Sunday, February 16, 2014

Teaching Economics To Atheists

As usual I googled this blog entry's title before publishing and found this...
“I had a few friends in the same class that were angry with me and said I destroyed his freedom to religion, but in reality his actions were unconstitutional and were not related to economics at all,” she explained in her essay. “This was economics class, not Sunday school.”
Sara Elizabeth Sheppard busted her economics professor for talking about religion during class.  Hey Sara...pull up a chair.  Or not.  

When I googled this blog entry's title using quotes...there weren't any results.  This title is kinda silly.  Given that a recent blog entry was titled..."Teaching Economics To Anarcho-capitalists"...it feels like I'm doing a series.  What's next?  "Teaching Economics To Ventriloquists" maybe?

I shared my public goodness survey in the usual places and didn't get much response.  No real surprise there.  Interestingly enough...nearly all the responses came from the atheistforums.  Everybody who responded indicated that they really had no idea what I was going on about.  Maybe people in other forums also had no clue...but for some reason only the atheists voiced their thoughts?

So here is my 3rd...or 4th...or 20th...attempt to teach economics to atheists...

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I'm going to go with a somewhat ironic example.  How many of you have ever attended a typical church service?  When I was a little kid my mother forced me to go each week.  One thing they do during the service is pass offering plates around.  It's a container of sorts...and when it gets to you...you can choose exactly how much money you put in it.

Let's imagine that there's a church with a really small congregation and you're Dian Fossey's atheist grandson.  Instead of studying gorillas in the mist...you're studying christians in the church.  You hide in the rafters with your binoculars, notebook and bag of power bars.  When it comes time for the offering plate to be passed around...you dutifully write down in your notebook exactly how much money each christian puts in the offering plate...

Digit - $0
Rafiki - $5
Uncle Bert - $35
Macho - $0
Icarus - $10

You do this for an entire year.  At the end of the year...you add up how much money each christian contributed to their church...

Digit - $5
Macho - $5
Pancho - $5
Icarus - $10
Linus - $10
Obama - $12
Jerry - $15
Tom - $20
Rafiki - $25
Frank - $25
Pigpen - $25
Blink - $30
Joan - $30
Mary - $40
Frost - $45
Strongbad - $45
Carrie - $50
Pompom - $75
Stan - $80
Brittney - $200
Saya - $350
McLovin - $400
Twitch - $700
Butters - $800
Uncle Bert - $1000

In order to visualize the data...you create a graph...



There you go.  You just visually represented the demand for that church.

What do you think the demand chart would look like for Joel Olsteen's church?  His Lakewood Church is the largest church in America.  Each week an average of 43,500 people attend.  That's between the attendance of baseball games (30,514) and football games (67,604).

If I had to choose between attending a baseball game or a football game or a service at Olsteen's church...I'd definitely choose the service.  That alone doesn't say much because most sporting events bore me to death.  But a while back I accidentally channel surfed right into Olsteen's net.  His delivery is so silky smooth.  It's so seamless and seemingly so sincere.  It doesn't matter if he's a fake...it would be like accusing Kevin Spacey of not truly being the character that he's portraying in a movie.  It doesn't matter how big the disparity is between an actor and his character...a remarkable performance is still remarkable.

We know what the demand is for Olsteen, Spacey and sporting events....but we don't know what the demand is for public goods.  This is a problem.  Demand opacity is the most pressing problem we face as a society.  But the solution is really simple.  We just have to give taxpayers the freedom to choose where their taxes go.  This will eliminate demand opacity.

One concern is that the wealthy will have too much influence.  They will spend their taxes on public goods that screw the middle class and poor.  This concern is ridiculous though because if a "public good" harms most of the public...then it really isn't a public good.  A public good is something that is largely beneficial.  And once people can shop for themselves in the public sector...then we'll clearly see the demand depth/breadth for each and every public good.  Therefore, if a public good only benefits the wealthy...this will become readily apparent...and the public good would be removed from the public sector.  The point of this survey is to determine where that "removal" threshold might be.

Have I helped clarify things?  Or have I mucked things up even more?

Let me try and put it another way.  Imagine that there's a huge city that's only populated by atheists.  For whatever reason, there's not a theist in the city.  Imagine if you went to the bank and asked for a loan to start a church.  What do you think the loan officer would tell you?  "Ah, how brilliant!  You'll have a monopoly!  I wonder why no one else has thought of it before!?"  So the loan officer lends you a million dollars and you start your church.  And of course nobody shows up.  Why?  Because there wouldn't be any demand for a church in a city of atheists.  Errr...well...I guess theists could show up from other cities.  Maybe the absence of churches explains the absence of theists...heh.

The point is...it would be a waste of society's limited resources to build something that there's no demand for.  Just like it would be a waste of society's limited resources to start a war that there's no demand for.  But that's exactly what happens with our current system.   We substitute the actual demand for the guesses of 500 government planners (congresspeople).  But if the guesses of 500 government planners are really that great then we wouldn't need markets.

Markets work because the guesses of entrepreneurs are tested against reality.  Entrepreneurs that correctly guess the demand will make money.  Failure to correctly guess the demand results in bankruptcy.  Our job as consumers is to reward the entrepreneurs who correctly guess what our demands are.  That's what shopping is all about.  So if people can't shop for themselves in the public sector...then the guesses of government will not be tested against reality.

Yes, the guesses of congresspeople will be tested against elections...but voting doesn't reveal demand.  Voting reveals opinions...not values...

1. Should we conserve the Amazon rainforest?  Yes/No
2. How much would you like to donate to conserve the Amazon rainforest? _______

The first question reveals your opinion while the second question reveals your values/priorities/preferences.  It's great to know the public's opinions...but it's infinitely more important to know the public's values.  We can't put society's limited resources to their most valuable uses if we don't know what society truly values.  Shopping reveals values which is exactly why it's imperative that we create a market in the public sector.

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