Friday, November 30, 2012

Civic Crowdfunding

Here I've been for years and years...and years...spending so much of my time...sacrificing so many other priorities...all in order to try and persuade people that allowing taxpayers to directly allocate their taxes would be infinitely better than sliced bread.  All that work has paid off though because we are now on the path to pragmatarianism.  Err...actually...I really can't claim even the tiniest bit of credit.

Who gets all the credit?  Kickstarter.  My only consolation is that they did not intentionally set us on this path.

But it's entirely possible that I'm reading into things.  So I'll share a bunch of evidence...you can look it over and let me know whether I'm being tricked.

In a nutshell...Kickstarter's well publicized success gave birth to civic crowdfunding.

What's civic crowdfunding?  In the trending sense...it's where you go to a privately owned website...browse among various public projects...and donate any amount of money to the projects that you deem to be worthy.  In some cases only cities themselves can submit projects...but anybody can start and sign petitions for new projects.

In order to try to and grasp at least some micro-credit for this trend...or at least some vague association...I created "stubs" on Wikipedia for civic crowdfunding and the most prominent companies...


If you look over the references for each entry...you'll notice that all of them are from this year.  So 2012 is momentous in that it marks the birth of civic crowdfunding.

Only a small handful of projects have been successfully funded...and I'm guessing that Spacehive might get credit for helping to fund the very first project...a community center in South Wales.

Will this platform take off?  I sure hope so.  The civic crowdfunding concepts that are being brought up are equally applicable to pragmatarianism.

More than a few times I've asked people whether it would make any sense to force donors to PETA and donors to the NRA to pool their resources and elect representatives to divvy up the pool between the two organizations.  From articles on civic crowdfunding....
Your community is holding a referendum on a proposed bond offering, the proceeds of which would be used to widen a clogged road and expand a local school. You're all for relieving the traffic congestion, but aren't particularly interested in the school project. A neighbor, on the other hand, leads a local parent group and is passionate about relieving school overcrowding, but she works from home and the street project isn't important to her.  No matter how the vote turns out, neither of you will be entirely satisfied. - Charles Chieppo, Crowdfunding: a New Way to Get Things Done in Government
The next morning I had breakfast with Patrick to talk about something else entirely. We were at YJ's, our neighborhood's favorite snack bar and source of countless innovations. He was in the middle of explaining a recent bond deal. A neighbor overheard and began to talk to him about the problem with that particular bond deal. She didn't vote for it because it lumped much needed downtown sewer repairs together with civic amenities she didn't want to pay for, like new animals for the zoo. On the other hand he wasn't very concerned with the sewers but loves taking his daughter to the zoo. It became sort of heated so I went about eating my egg sammy and it finally clicked - a way for people to vote with their dollars for the civic projects they care about. - Jase Wilson,  Vote With Your Money With Kansas City Startup Neighborly Interview
People voting with their dollars is central to the idea of allowing taxpayers to choose where their taxes go.
Many of our greatest public spaces – including several large parks in Manchester – were funded through public subscription, as were plenty of statues and monuments in our towns and villages. We hope to revive that tradition, empowering communities to transform where they live by voting for projects they like with their wallets. - Chris Gourlay, How to crowd-fund community projects
This has the potential to transform the way government projects and priorities are determined, go a really long way to making government more accessible, making the budget process more participatory, and using technological tools to allow citizens to put their money where their mouth is and vote with their dollars. - Jordan Rayner, In Philadelphia, an Experiment in Funding Civic Projects
Dollar voting is the same concept as earmarking your dollars...
Cynics may wonder why a person would want to just "give'' the government more of their hard-earned money, however, Raynor reminds that this is the first time in history that a person can earmark his/her own dollars. Think of the opportunities to support things you'd like to see in the Tampa Bay region or in your own hometown. - Nathan Schwagler, Citizinvestor: Crowdfunding Local Projects, Tampa
Why is this important? Raynor, a sixth-generation Tampanian, believes this is important because: "If we are successful this will completely disrupt the way that the government budgeting process works, and it will -- for the first time -- give citizens the ability to earmark dollars around where their money is spent.'' - Nathan Schwagler, Citizinvestor: Crowdfunding Local Projects, Tampa
Jordan Rayner with even more awesomeness...
We fundamentally believe that citizens don’t have an issue with how much they pay for government services. They just want more control over where their dollars are going. That’s a really important distinction. - Jordan Rayner, Citizinvestor: Crowdfunding For Community Projects
Here's where it gets really good....
The question is whether something like Citizinvestor could actually offer a full alternative to taxation, providing more choice and accountability in the process. Rayner doesn’t think the model could be used for basics like police, fire, or water. But he does think "there is a place for a service to make government work more like a vending machine, where I get to choose which parks and pools I want to build." - Ben Schiller, Citizinvestor: Crowdfunding For Community Projects
Except, Rayner only sees the first step.  Which is perfectly fine.  A step in the right direction is progress...
Here’s something I’ve been thinking about a little bit, but not had the time to game out: what if we took participatory budgeting one step further and allowed people to choose how they allocated some percentage of their tax dollars? - Catherine Bracy, Comment on How do we make civic crowdfunding awesome?
So what do you think?  Are we on the path to pragmatarianism?

See also: An Economic Critique of Peer Progressivism

Wednesday, November 21, 2012

The Taxpayer is King


Last year Rep. John Campbell (R-Calif.) proposed legislation that would make it easier for people to donate money to the US government.  He called it the "Put Your Money Where Your Mouth Is Act".  Coincidentally I recently created a Wikipedia entry for the same expression...put your money where your mouth is.  Unfortunately the bill seems to only have a 1% chance of being enacted.

It's a really great idea though so I sent an e-mail to Rep. Campbell.  Unfortunately, I forgot to read the small print (it really wasn't that small).  Here was the automated message I received...
Your zip code indicates that you are outside of the 48th District of California.  Regrettably, I am unable to reply to any email from constituents outside of the 48th District of California.  Click Here to return to my home page.
Eh.  I'm only an hour away from Orange County.  "Close enough" shouldn't just count for horseshoes and hand grenades...it should also count for political representation.  Anyways, I decided to just post the letter here...

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Greetings,

I really liked your "Put Your Money Where Your Mouth Is Act" so thought I'd share a proposal based on the same concept.  It's called tax choice.  It would give taxpayers the option to choose which government organizations they give their taxes to.  Here's the Wikipedia entry I created for the concept...
http://en.wikipedia.org/wiki/Tax_choice

One topic that frequently comes up is the issue of granularity.  That got me thinking about whether taxpayers might want the option to give their taxes to specific congresspeople.  People who voted for you could give their taxes to you...and you'd have complete discretion over how you spent their taxes in the public sector.  If they were happy with their ROI then they'd continue giving their taxes to you.  If not...then they'd just give their taxes to another congressperson or shop for themselves.

Did you know that there are 3,520,000 google search results for "the customer is king" and only 55 results for "the taxpayer is king"?  That's a problem.

So nothing would be a stronger signal of your genuineness than proposing the Taxpayer is King Act.  Go big or go home...right?

Cheers,
Carlos

Monday, November 19, 2012

Will Noah Smith Sing My Praises?

Hmm...if conservatives could make me a movie "pamphlet" that made me sympathize with $300k/yr earners who get taxed too much, I'd sing their praises too... - Noah Smith, Why I love Michael Moore
Here are a few passages that I shared in my recent critique of liberalism...with a few new ones thrown in for added value...
In other words, people will start buying something in large numbers if it solves a big problem for them. But most first-world problems—needing an easier way to record your favorite TV programs or keep track of what’s in your fridge—just aren’t that pressing. In developing countries, on the other hand, technology can transform lives. - Christopher Mims, How a $20 tablet from India could blindside PC makers, educate billions and transform computing as we know it
Is it a problem when you don't feel good about your own beliefs? Yes. Are you willing to pay Moore to solve this problem? Yes. Am I?  No.  It should be clear that each and every single one of us determines how much money Moore receives.  That's why markets work...we all have the opportunity to vote with our dollars...
The capitalist society is a democracy in which every penny represents a ballot paper. - Ludwig von Mises
For example...
Wal-Mart can’t charge more; if it does, its customers will go elsewhere. The same is true of Target and Costco. In a sense, Wal-Mart is the elected representative of tens of millions of hard-bargaining shoppers, and, like any representative, it serves only at their pleasure. - James Surowiecki, The Customer is King
also...
You might say, “That’s okay, Williams, if you have enough dollar votes. But what about poor people?” Poor people are far better served in the market arena than the political arena. Check this out. If you visit a poor neighborhood, you will see some nice clothing, some nice cars, some nice food, and maybe even some nice homes—no nice schools. Why not at least some nice schools? The explanation is simple. Clothing, cars, food, and houses are allocated through the market mechanism. Schools are allocated through the political mechanism. - Walter E. Williams, Where Does Your Vote Really Count? 
The market mechanism helps us understand that all our shopping decisions are indirectly responsible for American jobs being shipped overseas.  When American jobs are shipped overseas...we end up with more affordable products and people in developing countries end up with better opportunities...
These improvements have not taken place because well-meaning people in the West have done anything to help--foreign aid, never large, has lately shrunk to virtually nothing. Nor is it the result of the benign policies of national governments, which are as callous and corrupt as ever. It is the indirect and unintended result of the actions of soulless multinationals and rapacious local entrepreneurs, whose only concern was to take advantage of the profit opportunities offered by cheap labor. It is not an edifying spectacle; but no matter how base the motives of those involved, the result has been to move hundreds of millions of people from abject poverty to something still awful but nonetheless significantly better. - Paul Krugman, In Praise of Cheap Labor
It's not an edifying spectacle?  How could good intentions with negative consequences possibly be more edifying than selfish intentions with positive consequences?  
Rising wages in emerging markets and higher shipping costs are also closing the cost gap between developing markets and the United States. - Scott Malone and Ernest Scheyder, Outsourcing Losing Its Allure As China Costs Soar
Here's the basic problem with the large majority of liberals...
The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers. - Paul Krugman, In Praise of Cheap Labor
They just don't think things through.  Here's how they think...
Economics can establish that a man’s marginal utility of money diminishes as his money-income increases. Therefore, they concluded, the marginal utility of a dollar is less to a rich man than to a poor man. Other things being equal, social utility is maximized by a progressive income tax which takes from the rich and gives to the poor. This was the favorite demonstration of the “old welfare economics,” grounded on Benthamite utilitarian ethics, and brought to fruition by Edgeworth and Pigou. - Rothbard, Toward a Reconstruction of Utility and Welfare Economics
Yet what would they realize if they thought things through?  They'd realize that, compared to people in developing countries...we are filthy rich.  Yet...how many liberals sing the praises of fat-cat capitalists who give the jobs that they created to poor people in developing countries?

Instead, Noah Smith wants to sing the praises of the guy who financially benefits from criticizing capitalism...
I'm a millionaire, I'm a multi-millionaire. I'm filthy rich. You know why I'm a multi-millionaire? 'Cause multi-millions like what I do. That's pretty good, isn't it? - Michael Moore  
People voting with their dollars isn't just pretty good...it's f'ing awesome.  Markets work because we all have the freedom to put our money where our mouths are.  This also explains exactly why the government does not work.

Even though I fundamentally disagree with Michael Moore...I want him to have the freedom to put his taxes where his mouth is.  Why?  Because that's the key to prosperity, abundance and progress.

Thursday, November 15, 2012

John Holbo's Critique of Libertarianism

For those of you who haven't been following along at home...John Holbo is a liberal philosopher over at the Crooked Timber website.  He's kind of a tricky guy...but in a fun way.  For example...he tricked me into believing that he supported allowing people to sell their votes.  It turned out that he really didn't support the idea...but I enjoyed our discussion nonetheless...especially when he shared his critique of pragmatarianism.

Holbo's most recent trick was to pretend that he was a Bleeding Heart Libertarian (BHL)...I’m a bleeding-heart libertarian!  He didn't trick me this time though because I had already read on the BHL website that he was planning on doing a guest post.  Learning that he was scheduled to write a guest post was the highlight of my day.  Not trying to take credit here...but a while back I had encouraged him to write a post on the BHL project.  Unfortunately, I can't really say it was the highlight of my day when I finally got a chance to read it.

Did he go in there with guns blazing?  Yes...very yes.  Holbo was spraying snarky bullets everywhere.  Fortunately, he stuck around to respond to many of the comments and the subsequent discussion was far more constructive.  You can read more of the discussion on Jacob Levy's really admirable response...Further to Holbo.

Despite the snark, I gotta give Holbo props for jumping into the lion's den...so to speak.  But the fact that he was invited to write a guest post in the first place...reflects extremely well on the BHL project.  And honestly...I would be willing to bet $20 that the Crooked Timber blog would not invite Peter Boettke, Steven Horwitz, Gary Chartier, Andrew J. Cohen, or Jessica Flanigan to write a guest post there.  This came to mind when I read this comment in response to Holbo's post on the Crooked Timber website...
While I agree with the cheering here, it was a great minefield over there. I kinda agree with the commenter there that says something about guests pooping on our doorstep. So… I am looking forward to the upcoming Libertarian guests here on CrookedTimber. - seth
Ok, so enough back story...and onto my response to Holbo's critique.  I'm not going to pull any punches...it was light on specifics and heavy on paranoia.  This makes it a bit difficult to respond to.  So I've just been gathering a bunch of passages from here and there...and I honestly kind of doubted that I'd really ever organize them and it would just end up as one of my many unpublished drafts.   

Today though, a liberal shared this comment in response to a post of mine...
We know what causes recessions (at least big ones). The income gap produces a small class of very wealthy people who engage in high risk nonproductive "investing", also called bubbles, leading to inevitable collapse, especially if there is little regulation.
See Reich's "Aftershock". It goes into detail - head of joaquin
My response used pretty much the same passages that I had gathered for Holbo.  So the content is the same but my style and tone would be different.  Before I copy and paste my response though...here are a few comments from Holbo that were somewhat specific...
That's an excellent way to put it. Libertarianism as device for locking in your gains. Like regulatory capture. Nice. - John Holbo
Hume22, there are really two separate issues here: one, being consistent in my hermeneutics of suspicion; two, being consistent about justice. Frankly, I'm better at one than two. You can question my motives all you like. I can take it! But I tend to be a hypocrite regarding the high bar of justice. Like most American liberals, I worry more about the American middle-class than about impoverished Africans. It's hard for me to justify that. (I could say something about 'politics is the art of the possible' but that wouldn't fool you, would it? Didn't think so.) - John Holbo
So here's my response.  What I personally say isn't as important as the sources themselves.  Hopefully Holbo will take the opportunity to read each of them thoroughly...Lachmann's essay is especially great for understanding how markets redistribute wealth, Mitchell's paper is the best in terms of understanding regulatory capture and Krugman's article is outstanding for understanding the race to the top.

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We take 10 steps forward...and then one step back...and you use that one step back as an excuse for government intervention. Does the government prevent us from taking one step back? Sure...but it also prevents us from taking 10 steps forward. That's not a recipe for progress.
... an increase in the power of the State ... does the greatest harm to mankind by destroying individuality which lies at the heart of all progress... – Gandhi
How do you become wealthy?
In other words, people will start buying something in large numbers if it solves a big problem for them. But most first-world problems—needing an easier way to record your favorite TV programs or keep track of what’s in your fridge—just aren’t that pressing. In developing countries, on the other hand, technology can transform lives. - Christopher Mims, How a $20 tablet from India could blindside PC makers, educate billions and transform computing as we know it
You're blaming the wealthy for the income gap here in America but you tragically fail to understand that they are narrowing the gap between America and developing countries...
These improvements have not taken place because well-meaning people in the West have done anything to help--foreign aid, never large, has lately shrunk to virtually nothing. Nor is it the result of the benign policies of national governments, which are as callous and corrupt as ever. It is the indirect and unintended result of the actions of soulless multinationals and rapacious local entrepreneurs, whose only concern was to take advantage of the profit opportunities offered by cheap labor. It is not an edifying spectacle; but no matter how base the motives of those involved, the result has been to move hundreds of millions of people from abject poverty to something still awful but nonetheless significantly better. - Paul Krugman, In Praise of Cheap Labor
Rising wages in emerging markets and higher shipping costs are also closing the cost gap between developing markets and the United States. - Scott Malone and Ernest Scheyder, Outsourcing Losing Its Allure As China Costs Soar
Do you think Americans are the only ones who benefit from American innovation? The world benefits from American innovation just like we will benefit from the world's innovations. And you'll be able to thank the greedy capitalist pigs. Except...who these people are is constantly changing...
These economic facts have certain social consequences. As the critics of the market economy nowadays prefer to take their stand on “social” grounds, it may be not inappropriate here to elucidate the true social results of the market process. We have already spoken of it as a leveling process. More aptly, we may now describe these results as an instance of what Pareto called “the circulation of elites.” Wealth is unlikely to stay for long in the same hands. It passes from hand to hand as unforeseen change confers value, now on this, now on that specific resource, engendering capital gains and losses. The owners of wealth, we might say with Schumpeter, are like the guests at a hotel or the passengers in a train: They are always there but are never for long the same people. - Lachmann, The Market Economy and the Distribution of Wealth
As protected firms become less innovative, a country’s overall economic growth may suffer. This is because, as Schumpeter emphasized nearly a century ago, economic growth thrives on “creative destruction.” In a healthy economy, new firms constantly arise to challenge older, less-innovative behemoths. - Matthew Mitchell, The Pathology of Privilege: The Economic Consequences of Government Favoritism
But have you ever asked yourselves sufficiently how much the erection of every ideal on earth has cost? How much reality has had to be misunderstood and slandered, how many lies have had to be sanctified, how many consciences disturbed, how much "God" sacrificed every time? If a temple is to be erected a temple must be destroyed: that is the law - let anyone who can show me a case in which it is not fulfilled! - Nietzsche
The problem is that you're not thinking things through...
But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers. - Paul Krugman, In Praise of Cheap Labor
If you think things through then you'll understand that any step back in the private sector can be offset by 10 steps forward in the public sector. How? Simply by allowing taxpayers to use their own taxes to reward the government organizations that are doing new and better things with society's limited resources.

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Let me add a few more things...

In Krugman's article he begins by talking about people scavenging on garbage heaps.  Here's a photo I took in Afghanistan of a mother and her son on such a garbage heap...

















...which ties into...
Women employed in factories are the only women in the labouring rank of life whose position is not that of slaves and drudges; precisely because they cannot easily be compelled to work and earn wages in factories against their will. For improving the condition of women, it should, in the contrary, be an object to give them the readiest access to independent industrial employment, instead of closing, either entirely or partially, that which is already open to them. - J.S. Mill  
The basic idea is that an entrepreneur could set up a factory in Kandahar and offer the Afghan mother one new option.  If her new option, working in a factory, is better than her currently best option, scavenging, then it stands to reason that she would choose to work in the factory.  
As well might it be said, that of two trees, sprung from the same stock one cannot be taller than another but from greater vigor in the original seedling.  Is nothing to be attributed to soil, nothing to climate, nothing to difference of exposure - has no storm swept over the one and not the other, no lightning scathed it, no beast browsed on it, no insects preyed on it, no passing stranger stripped off its leaves or its bark?  If the trees grew near together, may not the one which, by whatever accident, grew up first, have retarded the other's development by its shade?  Human beings are subject to an infinitely greater variety of accidents and external influences than trees, and have infinitely more operation in impairing the growth of one another; since those who begin by being strongest, have almost always hitherto used their strength to keep the others weak.- J.S. Mill, The Negro Question
Much of Holbo's paranoia surrounded racism...but a sound understanding of how markets work...the idea of solving problems and offering people better options...dispels any basis for such concern...
The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another. – Milton Friedman
Let's imagine that a person who was racist against everybody but Canadians discovered a cure for cancer.  Therefore, he would only employ Canadians and only sell the cure to Canadians.  It does sound less than ideal...but however you spin it...it's still progress.  The Canadians who are employed were given a better option and the Canadians with cancer had a big problem solved.  And yes, I know that Canadians aren't a race of people.

The basic idea is that we can't say that John Holbo has an obligation to solve any problems...big or small...and he doesn't have an obligation to offer the Afghan mother a better option.  Really understanding that we don't have these obligations is key to appreciating it when entrepreneurs (in the broadest sense of the word) actually do solve problems...for any amount of people...and offer any amount of people better options.

The question is...how many Canadians with cancer would engage in ethical consumerism and boycott the company?
Even if right now some dude said 'I'm going to say a bunch of racist stuff but afterwards I'll give you a biscuit' I’d be like that’s a weird deal but I'll take it. Because I hate racism...but I love a good biscuit. - Aziz Ansari

Monday, November 12, 2012

John Quiggin is Writing Hazlitt's Sequel

Breaking news!  The Crooked Timber liberal economist John Quiggin* is writing the sequel to Henry Hazlitt's popular classic...Economics in One Lesson: The Shortest and Surest Way to Understand Basic Economics

Read all about it on Noah Smith's blog...here and here...

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Ken Houghton: John Quiggin - You're writing the sequel to Hazlitt? Will Costco/Amazon offer the two books as a box set?

John Quiggin: I hope so: Hazlitt is still selling well

James M. Buchanan: General-fund financing is analogous to a market situation where the individual is forced to purchase a bundle of goods, with the mix among the various components determined independently of his own preferences. The specific tie-in sale is similar to general-fund financing, that is, nonearmarking.

Derek Thompson: Every year, 100 million homes pay for a bundle of cable channels. Like any bundle, it's hard to see exactly what they are paying for. That is somewhat the point of bundling -- to disguise the true cost of the constituent items.

Bastiat: Treat all economic questions from the viewpoint of the consumer, for the interests of the consumer are the interests of the human race.

Xero: Why not create a market for public goods?

John Quiggin: Opportunity cost is what matters

Xero: Errr...was that a yes?

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*It's entirely possible that there are two John Quiggins and/or I am being pranked.

Friday, November 9, 2012

Opportunity Cost Examples, Passages, Quotes

Here are some passages and quotes on the opportunity cost concept.  I'm always looking to expand my collection so please feel free to share your favorite in a comment.

The opportunity cost concept is important because our spending (time/money) decisions input everything we know and value into the impossibly complex formula that determines how society's limited resources are used/allocated.  This is why markets produce the maximum possible value.  In order to fully appreciate why socialism does not work...the next time you go shopping just disregard everything you know and value.  Put things in your shopping cart that do not even vaguely match your preferences.  For example, if you're a vegetarian fill your shopping cart up with steaks.  

The more you understand the importance/relevance/significance of the opportunity cost concept...the more you'll appreciate the necessity of creating a market in the public sector (pragmatarianism FAQ).

[Update: 7 Feb 2015] For a complete list of quotes/passages please see.. OpCost.

Short and simple...
To get one thing that we like, we usually have to give up another thing that we like. Making decisions requires trading off one goal against another. - Greg Mankiw 
Long and simple...
First, economics is all about individuals. That is because economics is all about choice. We can’t have everything, so we have to choose which things are most important to us: would we prefer a new car, for example, or a summer holiday? To go out with friends, or to relax at home? Invariably, we have to give up one thing (an amount of money or time and effort, say) to get another (such as a new pair of shoes or a tidy garden). These are economic decisions – even when no money is involved. They are questions of how we juggle scarce resources (cars, holidays, company, leisure, money, time, effort) to best satisfy our many wants. They are what economics is all about. - Eamonn Butler, Austrian Economics
In economic terms...
The concept of opportunity cost (or alternative cost) expresses the basic relationship between scarcity and choice. If no object or activity that is valued by anyone is scarce, all demands for all persons and in all periods can be satisfied. There is no need to choose among separately valued options; there is no need for social coordination processes that will effectively determine which demands have priority. In this fantasized setting without scarcity, there are no opportunities or alternatives that are missed, forgone, or sacrificed. - James M. Buchanan
Also described as a "cross road situation"...
By contrast, if a consumer wants a new TV set and a new washing machine and he can afford only one of these without drawing on his savings (which he dislikes), he is in a cross-road situation. He must deliberate until he arrives at a decision as to which course of action he prefers. Thus, while we have reason to assume that preference functions for alternative uses of private funds (including the savings alternative) have some firmness and consistency, our findings raise doubt whether the corresponding concept of a preference function for alternative fiscal policies is fruitful. - Eva Mueller
The complexity of it all...
These extraordinarily complex micro-relationships are what we are really referring to when we speak of “the economy.” It is definitely not a single, simple process for producing a uniform, aggregate glop. Moreover, when we speak of “economic action,” we are referring to the choices that millions of diverse participants make in selecting one course of action and setting aside a possible alternative. Without choice, constrained by scarcity, no true economic action takes place. Thus, vulgar Keynesianism, which purports to be an economic model or at least a coherent framework of economic analysis, actually excludes the very possibility of genuine economic action, substituting for it a simple, mechanical conception, the intellectual equivalent of a baby toy. - Robert Higgs, Recession and Recovery 
As it relates to taxes...
But, besides all this, there is something which is not seen. The fifty millions expended by the State cannot be spent, as they otherwise would have been, by the tax-payers. It is necessary to deduct, from all the good attributed to the public expenditure which has been effected, all the harm caused by the prevention of private expense, unless we say that James B. would have done nothing with the crown that he had gained, and of which the tax had deprived him; an absurd assertion, for if he took the trouble to earn it, it was because he expected the satisfaction of using it, He would have repaired the palings in his garden, which he cannot now do, and this is that which is not seen. He would have manured his field, which now he cannot do, and this is what is not seen. He would have added another story to his cottage, which he cannot do now, and this is what is not seen. He might have increased the number of his tools, which he cannot do now, and this is what is not seen. He would have been better fed, better clothed, have given a better education to his children, and increased his daughter's marriage portion; this is what is not seen. He would have become a member of the Mutual Assistance Society, but now he cannot; this is what is not seen. On one hand, are the enjoyments of which he has been deprived, and the means of action which have been destroyed in his hands; on the other, are the labour of the drainer, the carpenter, the smith, the tailor, the village-schoolmaster, which he would have encouraged, and which are now prevented - all this is what is not seen. - Frédéric Bastiat, The Seen vs the Unseen
As it relates to economic imperialism...
A corollary of maximization is that on the margin, there are always tradeoffs.  The notion that there is no free lunch is central to economics.  The simple, but crucial concept of opportunity cost lies behind much of the ability of economics to extend into other areas.  Sometimes the tradeoffs are subtle.  Prices and costs are not necessarily parameters that are observed in market data, but they affect behavior nonetheless.  Other social sciences do not place the same weight on explicit recognition of the tension between costs and benefits, which reduces the ability of these fields to grapple systematically with social phenomena.  Thinking about tradeoffs gives rise to related thoughts on substitutability.  Economists place emphasis on choice.  Things are not technologically determined.  This is true for consumers and producers alike.  There is no fixed number of jobs.  Firms can trade off between employing labor and capital and workers can choose between labor and leisure. - Edward Lazear, Economic Imperialism
In terms of conservation...
The economic approach stresses the fact that any expenditure always has an opportunity cost, i.e. a benefit that is sacrificed because money is used in a particular way.  For example, since biodiversity is threatened by many factors, but chiefly by changes in land use, measures of value denominated in monetary terms can be used to demonstrate the importance of biodiversity conservation relative to alternative uses of land.  In this way, a better balance between 'developmental' needs and conservation can be illustrated.  To date, that balance has tended to favour the conversion of land to industrial, residential and infrastructure use because biodiversity is not seen as having a significant market value.  Economic approaches to valuation can help to identify that potential market value, whilst a further stage in the process of conservation is to 'create markets' where currently none exist.  Market creation is the subject of a separate OECD initiative (OECD, forthcoming). - David Pearce, Dominic Moran, Dan Biller, Handbook of Biodiversity Valuation A Guide for Policy Makers
From the same source...
Individuals express preferences about changes in the state of the world virtually every moment of the day.  The medium through which they do this is the market place.  A vote for something is revealed by the decision to purchase a good or service.  A vote against, or an expression of indifference, is revealed by the absence of a decision to purchase.  Thus the market place provides a very powerful indicator of preferences. 
I highly recommend clicking through every instance of "opportunity cost" in this source... Handbook of Biodiversity Valuation A Guide for Policy Makers

My favorite...
By preferring my work, simply by giving it my time, my attention, by preferring my activity as a citizen or as a professional philosopher, writing and speaking here in a public language, French in my case, I am perhaps fulfilling my duty. But I am sacrificing and betraying at every moment all my other obligations: my obligation to the other others whom I know or don’t know, the billions of my fellows (without mentioning the animals that are even more other others than my fellows), my fellows who are dying of starvation or sickness. I betray my fidelity or my obligations to other citizens, to those who don't speak my language and to whom I neither speak or respond, to each of those who listen or read, and to whom I neither respond nor address myself in the proper manner, that is, in a singular manner (this is for the so-called public space to which I sacrifice my so-called private space), thus also to those I love in private, my own, my family, my son, each of whom is the only son I sacrifice to the other, every one being sacrificed to every one else in this land of Moriah that is our habitat every second of every day. - Jacques Derrida
How many of you caught the reference to Moriah? That's an example of partial knowledge. Moriah is where Abraham was about to sacrifice his only son Issac.

Here's a Christian's perspective on Derrida's perspective...
It is through the gaze of my extinguished self that I realize the limitations that make scarcity necessary. Through this gaze into my own limitedness - a limit always established by the impending cessation of space and time for me - through this gift of death, I discover in nature the best way to be efficient. Thanks to death I must choose x rather than y. This has become a feature of 'nature' - a demystified 'nature' that bears no possibility of participation in the eternal. This is consistent with capitalism. - D. Stephen Long
Again from Derrida...
Sacrifice will always be distinguished from the pure gift (if there is any). The sacrifice proposes an offering but only in the form of a destruction against which it exchanges, hopes for, or counts on a benefit, namely, a surplus-value or at least an amortization, a protection, and a security. - Jacques Derrida
From the bible...
For what shall it profit a man, if he shall gain the whole world, and lose his own soul? - Mark 8:36
Again from the bible...
For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life. - John 3:16
From Greek mythology...
‘Hercules, (says she,) I offer myself to you, because I know you are descended from the gods, and give proofs of that descent by your love to virtue, and application to the studies proper for your age. This makes me hope you will gain, both for yourself and me, an immortal reputation. But before I invite you into my society and friendship, I will be open and sincere with you, and must lay down this as an established truth, that there is nothing truly valuable which can be purchased without pains and labour. The gods have set a price upon every real and noble pleasure. If you would gain the favour of the deity, you must be at the pains of worshiping him; if the friendship of good men, you must study to oblige them; if you would be honoured by your country, you must take care to serve it. In short, if you would be eminent in war or peace, you must become master of all the qualifications that can make you so. These are the only terms and conditions upon which I can propose happiness.’ - Joseph Addison
The opportunity costs of war...
Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron...Is there no other way the world may live? - Dwight D. Eisenhower
More on the opportunity costs of war from the father of modern economics...
But had not those wars given this particular direction to so large a capital, the greater part of it would naturally have been employed in maintaining productive hands, whose labour would have replaced, with a profit, the whole value of their consumption. The value of the annual produce of the land and labour of the country would have been considerably increased by it every year, and every year's increase would have augmented still more that of the following year. More houses would have been built, more lands would have been improved, and those which had been improved before would have been better cultivated, more manufactures would have been established and those which had been established before would have been more extended; and to what height the real wealth and revenue of the country might, by this time, have been raised, it is not perhaps very easy even to imagine. - Adam Smith, The Wealth of Nations
Price tags....
The price of anything is the amount of life you exchange for it. - Henry David Thoreau
More price tags...
 Wishes cost nothing unless you want them to come true. - Frank Tyger
Sayings....
  1. Actions speak louder than words
  2. Have one's cake and eat it too 
  3. Put your money where your mouth is 
  4. There ain't no such thing as a free lunch 
Funny...
If you combined the time you waste cutting grass with the time you waste shaving your face, we'd be goin' to Venus, you know, we could be doin' whatever. - Jase Robertson (Duck Dynasty)
More popular culture...
The loony music video “Gangnam Style” surpassed two billion views on YouTube this week, making it the most watched clip of all time. At 4:12 minutes, that equates to more than 140m hours, or more than 16,000 years. What other achievements were forgone in the time spent watching a sideways shuffle and air lasso? It took 50m man-hours to complete the “supercarrier” USS Gerald Ford last year. Had people not been watching PSY—the South Korean pop star who released the song in July 2012—they could have constructed three such ships. Alternatively they could have built more than four Great Pyramids of Giza, or another Wikipedia, or six Burj Khalifas in Dubai (the world’s tallest building). The song’s nearest rival is Justin Bieber’s “Baby”, at a paltry one billion views. The opportunity cost of watching PSY’s frivolity is huge, but humanity has at least been entertained. - The Economist, The hidden cost of Gangnam Style 
Creative destruction...
But have you ever asked yourselves sufficiently how much the erection of every ideal on earth has cost? How much reality has had to be misunderstood and slandered, how many lies have had to be sanctified, how many consciences disturbed, how much "God" sacrificed every time? If a temple is to be erected a temple must be destroyed: that is the law - let anyone who can show me a case in which it is not fulfilled! - Friedrich Nietzsche

Libertarian Economics

Here's a list I compiled of important libertarian economic concepts. Feedback on this list would be appreciated. Do you know of any other passages which more effectively/efficiently convey any of these concepts? Are there any important concepts that I have not included?

Scarcity...

The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics. - Thomas Sowell

Opportunity cost...

The concept of opportunity cost (or alternative cost) expresses the basic relationship between scarcity and choice. If no object or activity that is valued by anyone is scarce, all demands for all persons and in all periods can be satisfied. There is no need to choose among separately valued options; there is no need for social coordination processes that will effectively determine which demands have priority. In this fantasized setting without scarcity, there are no opportunities or alternatives that are missed, forgone, or sacrificed. - James M. Buchanan

Human action...

We call contentment or satisfaction that state of a human being which does not and cannot result in any action. Acting man is eager to substitute a more satisfactory state of affairs for a less satisfactory. His mind imagines conditions which suit him better, and his action aims at bringing about this desired state. The incentive that impels a man to act is always some uneasiness. A man perfectly content with the state of his affairs would have no incentive to change things. He would have neither wishes nor desires; he would be perfectly happy. He would not act; he would simply live free from care. - Mises, The Prerequisites of Human Action

Demonstrated preference...

The concept of demonstrated preference is simply this: that actual choice reveals, or demonstrates, a man’s preferences; that is, that his preferences are deducible from what he has chosen in action. Thus, if a man chooses to spend an hour at a concert rather than a movie, we deduce that the former was preferred, or ranked higher on his value scale. Similarly, if a man spends five dollars on a shirt we deduce that he preferred purchasing the shirt to any other uses he could have found for the money. This concept of preference, rooted in real choices, forms the keystone of the logical structure of economic analysis, and particularly of utility and welfare analysis. - Rothbard, Toward a Reconstruction of Utility and Welfare Economics

Incentives matter...

Difficulties and hardships are often but an incentive to exertion: what is fatal to it, is the belief that it will not be suffered to produce its fruits. - J.S. Mill

The Invisible Hand...

The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder. - Adam Smith

Fallibilism...

It follows, then, that a less centralized society has the advantage of a greater diversification of its performance across a larger number of preceptors. This is because diversification here dilutes the impact of the ability, or the lack thereof, of each preceptor on the aggregate societal performance. - Raaj K. Sah

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. - Hayek

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. - Bastiat

Consequences of failure...

For this is the salient point: private organizations, whether for-profit or non-profit, perform or lose their customers or their donors. When a private entity fails to deliver on its promise, or actually causes harm, it is held liable for the failure and pays the damages. When government fails, it gets a bigger budget and even more power. - Mary L. G. Theroux

Supply and Demand...

The instruments of intervention became the tools with which to apply government knowledge. Resources were directed and allocated by the state, by political and bureaucratic decision making, rather than by the elemental forces of supply and demand - forces shaped by the knowledge of those in the marketplace. - Daniel Yergin, Joseph Stanislaw

Partial knowledge...

It must be remembered, besides, that even if a government were superior in intelligence and knowledge to any single individual in the nation, it must be inferior to all the individuals of the nation taken together. It can neither possess in itself, nor enlist in its service, more than a portion of the acquirements and capacities which the country contains, applicable to any given purpose. - J.S. Mill, Principles of Political Economy with some of their Applications to Social Philosophy

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. - Hayek, The Use of Knowledge in Society

It is a world of change in which we live, and a world of uncertainty. We live only by knowing something about the future; while the problems of life, or of conduct at least, arise from the fact that we know so little. This is as true of business as of other spheres of activity. The essence of the situation is action according to opinion, of greater or less foundation and value, neither entire ignorance nor complete and perfect information, but partial knowledge. - Frank Knight, Risk, Uncertainty, and Profit

Other people's money...

There are four ways to spend money. You can spend your own money on yourself. When you do that, why you really watch out for what you're doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well then, I'm not so careful about the content of the present, but I'm very careful about the cost. Then, I can spend somebody else's money on myself. And if I spend somebody else's money on myself, then I'm going to have a good lunch! Finally, I can spend somebody else's money on somebody else. And if I spend somebody else's money on somebody else, I'm not concerned about how much it costs, and I'm not concerned about what I get. And that's government. And that's close to 40 percent of our national income. - Milton Friedman, The 4 Ways to Spend Money

Unintended consequences...

In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil. - Bastiat, The Seen vs the Unseen

Individual foresight...

The resource status of material objects is therefore always problematical and depends to some extent on foresight. An object constitutes wealth only if it is a source of an income stream. The value of the object to the owner, actual or potential, reflects at any moment its expected income-yielding capacity. This, in its turn, will depend on the uses to which the object can be turned. The mere ownership of objects, therefore, does not necessarily confer wealth; it is their successful use which confers it. Not ownership but use of resources is the source of income and wealth. An ice-cream factory in New York may mean wealth to its owner; the same ice-cream factory in Greenland would scarcely be a resource. - Lachmann, The Market Economy and the Distribution of Wealth

If the socialists mean that under extraordinary circumstances, for urgent cases, the state should set aside some resources to assist certain unfortunate people, to help them adjust to changing conditions, we will, of course, agree. This is done now; we desire that it be done better. There is, however, a point on this road that must not be passed; it is the point where governmental foresight would step in to replace individual foresight and thus destroy it. - Bastiat, Justice and Fraternity

There is no need to prove that each individual is the only competent judge of this most advantageous use of his lands and of his labor. He alone has the particular knowledge without which the most enlightened man could only argue blindly. He alone has an experience which is all the more reliable since it is limited to a single object. He learns by repeated trials, by his successes, by his losses, and he acquires a feeling for it which is much more ingenious than the theoretical knowledge of the indifferent observer because it is stimulated by want. - Turgot

Entrepreneurship...

Entrepreneurship is necessary in economic development, therefore, for the quite pedestrian purpose of ensuring a tendency towards the adoption of the socially advantageous long-term capital-using opportunities available. So far from being a kind of exogenous push given to the economy, entrepreneurial innovation is the grasping of opportunities that have somehow escaped notice. - Kirzner, Entrepreneurship & the Market Approach to Development

Heterogeneous activity...

So far as this is the case, it is evident that government, by excluding or even by superseding individual agency, either substitutes a less qualified instrumentality for one better qualified, or at any rate substitutes its own mode of accomplishing the work, for all the variety of modes which would be tried by a number of equally qualified persons aiming at the same end; a competition by many degrees more propitious to the progress of improvement than any uniformity of system. - J.S. Mill, Principles of Political Economy with some of their Applications to Social Philosophy

Market redistribution...

These economic facts have certain social consequences. As the critics of the market economy nowadays prefer to take their stand on “social” grounds, it may be not inappropriate here to elucidate the true social results of the market process. We have already spoken of it as a leveling process. More aptly, we may now describe these results as an instance of what Pareto called “the circulation of elites.” Wealth is unlikely to stay for long in the same hands. It passes from hand to hand as unforeseen change confers value, now on this, now on that specific resource, engendering capital gains and losses. The owners of wealth, we might say with Schumpeter, are like the guests at a hotel or the passengers in a train: They are always there but are never for long the same people. - Lachmann, The Market Economy and the Distribution of Wealth

Creative destructionism...

As protected firms become less innovative, a country’s overall economic growth may suffer. This is because, as Schumpeter emphasized nearly a century ago, economic growth thrives on “creative destruction.” In a healthy economy, new firms constantly arise to challenge older, less-innovative behemoths. - Matthew Mitchell, The Pathology of Privilege: The Economic Consequences of Government Favoritism

The interests of consumers...

Treat all economic questions from the viewpoint of the consumer, for the interests of the consumer are the interests of the human race. - Bastiat, Abundance and Scarcity

Dollar voting...

The capitalist society is a democracy in which every penny represents a ballot paper. - Mises

Foot voting...

The second broad principle is that government power must be dispersed. If government is to exercise power, better in the county than in the state, better in the state than in Washington. If I do not like what my local community does, be it in sewage disposal, or zoning, or schools, I can move to another local community, and though few may take this step, the mere possibility acts as a check. If I do not like what Washington imposes, I have few alternatives in this world of jealous nations. - Milton Friedman, Capitalism and Freedom

Moral value...

Only where we ourselves are responsible for our own interests and are free to sacrifice them has our decision moral value. We are neither entitled to be unselfish at someone else's expense nor is there any merit in being unselfish if we have no choice. The members of a society who in all respects are made to do the good thing have no title to praise. - Hayek

Were the Pyramids a Smart Investment?

Yes, the Egyptians could have used the resources to build steam engines or a moon rocket or any number of things. They didn't, however, and the results still helped stabilize the Egyptian culture for millenia. It worked, and the fact that the Egyptians were probably quite happy to help their god-king in the afterlife by building funerary complexes like pyramids is only a bonus. That simple act of being a net positive, historically, is what matters. - Avenio
Here's my response...

The simple act of not having to eat your children, historically, is what matters...
This eyewitness account comes from Abdel-Latif Al-Baghdadi, a physician/scholar from Baghdad who was in Egypt from 1194 to AD 1200. He reported that people emigrated in crowds and that those who remained habitually ate human flesh; parents even ate their own children. Graves were ransacked for food, assassinations and robbery reigned unchecked and noblewomen implored to be bought as slaves. Al-Baghdadi's account is almost an exact copy of that recorded by Ankhtifi, more than 3000 years earlier. - Fekri Hassan, The Fall of the Egyptian Old Kingdom
Yes, the Egyptians could have used the resources to build steam engines or a moon rocket or any number of things. - Avenio
Any given Egyptian could have used his resources to produce any number of things. He could have produced something and taken it to the market. Would other people have bought whatever it was that he produced? Perhaps? If yes...then he could have hired other Egyptians to help him produce his useful product. If no...then he could have worked for other Egyptians to help them produce their useful products.

A famine in Egypt obviously meant that there was a shortage of food in Egypt. But does that mean that they had a shortage of goods that they could have traded with other countries for food? In the case of ancient Egypt...yeah. They spent their nation's limited resources building the pyramids which had absolutely no trade value. They couldn't eat the pyramids and they couldn't trade the pyramids for food.

Here's an insight into the mentality of a conceited ruler...
Apart from their other characteristics, the outstanding thing about China's 600 million people is that they are "poor and blank". This may seem a bad thing, but in reality it is a good thing. Poverty gives rise to the desire for changes the desire for action and the desire for revolution. On a blank sheet of paper free from any mark, the freshest and most beautiful characters can be written; the freshest and most beautiful pictures can be painted. - Mao Zedong
During the Great Leap Forward...Mao used China's limited resources to try and help China catch up with the rest of the world. Rather than acknowledge and protect the unique information that was already written in each person's mind...he overwrote their information with his own information. The result was an artificial famine which led to the deaths of 20-40 million people.

Carefully and thoroughly read over this passage by Adam Smith...
The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder. - Adam Smith, Theory of Moral Sentiments (1759)
Do you see how this ties into Mao's belief that each of the 600 million Chinese person was a blank page? Mao completely failed to understand the fundamentally important concept that each person has their own principle of motion. Good thing for China though that somebody did understand this fundamentally important concept...the pragmatic consequentialist Deng Xiaoping. The result? Millions and millions of Chinese people were lifted out of poverty.

We've completely fetishized the idea of freedom but few people truly understand its inherent value. Freedom means that nobody prevents you from using your limited resources. If you choose to use your limited resources to produce something that I value...then I will choose to give you some of my own limited resources. The market process is constantly redistributing resources to the people who use society's limited resources for society's maximum benefit.

So what would have happened If Egyptian taxpayers could have chosen which government organizations they gave their taxes to? They would have given their taxes to whichever government organization was producing the maximum benefit for society. Would the Egyptian taxpayers have agreed? When does everybody always agree on everything?

But do we really want all the taxpayers to agree on how our society's limited resources should be used? Do we really want to put all our eggs in one basket? Or do we want to hedge our bets?

We're all unique individuals with our own perspectives. Freedom allows us to use different approaches to tackle different problems. One of Deng Xiaoping's famous sayings was "cross the river by groping for stepping stones." If we want to cross rivers...if we want to successfully overcome obstacles...then we shouldn't limit the expression of our individuality.
 ... an increase in the power of the State ... does the greatest harm to mankind by destroying individuality which lies at the heart of all progress... – Gandhi
Our individuality is the source of innovation, ingenuity and resourcefulness. Markets work because we all have the freedom to give our own limited resources to the people who are using society's limited resources for our benefit.
The capitalist society is a democracy in which every penny represents a ballot paper. - Mises 
We all want more for less which is why the market process leads to an abundance of what we, as a society, value.