Monday, January 13, 2014

The Persuasion Process is Priceless

"The Persuasion Process is Priceless"

No results found!  What a great discovery!

Reply to: Division of Representation

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Again, I find the premise extremely workable because I've studied economics. What you wrote demonstrates that you don't understand the significance of the opportunity cost concept. Given your example...perhaps you're interested in conservation? If so, then I highly suggest you read this...Handbook of Biodiversity Valuation

How many times is the opportunity cost concept discussed in that book? Why is it mentioned so often?

Let's pretend that there are only two things to spend our money on...producing food and studying spotted elk. If we correctly assume limited funding...then the more money we spend on studying the elk...the less money we'll have to spend on the production of food. More elk information comes at the cost of less food. There's a definite trade-off...and there's always a trade-off.

I think you agree we'd screw ourselves if everybody spent all their money on studying elk. If no money was spent on food we'd all starve to death. So clearly there's some optimal allocation...which is also known as "efficient allocation". That's the distribution of funding which will provide the maximum benefit to society.

We could easily determine the efficient allocation simply by allowing people to decide for themselves how they'll divvy their money between the two options. It's necessary to do this because we can't determine the most valuable allocation for society if we don't receive direct input from each and every citizen. How can we know how much of each good should be supplied if we don't know how much of each good people want more of? People have different preferences, concerns, interests and circumstances. If we didn't then we wouldn't be debating!

In reality, we have far more than just two goods. Where should the resources that are used to study the spotted elk be taken from? They have to come from somewhere. Should they be taken from studying Florida's Ghost Orchid? Should they be taken from studying how to reduce pollution? Maybe they should be taken from the war on drugs? It's a really really really long list to choose from.

Markets work because each and every consumer has the freedom to decide what they'll give up for the things that they want. Without this prioritization...it's a given that society's limited resources are going to be wasted on less valuable uses. They are going to flow the wrong directions.

There absolutely has to be a way to accurately communicate exactly how much value is derived from the various uses of society's limited resources. So we create a market in the public sector and allow taxpayers to communicate just how much value they derive from learning about spotted elk. And chances are good that perhaps you're not going to be happy with the preferences of society as a whole. But how can you complain that society's heart is in the wrong place when you don't even know where it's at?

I want more people to value tax choice. So here I am. Spending my time accordingly. Trying to change the preferences of society. The alternative is anathema. Shall I hack your facebook page and like tax choice for you? No way. The persuasion process is priceless. Here you are participating in it and arguing against its importance.

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