Friday, March 14, 2014

Block vs Flow

Discussion (context) on:  3 Things That Make Libertarian Heads Explode by Lynn Stuart Parramore

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Xero

Which is better?

A. moving public goods over to the private sector
B. creating a market in the public sector (pragmatarianism)

ajaxthegreat

I'd go with the second one if I had to choose, hands down. But I'm not quite sure just how pragmatic that would be in reality. And this is coming from a strong supporter of direct democracy.

Xero

How pragmatic is it for you to choose which articles you allocate your time to?

Here we are, typing and typing away. What we type gets stored in a disqus database/server. More comments require more servers. More servers require more space.

Your comments help determine how space in Timbuktu is used.

1. You derive value from discussing this topic
2. You sacrifice the less valuable uses of your time
3. Space is allocated accordingly

Basically, your input influences the output. If your input is somehow blocked...then the output will not reflect it. The supply will shift away from your preferences (demand). Shifting away from demand is the destruction of value. Shifting towards demand is the creation of value.

So it's block vs flow.

If you're an American environmentalist...and Brazil is going to vote on whether to conserve or develop its rainforest...should your vote flow accordingly...or should it be blocked? What if the Brazilian EPA (BEPA) is doing an excellent job protecting the rainforest...should your tax dollars flow accordingly...or should they be blocked?

If any taxpayer in any country could freely flow their input (tax dollars) to the BEPA...how much influence would the BEPA have over how space was used in Brazil? Can you imagine BEPA having too much influence? What would that look like? They'd buy all the commercial property and restore it to its natural state? What's wrong with that? They wouldn't be taking the property...they would be buying it. If the owner of some property sold it then we have to surmise that it was a mutually beneficial exchange. What's really important to really appreciate is that it's a mutually beneficial exchange that wouldn't have occurred if the input of taxpayers had been blocked by arbitrary borders.

Of course it's a given that sometimes people will enter the "wrong" input. But if you perceive that somebody is entering the wrong input...then it must be the case that you have some information that influences your perception. If you have pertinent information...then the responsibility is on you to share it. Because people can't be responsible for sharing information that they don't have.

Right now, here I am sharing my information with you. Persuasion is a priceless process.

Are there times when blocking is appropriate? Sure, killing people is block worthy. Why? Because killing people is the ultimate block. No input can flow from dead people. Just like no input can flow from marionettes. But every appropriate block has an optimal allocation. It clearly wouldn't be an optimal allocation for every individual in this world to have as much protection as the American president. So determining the optimal block requires free flow. People's input (tax dollars) should be able to freely flow to any police departments.
The manufacturers first supply the neighbourhood, and afterwards, as their work improves and refines, more distant markets. - Adam Smith, Wealth of Nations
When the buyer goes to the market, he wants to find it abundantly supplied. He wants the seasons to be propitious for all the crops; more and more wonderful inventions to bring a greater number of products and satisfactions within his reach; time and labor to be saved; distances to be wiped out; - Frédéric Bastiat
What would Bastiat say about today's distances? Yet, we still groan at the thought of "long" plane rides. Clearly we still have plenty of distance wiping to do.

But it's really not distance that prevents me from giving my taxes to the Brazilian EPA...it's you...ajaxthegreat! Oh wait, it's not you...it's me...Xero! I'm the one with the information... which is why I'm sharing it with you. Does my work need to be refined and improved? Of course...there's always room for improvement.

Where in the world are public goods being improved? Only in the US? The US has a monopoly on improvements? That makes as much sense as believing that elected representatives have a monopoly on identifying improvements. There's nothing pragmatic about nonsense.

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