Friday, August 9, 2013

Parrot Sovereignty

In this thread... Pseudo-demand, Pseudo-supply...Silknor wrote...

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That has virtually nothing to do with what I was asking. So lets rephrase. You have the option of living in two societies:
#1 The US as it is now.
#2 InequalityLand. Here, 1% of the population is incredibly wealthy, another 2% are comfortably middle class, and 97% live in abject poverty. But the overall level of production and wealth is 10% higher than in #1.

It's clear that the InequalityLand ranks higher on efficiency (must be all those socialist redistributive policies in the US, holding their efficiency down). Now, if you can pick which society you'd prefer to live in, but you don't know where in the wealth distribution you'll end up (we'll assign you at random), which would you pick?

Personally, I would pick #1. Would you? And if you would as well, why in the world would we approach economic policy caring only about efficiency and consumer sovereignty. So, what's your true preference? The more efficient society? Or the less efficient but more equitable one?

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My reply...

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This reminds me of a terrible critique of pragmatarianism written by two anarcho-capitalists... Pragmatarianism Disproved. It made me laugh because they attempted to demonstrate how a pragmatarian system with a 100% tax rate wouldn't work. But when I asked them to explain how we would end up at a 100% tax rate...they were unable to do so.

How does consumer sovereignty lead to the second option?

Here in Southern California it's kind of the coolest thing. We have flocks of wild parrots that have completely naturalized. Have you ever heard a flock of wild parrots? It's pretty much the noisiest thing. Especially at the butt crack of dawn right outside my open bedroom window when they are swarming the large fig tree that's weighed down with a ton of ripe fruit.

There the parrots are...happy as can be...squawking and squawking and chowing down on fig after fig. Then, in a flash of green, they fly off to who knows where. Maybe to another fig tree? Surely my fig tree can't be the only fig tree that they visit. I wonder how many fig trees they visit? But wherever they go, they deposit fig seeds. During fig season...what's the average amount of seeds that each parrot poops out? What percentage of seeds actually germinate and make it to maturity?

I wonder if you can already see my point here. I'm talking about parrot sovereignty. With this process at work...how could we end up with fig trees that did not match the preferences of the parrots? Why would the parrots eat figs that didn't match their preferences? How could uneaten seeds possibly be dispersed? Given that no two seed grown fig trees are exactly alike, wouldn't the parrots prioritize and eat the figs that provided them with the most bang for their buck?

I'm sure you've heard the expression..."as happy as a kid in a candy store". That expression is applicable to the parrots during fig season. Why is the kid in the candy store so happy? Because there are so many items that match his preferences. Why are their so many items that match his preferences? Because he has the freedom to choose whichever candies match his preferences and candy makers are free to innovate and offer newer types of candies. Less wonderful candies are replaced by more wonderful candies...it's creative destruction that results in more and more value.

Basically, consumer sovereignty will lead us to heaven on earth. Except, not in your scenario. What gives? The next time you're at the mall...step back, sit down and pay attention to the throngs of consumers picking x or y. You won't be the only one doing so. If producers want consumers' money...then they are going to have to produce items that are closer matches to the preferences of consumers.

Am I wrong? Perhaps. If so, then please walk me through a step by step process showing exactly how consumer sovereignty leads us to society #2.

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