… certainly have some attractive qualities, but although Graeber wins the battle against the “Myth of Barter” here I think he loses the war – really, although the discussion of socially embedded exchange is incredibly interesting and illuminating, I think anyone who reads the passage above is going to end up sympathising with the people in the economics department who say that you really can’t organise a modern industrial society on the basis of organising a wife-swapping party every time you want to buy a blanket. - Daniel Davies, Too Big To Fail: The First 5000 YearsThe Crooked Timber Liberals have recently posted so many blog entries on David Graeber's book on Debt that it kind of feels like I've already read the entire book. Daniel Davies posted the latest one...and I was almost tempted to skip it...but then I decided to just skim it. Boy, am I glad that I decided to skim it!!! I literally LOL'd when I read the above passage.
I'm also a huge fan of National Geographic so it was also worth it to read his blog entry. The passage he shared from Graeber's book offers a fascinating insight into the socioeconomic behavior of a very different culture. Right there I considered using the word "primitive" but then decided against it...given that Stranger in a Strange Land is one of my favorite books. Also, as I argued in this post...the devil's advocate for public goods...we're never "civilized"...we're always in the process of becoming civilized.
In terms of pragmatarianism...the whole debt debate, like most of our political/economic debates, becomes a moot point. Taxpayers would give as much of their taxes as they wanted to say...the Dept of Education. If taxpayers weren't happy with how the DoE was spending their money then they would just give their taxes to other government organizations. If students felt that the DoE should give/lend them more money then the students themselves would have to convince taxpayers to allocate more of their taxes to the DoE. If taxpayers did decide to give more of their taxes to the DoE then this would of course mean that other organizations would receive less revenue. So students would receive more money...but perhaps poor/old people would receive less public healthcare.
We all stand to benefit as a society when each and every taxpayer is allowed to consider the opportunity costs of their tax allocation decisions. In other words...we all stand to benefit when limited resources are efficiently allocated. In other words...we all stand to benefit when each and every taxpayer is given the opportunity to maximize the utility that they derive from their tax allocation decisions. In other words...why would anybody argue for the misallocation of their own, hard-earned taxes?
The question is...why aren't more people putting this in their own words? I get that the general public has no idea how the invisible hand works...but what about economists?
So the more specific question then becomes...who will be the first economist to openly and fully endorse pragmatarianism? Let's see...
Definitely not Noah Smith...
Xerographica - I guess it's just that I have trouble understanding what you write...Definitely not Steve Horwitz...
Bastiat may not have made any real contributions to economic theory...Probably not David Friedman...
I don't think that letting taxpayers allocate their taxes among options provided by the government solves the fundamental problems of government.Maybe...Arnold Kling...
I think that allowing taxpayers to allocate their taxes would be an improvement, but why stop with government organizations? Why not allow them also to choose from competing charitable organizations? That is what I propose in Unchecked and Unbalanced.But I'm going to go out on a limb here and vote for Peter Boettke. The name of his blog is "Coordination Problem" and he writes about fallibilism...and he has yet to say anything about pragmatarianism.
Does anybody know of any other economists that might openly and fully endorse pragmatarianism? If so, just ask them about pragmatarianism and then link me to their response. Even if their response is negative please share it with me so that I can add it to the list.
Does anybody know of any other economists that might openly and fully endorse pragmatarianism?
ReplyDeleteNo, because it offers no solution.
Your premise is flawed because you belief taxation is the means of FUNDING government.
But modern government needs no such device - it has alternative means of funding that are far easier for government to use (manufacturing money).
Taxation is MANIPULATION of the populace - tax what the government wish to dissuade, tax credit what the government wish to promote.
Your theory would remove this completely away from government hands - a tool invented by government to do precisely this manipulation.
Therefore, it is actually EASIER to REMOVE taxation then alter taxation in the manner you prescribe.
As you cannot overcome this fact of taxation, your position is utterly pointless.
How is it easier to remove taxation when people do not understand how the invisible hand works? Did you read all the responses to pragmatarianism that I compiled in this blog entry...Unglamorous but Important Things?
DeleteYou should really join the Ron Paul Forums...it's easier to have discussions over there.
Xero
ReplyDelete"...easier to remove taxation..."
First I said it was easier to remove taxation then to implement your tax philosophy - not that it was necessarily easy to remove taxation (period).
Your theory undermines the root purpose of taxation as designed by THE GOVERNMENT - that is, economic manipulation of the people.
The only way taxation will be altered is by THE GOVERNMENT, and since you want it altered in a way to defeat GOVERNMENT, expecting GOVERNMENT to defeat its own purpose is naive.
The only way taxation will be ended is by THE PEOPLE and when THE PEOPLE no longer accept taxation, it will end, no matter what the government wants.
As such, your position is wholly a fairy tale. It simply will never happen.
Xero, literally DECADES of argument, discussion and dialogue has occurred over even a more simpler concept then yours - "Fair" or "Flat" tax.
Beyond no doubt, such a tax arrangement (if the purpose is government funding) is a incredibly "better" methodology.
It has had endless support and, indeed, it has had NO ARGUMENT IN OPPOSITION of any merit.
YET!!!.....
...it has not happened.
...It will never happen.
...because such a thing as a "fair" or "flat" tax UNDERMINES the economic manipulation tool that taxation provides.
Now, if such a simple program as fair/flat cannot be implemented --- to believe yours can be... which is almost infinitely more radical .... is utterly naive.
You are a very smart guy, no doubt.
If you want to make a difference in the arena of ideas, however, this one has zero traction.
Xero,
ReplyDeleteFurther:
In all these comments, you have not denied the reality that taxation is a economic manipulation tool of government.
Yet - you refuse to accept this fact, or (if you do accept it)you do not address it at all within your pet theory.
Either you must abandon your theory in the face of this fact (economic manipulation) since your theory cannot accommodate it
OR
Your theory must - somehow - reconcile this fact as it is the MOST FUNDAMENTAL COMPONENT OF TAXATION TODAY.
Ignoring it is not an option.
In none of your comments have you addressed Hayek's concept of partial knowledge. Therefore, as Hayek said, you're ignoring "everything that is important and significant in the real world."
DeleteIf you get a chance you should look through this thread I posted on the Ron Paul Forums...Banned From Bleeding Heart Libertarians. You'll be able to read what I wrote regarding the issue of currency.
Xero,
ReplyDeleteConcept of partial knowledge does not apply here.
The concepts of taxation are known: funding and manipulation.
I do not need to "know" the entirety of consequences of the manipulation to know that manipulation is at work.
I also know that the manipulation is PURPOSEFUL - that is, it is not randomly applied. Again, I do not need to know the entirety of the consequences of that non-random application to know it is not random and that is has been designed and directed.
This is the precise issue that confronts and confounds your theory.
You do not account for the REASONING behind the existence of taxation in the first place - you focus only on the (long irrelevant) reason of funding.
Today, funding via taxation simply is irrelevant.
Today, taxation is a tool of economic manipulation.
You do not acknowledge this fact, let alone account for it.
Partial knowledge is always applicable. If you had read the comments on this thread I posted on the Ron Paul Forums...Why Is Your Partner Cheating On You?...then you would have known that I already have accounted for the reasoning behind the existence of taxation in the first place.
DeleteWhy didn't you know what issues were discussed in that thread? Because you only have partial knowledge. Again, to think that you have a monopoly on facts is to "disregard everything that is important and significant in the real world."
Xero,
DeletePartial knowledge is NOT always applicable - such as when it is irrelevant.
I know 2+2=4.
I know taxation exists to manipulate the economic decisions of the people.
I do NOT need to know the consequences of such manipulation to KNOW such manipulation exists.
In your noted thread, you did NOT address the taxation rational of economic manipulation - in fact, I pointed that out to you -again- that you avoided it completely.
You are stuck on the singular notion of funding - which, in fact, is wholly irrelevant for modern governments who can manufacture money out of thin air.
You are stuck. By focusing merely on the funding and its allocation, you avoid the essence of taxation - economic manipulation - and have no answers to such manipulation EXCEPT elimination of taxation - which is a goal you DO NOT ascribe to....
Hence, why your arguments are discarded in other forums and why no economic theorist will undertake a dialogue regarding it .... to path to Pragmatarianism MUST cross elimination of taxation - which, makes pragmartianism wholly irrelevant since to achieve it means "no taxes" and with no taxation, no pragamatarianism.
1. You say that the partial knowledge concept is irrelevant
Delete2. You then say that you know something that I do not
Which one is it?
Xero,
ReplyDeleteDon't be obtuse.
I said "Partial knowledge is NOT always applicable"
Do not waste my time with such puerile argumentation - you are flaying in desperation and it is unbecoming of you.
Heh..."flaying in desperation"...funny. Yet you're the one who didn't answer my straightforward question. Here it is again...
Delete1. You say that partial knowledge is not applicable to this situation
2. You then say that you know something that I do not
Which one is it?
Xero,
ReplyDeleteIt was not "straight forward" because you made up a story about what I said - that is called a "Strawman".
....
To answer here:
Both, they are not exclusive.
I can know something you do not about economics while at the same time not knowing everything about medicine.
Here's an argument for you. (I split it over three comments b/c it was too long otherwise).
ReplyDeleteLet's take a look at the country in a period before the population allocates their taxes. The country has obvious problems: let's say there's broad recognition that the FBI needs more funding, that the border security needs more funding, etc. Any examples will do; just that there are recognized problems. National problems, like with your DoE example in the post.
Ok. Then individuals change their individual tax contribution to either start allocating funds or to allocate more funds to the areas that need funding. And the important thing is that no one knows, because it's impossible to know, how much anyone else is going to change their allocation, right.
Now let's skip ahead in time a bit; after the tax allocation period we just talked about, but before before the population allocates their taxes for the next period (probably a year later, right?). The problem areas from the last cycle have more money, maybe enough money to run the programs they want, maybe even more money than they know what to do with. We can't really say whether any of these situations is a good thing or not, because we haven't specified what programs we're talking about or the amounts of money we're dealing with.
But we can know that there's going to be an important problem. Money allocated from other programs has left those programs less able to deal with their tasks. Depending on the program and the amount of money they lost, they will not be able to perform the functions they had been.
So the public notices, and alters their tax allocation for this period. See what's happening? Skip ahead to next period, and the same thing happens! There is a constant, spinning misallocation of funds because people don't know what the entire tax allocation picture looks like.
(Second of three)
ReplyDeleteThis phenomenon will happen for other reasons too. Let's say some event affects a region that causes most people an area to change their allocation in the same way. A bunch of tornadoes occur across several states, or presidential candidates spend a lot of time saying how poor border security is so a bunch of Arizonans all allocate more money to border security.
Then in that round of tax allocation, the regional project that acquires funds is taking them from other projects. But, nobody can know from which other projects those funds are being taken, because that's impossible to know. So in this cycle there are going to be programs that don't get enough funding, and then the circle of misallocation is up and kicking.
Dozens of things can start it. News of new technology get people excited for practical applications, so they allocate money for research. A particularly high-profile drug overdose case causes people to donate more to drug treatment. The Chinese start sending people to the moon, so NASA gets a huge influx of cash. Or some departments have high-profile cases of something bad happening due to lack of funds. Anything that causes a non-negligible but still fairly small shift in allocations will start the cycle. And the result is terrible governance.
The reason why the cycle starts and is sustained actually lies in a few concepts that are the bedrock of your idea. Hayek's partial knowledge point is a good one, but it's only salient when an aggregation of individual decisions is equivalent to an overall decision a top-down designer would make if he had perfect information. For example, I know how much paper is consumed at a law firm, and I know the consumption habits of the firm w/r/t paper. I don't know that information for a hospital or a school or what have you. But, I don't need to. All I need to do is act on my partial knowledge of the firm, and all other people need to do is act on their partial knowledge for their paper needs, and a market price will be set so that the paper is allocated in a manner that results in the most value to the system. A top down administrator, trying to figure out how much paper to make and who to give it to, is trying to make the same types of decisions. And, if he were omniscient, he would (very probably) distribute paper to the same people and in the same proportions as a system that uses prices and markets.
BUT. This is not the scenario for people deciding how to allocate their taxes. Because in this situation people acting on their partial knowledge does not in the aggregate equate to the decisions a top down actor would choose to make things most efficient. There are these cycles of misallocation where people will have to inevitably adjust their allocations, not because they consider it the best place for their taxes to go, but because they're trying to coordinate their allocations with the allocations of other people and are unable to. Hayek's partial knowledge concept, in the case of people allocating their own taxes, actually results in inefficiency instead of efficiency.
(Third of three)
ReplyDeleteAnother bedrock concept you seem to talk about a lot but that actually hurts the idea of people allocating their own taxes is opportunity cost. The idea that people need to consider what they're giving up when they choose to allocate resources in a particular way. This hurts your idea, and is demonstrated by the cycle of misallocation, because people individual people allocating their taxes can't possibly know the opportunity cost of their allocation, because they don't know what other citizens are choosing. If I thought the roads are falling apart and wanted to allocate money to them, but my absolute first priority is keeping mental health spending at a minimum level, I have to know how much funding for mental health spending and for road maintenance is going to be before I make my decision. And I can't possible know that. So I'm constantly having to adjust my allocations based on the allocations of others from the previous cycle, and that just feeds the cycle of misallocation.
I hope I've made myself clear on these points (a long-shot proposition, I'm sure), and I'd like to offer a preemptive defense of likely arguments against them. One thing that appears in other posts on the site is the idea that some people won't bother allocating their taxes, and just let Congress allocate them as they do now. That doesn't really change my analysis at all, because the people who chose to allocate their taxes are still going to have to take what Congress is going to allocate into consideration; Congress will have to take into account what the people are going to allocate themselves; and everyone has to account for the varying levels of taxes people are going to let the government allocate from year to year. In a way, this proposal makes the problems I talk about worse, because it provides another dynamic for people to be uncertain about (ie, not knowing how much money is going to be allocated by the people and how much by congress at any one time).
Another objection I think would be forthcoming is that people can allocate taxes over the course of the entire year, and if this mechanism is used there won't be these one-off periods where everyone allocates at once and has to hope they guess about what everyone else is doing. But, again, this tactic will only make the trends worse. Because now I not only have to consider what other people are going to do with their tax allocation, but I have to consider the time at which they might do it. So I might think I have what is the perfect allocation of my taxes, but I can't be sure about it until time passes; something may happen that changes my decision, or that I think will change the decision of others. So now taxes will not only be misallocated according to project but misallocated according to time.
Anyway, hope I've given you something to think about, and hope you think the ideas are worthwhile enough to keep discussing.
Thanks for your comment! You correctly predicted a couple objections...
Delete1. I have no idea what percentage of taxpayers would choose to directly, rather than indirectly, allocate their taxes.
2. Taxpayers would be able to allocate their taxes throughout the year.
Here are a few more...
3. each government organization (GO) would have a fundraising progress bar on its website. Allocation decisions could only be considered to be "misallocations" if taxpayers continued to give money to a GO that had already reached its fundraising goal for the year. Nobody would derive much of a "warm glow" from doing so though. It would be easy enough to create a website that allowed taxpayers to see, on a single page, all the progress bars of their most valued GOs.
4. if any GO was seriously short of funds then why wouldn't they just hold fundraisers or pay for ads like non-profits do? Doesn't the thought of GOs making the effort to convince/remind us of their value really warm your heart? Because it sure warms mine! With standard good practices non-profits receive $5 for every $1 they spend on fundraising.
5. nothing would stop taxpayers from allocating more than their fair share of taxes to any GOs that hadn't met their fundraising goal by the end of the year.
6. you didn't explain why we don't see these prisoner dilemma problems in the non-profit sector.
7. how can 538 people accurately guess the public goods demand for an entire nation? Do they have any idea how many potholes you would be willing to forgo for additional cancer research? Do they have any idea how much public healthcare I would be willing to forgo for more environmental protection?
Awesome. I gave reasons for why 1 and 2 don't solve the problem, so we can discuss those reasons or not. I'll split up my responses to the remaining points over three comments again.
ReplyDelete3. Just so we're on the same page, the website thing only makes sense in the context of people being able to allocate taxes at multiple points or at any time over the year, right? Ok. It doesn't solve anything. Let's say I have a rank order of three GOs having their minimum level of funding met, and then if they're all funded I'll allocate whatever's left over to a fourth GO. Now: when do I commit my funds? If I commit them early in the process, there will be misallocation: I'll donate to a GO that will have a surplus at the end of the year, or I'll guess wrong about the level of funding each GO will get and I'll end up not following my rank order. If I make that argument to myself and commit my funds later in the process, then most other people will do that too, and then there will be a wild influx of money and no-one will be able to tell if they made the right decisions or not until it was all over.
This brings up another issue I didn't get to: since funding for GOs will be a lot more variable within a year and between years, each GO will want to run a surplus in order to have wiggle room in their yearly operating budget and to set up some sort of savings/endowment thing in order to be able to have a consistent level of funding across time. So taxpayers would be giving tax money to GOs so they could hoard it until a later date. Whatever else you want to call it, that is not an efficient use of money.
4. I'm a little confused by "pay for ads", since it could mean either paying for media saying "we need money" or selling advertising space in order to raise money. If it's the former it doesn't solve a problem, because I've been using the assumption that people have perfect information about what they want to fund and what the needs of the programs are; the only thing they don't know is how other people will choose to allocate their funds. Buying ad media doesn't change any of that.
As for raising money through selling ad space, that might work for some public-interaction GOs like the DMV, maybe even law enforcement, but it just doesn't make sense for others. Where is the EPA or a volcanic monitoring station going to sell adspace to entice people to buy things? Furthermore, this makes GOs accountable to their advertisers, which is bad for dozens of reasons. "Investigate my competitors or we'll pull our ads!" "Give us special privileges or we'll pull our ads!" "Do our ideological bidding or we'll pull our ads!" Etc. I'd just as soon not open that particular pandora's box.
Also, fundraisers. This doesn't really make any economic sense, because the fundraising would be in response to misallocations caused by the taxpayer allocation system. Each dollar fundraised would be a deadweight loss compared to the current system. Plus, nothing stops GOs now from holding fundraisers (I'm pretty sure; at least, schools and fire departments and such hold all kinds of fundraisers, so it'd be a little weird if there was a law forbidding fundraisers for most GOs but allowing them for those). So the fact that fundraisers are possible now but not actually done is a pretty compelling argument that either 1) fundraisers wouldn't work or 2) things are pretty efficiently allocated as they are.
5. Similarly, nothing stops people from giving to GOs currently. If I want to donate $5,000 to the EPA or whatever, I can. That not a lot of people do this is a testament to either 1) people not giving a shit about GOs operating or, more likely, 2) things are fairly efficiently allocated as they are. Also, in a world where GOs needed taxpayer allocation or fundraising money every year, being a little short at the end of the year translates into citizens getting boned out of their services. If the EPA or a mental health clinic or the DMV or what have you runs out of money, then they stop providing those services, which would be nigh disastrous regardless of the question of whether or not people want to fund them. Which is why
Delete6. the NGO/non-profit analogy doesn't hold up. Take a look at a list of the top non-profit orgs in the US. They all serve needs that are functionally insatiable and that aren't met by the government: feeding starving families, providing triage and disaster medical care, etc. You know that when you give to those organizations, the function they perform can't possibly be completed, but you're allowing them to perform more of their operation on the margin: your contribution means one more family is fed, one more person gets a cot and a hot meal in a disaster zone, etc.
This is completely different from the mission of a typical GO, where the tasks they perform are more holistic and depend on everyone in their target community being served and all of their goals being met in order to function properly. If the DMV doesn't get enough funds over the course of a year, that completely disrupts the entire functioning of the licensing and registration of motor vehicle operation. Same with stuff like the FDA, the departments of energy and education, any GO concerned with the legal system, on and on and on. A system where complex cycles of misallocation are a certainty means that any one of these programs faces a shortfall in funding at any point of time, which means any of them could fail to achieve their basic institutional goals at any given time. No thanks.
7. Couple responses to this one.
DeleteA) As stated above, your objections actually do a fairly good job of outlining how efficient the current system actually is. Fundraisers for GOs are incredibly rare, as well as individual donations to GOs. This suggests the system is satisfying everyone's public good needs. Another data point for this is that the vast majority of people don't give a shit about the workings of the government, and can't even name major federal agencies. If the vast majority of people don't bother to learn about the allocation of public goods, they must be satisfied fairly well by the current system.
B) It's not like there aren't mechanisms now to allocate funding for public projects according to citizen preferences. People make demands, and those demands are discernible by the government (not just politicians, either; government agencies commonly shift resources around to cater to public needs). Resource allocations shift, demands are met in some fashion, people either stop complaining or complain about something new, and things get done. Even if it's not perfect, it's still better than your system because
C) It wouldn't work. Wild swings in misallocation of public resources which, while not completely random, would be so complex that nobody would be able to be on top of them, would be a terrible terrible system, much worse than we have now, and wouldn't satisfy your criteria anyway. Individuals would not be able to allocate resources according to their preferences, because they would be chasing each other across misallocation cycles. Plus (here's a point I meant to include in the last series of comments but didn't get around to)
D) Public goods can't operate according to individual preferences adapting over time. Fer instance no one gives a shit about disaster relief until, whoops, there's a disaster. Adequate response to a disaster, which people demand, requires a consistent level of staff, training, supplies, and logistical clarity coordinating it all. That can't be maintained by a public which would allocate bare bones levels of funding in good years and then spike way up when there's a disaster.
How can we be sure that's what the funding for disaster relief will look like? Because it happens with people allocating resources to protecting their own stuff. Right after a disaster people insure up the ass for the kind of disaster that just happened. Then a few years down the line insurance purchases drift back down . . . until there's another disaster and they shoot back up again. If people are that myopic about their own private stuff, they'll certainly be myopic about public stuff. There are dozens of cases like this where allocation of resources by experts results in a better more efficient allocation than on relying on everyone's partial knowledge to aggregate to a wise solution.
I'm interested to hear your response!
When I'm deciding whether to purchase a laptop I don't need to call you up and ask whether you are going to purchase a laptop. All I need to know is
DeleteA. if I need a laptop (partial knowledge)
B. if I'm willing to forgo other possible uses of my limited money (opportunity cost)
It's the same thing when I'm deciding whether I should donate to UNICEF. I don't need to call you to ask whether you're going to make a donation to UNICEF. All I need to know is...
A. if children in developing countries need humanitarian assistance (partial knowledge)
B. if I'm willing to forgo other possible uses of my limited money (opportunity cost)
It would be the same exact thing with pragmatarianism. If I'm deciding whether to allocate my taxes to the EPA I wouldn't need to call you up and ask if you are going to allocate any taxes to the EPA. All I need to know is...
A. if the environment needs protection (partial knowledge)
B. if I'm willing to forgo other possible uses of my limited money (opportunity cost)
Clearly people respond to shortages of the goods that they value. My goal isn't to give money to Toshiba...or UNICEF ...or the EPA...my goal is try and help address shortages of the things that I value...a laptop...humanitarian assistance...environmental protection.
Shortages either do...or they do not...exist. If there's a shortage of something that I value...why would I wait to try and address it? The existence of these shortages are detrimental and they are no easier to ignore than hunger pangs.
It's not at all about coordinating...it's about convincing. It's where I'll call you up and try and convince you that the shortages that I observe are more important than the shortages that you observe. You'll do the same and in the process we'll exchange partial information.
If you get a chance check out my post on Unglamorous but Important Things. If you search the page for "FEMA" you'll find that I added your concern to the list of responses.
Glad I brought up something unique enough that you recorded it elsewhere.
DeleteThe link you provide for an answer to "The FEMA problem", though, doesn't really address it. It's kind of hard to understand (mainly because it's written so vaguely), but I think the gist of it is that certain vital industries would be directly funded by taxes from their own employees? So that they would be somewhat self-sustaining?
While that makes a certain kind of sense, there are theoretical and practical problems. The theoretical problem is that there will be tremendous pressure to wildly distort the labor market by offering employees tremendous salaries, so that more money will be plowed back into the government program. Plus it would probably be unconstitutional (violates equal protection like a m-fer), but completely seriously that isn't that big a hurdle to overcome.
The biggest problem with the plan though is empirical. The numbers just don't work. FEMA's a multi-billion dollar enterprise. All of the tax revenue from its employees wouldn't cover the upkeep and running of its headquarters. I mean that money would be better than nothing, but wouldn't avoid the problem I discuss. FEMA (or any disaster relief endeavor) would still require the vast vast majority of its funding from sources outside the tax revenue of its employees, and would still fall prey to my argument. (Oh, also, your link admits that as well: "The GO's on the other hand (i.e. essential programs that basically cannot generate any private revenue like welfare and intelligence as examples) would definitely have to be figured in somehow (small % of tax income across all industries?)")
As to the rest of my comments: look. I've provided multiple reasons for why citizen tax allocation wouldn't work. I've provided specific reasons for why partial knowledge not only doesn't solve those problems, but in fact makes those problems worse. I've provided specific reasons for why opportunity cost not only doesn't solve those problems, but in fact makes those problems worse. And all these arguments assume everyone has perfect knowledge of what they want to allocate.
Just repeating the terms partial knowledge and opportunity cost is no answer to these arguments. Saying that shortages exist and we need to convince each other that they're important is no answer to these arguments.
I'm more than willing to talk these things through. It's fun! But if you're not interested, than I guess that's it. Thanks for providing a space to discuss some ideas that don't usually get discussed.
Well...we're really on different pages here. What you brought up was not at all unique. Did you read the other comments on FEMA? Those people also accused taxpayers of being myopic.
DeleteAlso, can you please quote the part where I mentioned anything about employees of GOs sustaining their GOs existence? I'm pretty sure I didn't discuss that on the page on Unglamorous but Important Things. Perhaps I mentioned it on one of the pages that I linked to?
We're also really not on the same page when it comes to partial knowledge and opportunity cost. Our definitions of these two concepts are polar opposites if you're arguing that partial knowledge and opportunity cost somehow proves that 538 congresspeople should spend 150 million people's money.
Can you please link me to your sources for the definitions of the two concepts? My sources for the definitions of the concepts are Bastiat's essay on the Seen vs the Unseen and Hayek's essay on the Use of Knowledge in Society.
Both those essays offer clear and specific arguments against other people spending your money for you. Libertarians use Bastiat's and Hayek's concepts to argue against taxes...while I use their concepts to argue against congress operating as our personal shoppers. Whatever the tax rate is...my priority is the efficient allocation of public funds.
Of course I'm interested in discussing these ideas...but if our discussion is to be at all productive then we really need to be on the same page when it comes to the definitions of these fundamental concepts.
W/r/t the FEMA thing. Yeah, I misunderstood a bit what you're getting at with the format of that post. The link took me straight to Swit's proposal in a debatepolitics.com thread and I thought you were endorsing that proposal. That's where the misunderstanding about self-sustaining GOs came from.
DeleteSo, having cleared that up and re-read the threads you link, nothing on your post or the forums you link to actually address what I'm talking about with disaster relief. Human beings just plain underestimate the need for disaster protection. It's just an empirical fact about humanity. It's like the fact that we get an extra surge of dopamine when we see people punished for wrongdoing. It's who we are.
So the process of everyone sharing and acting on their partial knowledge about disaster relief and everyone getting up to speed on whether disaster relief is worth the opportunity cost will fail. The partial knowledge concept doesn't do the work you want it to do if there's a systematic bias in everyone's partial knowledge. And people can't adequately judge whether their allocation of disaster relief is worth more or less than the opportunity cost when there's a systematic bias lowering the worth of disaster relief. Citizen allocation of taxes won't result in efficient levels of disaster relief.
I didn't see anything you pointed to that argued with what I'm talking about here. If I'm wrong, please point it out.
W/r/t other stuff: I've been using the exact same definitions of partial knowledge and opportunity cost as you have. If you think that's not true, demonstrate it. Explain how your concept is different from my concept. If you think my arguments for why partial knowledge and opportunity cost don't create efficiency but in fact create inefficiency, demonstrate it. Make an argument. Engage in my reasoning. Don't just say we're not using the same concepts. I believe we are, and I said so as I was making my points. I could repeat myself, like I did above when re-iterating the disaster relief problem, and I guess I will if you feel that's necessary. But everything I would argue to demonstrate that we're using the same concepts is in my preceding comments.
Here's my response...Partial Knowledge and Opportunity Cost
Delete