Monday, February 17, 2014

Demand Opacity

Another attempt to teach economics to atheists...

Reply to: Public Goodness Survey

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Damarcus, ok, now we've made it to the very point of this thread. Except, if you understood my first and second posts in this thread then you wouldn't have argued that corporations would use tax choice to eliminate competition.

As I failed to explain in my first and second posts...in a tax choice system we'll see just how many people give their taxes to a government organization. This information will make it impossible for there to be public goods that only benefit special interests. For example...

"There are multitudes with an interest in peace, but they have no lobby to match those of the 'special interests' that may on occasion have an interest in war." - Mancur Olson

If there are a multitude with an interest in peace...then they are not going to give money to the DoD if it has an interest in attacking other countries. Therefore, the shape of the demand for the DoD would be deep and narrow. It would have depth but very little breadth. Breadth requires multitudes.

Imagine there's a government organization that finds a way to eliminate war. If there are multitudes with an interest in peace...then the shape of the demand for this government organization would be deep and wide.

The more general the interest, the wider the demand shape. The more special the interest, the narrower the demand shape.

With the current system, we have no idea what the demand shapes look like for each and every public good. I refer to this as demand opacity. The current system creates demand opacity which facilitates exactly the kind of problem you described. Tax choice would eliminate demand opacity by allowing us to truly see the actual demand for each and every public good.

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