiser than he is to this small extent, that I do not think I know what I do not know."

Rothbard drooled over a button that he could push to entirely destroy the state in one fell swoop. If the state is entirely unnecessary though...then each part of the state is also entirely unnecessary. Why not just allow each and every taxpayer to use their own, individual, hard-earned taxes to indicate which parts of the state are entirely unnecessary? If consumers do not purchase unnecessary private goods...then why would they "purchase" unnecessary public goods?

Why not become a devil's advocate for public goods?

Monday, December 5, 2011

Crooked Timber Liberals - Monopolizing the Facts


The Crooked Timber Liberals posted this new entry...Renouncing the facts in the name of method (Mankiw channels Lukacs).  Here was Chris Bertram's conclusion...
I’ve never had sympathy for what Lukacs says here, and don’t know the context for the Keynes quote. But I’m struck by the way that both Mankiw and Lukacs implicitly endorse the idea that they can just keep on keeping on, whatever happens in the actual world.
What happens in the "actual world"?  Are liberals the only ones who live in the "actual world"?  Here was my comment...
"The problem is thus in no way solved if we can show that all the facts, if they were known to a single mind (as we hypothetically assume them to be given to the observing economist), would uniquely determine the solution; instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge. To assume all the knowledge to be given to a single mind in the same manner in which we assume it to be given to us as the explaining economists is to assume the problem away and to disregard everything that is important and significant in the real world." - Friedrich August Hayek, The Use of Knowledge in Society
Are any of you guys ever going to respond to my challenge that taxpayers should be allowed to directly allocate their individual taxes? Or are you just going to keep on pretending that you have a monopoly on facts? Perhaps you enjoy arguing like blind men touching different parts of an elephant?

Why not genuinely consider what The Devil's Advocate of Public Goods has to say? Why not recognize, respect...or at least tolerate other people's values?
Unlike some of my other comments on the Crooked Timber blog...they didn't have moderation enabled so I managed to post the comment.  It didn't last long though.  When I revisited the entry here's what I saw in place of my comment...
[Crooked Timber comments threads are an opportunity to engage in conversation, not the granting of a soapbox for you to promote your private obsessions. Please go away. CB]
I got shooed away.  Wasn't my comment relevant?  They were talking about "renouncing" facts so I shared Hayek's perspective on who owns the facts.  Then I offered a compromise and suggested political tolerance.

Sure, I'm self-aware enough to recognize that pragmatarianism could certainly qualify as an obsession.  And yes...I can't argue with the fact that I'm promoting my obsession.  But it's obviously not a private obsession...and aren't the Crooked Timber Liberals also promoting their own obsession?  

What was so harmful about my comment that they couldn't just allow other readers to form their own opinions on the relevance of my comment?  Aren't we all quite adept at that?  Do you really want other people to do that for you?  I sure know I don't.

Is it really that bad though to be obsessed with a reasonable compromise?  Pragmatarianism doesn't advocate getting rid of taxes or reducing the scope of government...but not once did the Crooked Timber liberals bother to address my compromise.  Yup...yet another ostrich response to pragmatarianism.

Saturday, December 3, 2011

The Devil's Advocate for Public Goods

The following represents a mash-up of my responses to these three different discussions...

*************************************************

In the Garden of Eden God instructed Adam that he could eat the fruit from ALL the trees in the garden EXCEPT for one tree....The Tree of the Knowledge of Good and Evil...aka the Tree of Conscience. God limited Adam and Eve's freedom...but the serpent managed to convince Eve...who then managed to convince Adam...to choose to doubt God's one simple rule.

The moral of that story was that you shouldn't doubt higher authority...you shouldn't think for yourself. Instead, you should submit your will to those in charge. You should have enough faith to completely "put yourself in God's hands".

How convenient for those in charge...right? Isn't that why Marx lamented that religion is the opium of the masses? It's hard for people to revolt if they believe that heaven is the reward for submitting to a higher authority. It seems reasonable to say that progress would be severely restricted if people did not doubt commonly held beliefs. According to Oliver Wendell Holmes Jr..."to have doubted one's first principles is the mark of a civilized man."

We should never take limits to our freedom for granted. The trick is understanding that we all accept different justifications for having our freedoms limited. Shemsky believes that the freedom to swing your fist ENDS where somebody else's nose begins. In other words, he believes that the Non-Aggression Principle (NAP) is the only justification for limiting our freedoms. Mark Friedman, on the other hand, believes that taxes are only justified to the extent that they help protect our property from others...with a few "reasonable" exceptions. The majority of people, however, believe that taxes are only justified to the extent that they maximize the benefit to society as a whole.

There are no "natural rights" though. You can't hang out in a lion's den and expect the lions to respect the NAP. The only principle that we can observe in nature is survival of the fittest. Therefore, limits to our freedoms are only legitimate in terms of consensus.

If the consensus is for taxes to maximize the benefit to society...then why do we allow congresspeople, rather than taxpayers, to allocate taxes? Why did we ever allow a king, rather than elected representatives, to allocate taxes? The answer is that we're always in the Garden of Eden. The serpent represents those of us who fundamentally challenge the current system.

People in the middle ages were too stupid to realize that they were in the middle ages. Incidentally, does anybody know who said that? For the life of me I can't remember who it was. Anyways, the fact of the matter is that we're never "civilized"...we're always in the process of becoming civilized. Society will always be a work in progress.

There is no logical or rational explanation supporting the commonly held belief that congress can allocate taxes more efficiently than taxpayers could. We all have unique values. The only way that we can accurately convey our values is by putting our money/time where our mouths are. Each "consumer" that we take out of the picture skews the distribution of public goods. What happens when we take all but 538 consumers out of the picture? Obviously we end up with a very inefficient allocation of public goods. To steal Obama's favorite analogy...this is why the "car" ends up in the "ditch". It's why the car will always end up in the ditch...unless we somehow manage to help people understand that society as a whole will benefit by allowing taxpayers to drive.

The moral of my story is that playing the role of devil's advocate is only worthwhile if we can truly understand why people are willing to put public goods in congress's hands.

Thursday, December 1, 2011

Is There a Platypus Controlling You?

Over on the Ron Paul forums I started this thread...Is Christmas Coercion?  My goal in starting the thread was to try and imagine the resource allocation disparity between a world with and without Christmas...in order to help try and imagine what the resource allocation disparity might be between pragmatarianism and anarcho-capitalism.

Nearly everybody who responded to the thread completely missed my point and instead tried to refute any possible coercive element of Christmas.  Most of the comments were fairly predictable...except for the comments by wistfulthinker.  His comments were extremely exceptional.  In my opinion it is well worth it to sign up to the Ron Paul forums just to read his comments.  You might not agree with his content...but personally it was like receiving a totally unexpected but very enjoyably ironic gift.  It helps to read the entire thread to fully appreciate the irony.

Everybody is coerced/controlled by something/someone to some degree...right?  Personally...I wish I didn't have to eat or sleep.  But there are plenty of people that take great joy in eating and sleeping.

How many times in our life have we been coerced into doing something good?  How many times in our life have we been coerced into doing something bad?  "Peer pressure" generally has a negative connotation but traditions are nothing more than peer pressure amplified into social pressure.  There's incredible pressure to conform...people who fail to conform in a bad way are considered deviants while people who fail to conform in a good way are considered nonconformists.  Whether somebody is a deviant or nonconformist is subjective and relative though.

When it comes to the scope/responsibilities of government ...are you a deviant...or a conformist...or a nonconformist?  Here's a bell curve diagram that represents society's views on what the government should or shouldn't do...




















There's a continuum that ranges from people that believe the government should do everything (socialists) all the way to people that believe that the government shouldn't do anything (anarcho-capitalists).  In between are liberals and libertarians.  If you scroll down my entry on libertarianism you'll find a timeline of the perspectives of prominent libertarians on the proper scope of government.

Another way of thinking about the political ideology continuum is to organize the various ideologies based on their views on how pervasive the free-rider problem is...The Blind Men and the Scope of Government.

Do we really need the government to act like our parents?  What type of parenting style should the government adhere to?  Authoritarian parenting style...soft-paternalism parenting style...maternal parenting style...permissive parenting style?

It's entirely possible that anarcho-capitalists are correct that as a society we're grown up enough to stand on our own two feet.  But can we ever truly know whether somebody is responsible enough to stand on their own two feet without completely withdrawing our support?

The kicker is that we know exactly how grown up we truly are as a society.  The challenge is to understand that the answer is collectively known.  The sum of our individual answers is the true answer.  To arrive at the true answer we need to integrate our perspectives.

How can we integrate our perspectives?  By allowing taxpayers to directly allocate their taxes.  This will allow taxpayers to use their taxes to highlight the areas where we still have some growing up to do.  Their tax allocation decisions will address the shortcomings of the private sector...AND...the shortcomings of the public sector.

Control is a very serious matter...but I strive not to take myself too seriously.  With that in mind...






Vanessa: Dad?
Heinz Doofenshmirtz: Oh, hi, Vanessa!
Vanessa: Dad, what are you doing?
Heinz Doofenshmirtz: Well I'll be honest I don't really understand
But I fell down this hill and I got glue on my hands
Now I got records on my fingers
Kids: Whaaaat?
Heinz Doofenshmirtz: Records on my fingers
I got records on my fingers and I just can't stop
Kids: Don't stop
Heinz Doofenshmirtz: I can't stop I got a platypus controlling me
Kids: WHAAAAT?
Heinz Doofenshmirtz: I got a platypus controlling me
Now let me sum it up
It was a strange set of circumstances
Kids: Strange set of circumstances?
Heinz Doofenshmirtz: I fell down the hill, I got glue on my hands now I got records on my fingers
And I just can't stop
Kids: DON'T STOP DON'T STOP
Heinz Doofenshmirtz: Well I would if I was able
there's a platypus controlling me he's underneath the table
Kids: There's a platypus controlling him—WHAAAT?
Kid: Oh I get it, platypus is a metaphor for whatever is keeping you down
Kids: Corporations are a platypus
The government's a platypus
Your teacher is a platypus
Weird Kid: My teacher is a panda
Kids: Society's a platypus
My parents are a platypus
The media's a platypus
It's all just propaganda
We've all got platypus controlling us
Heinz Doofenshmirtz: No just me
Kids: We've all got platypus controlling us
Heinz Doofenshmirtz: I'd stop if I was able
Kids: We've all got platypus controlling us
Heinz Doofenshmirtz: I'm not speaking metaphorically
the platypus controlling me is underneath the table
Oh wait, no, he's gone!
Heyyy! There's no platypus controlling me...
There's no platypus controlling me!