Wednesday, March 19, 2014

Divining The Benefit Breakdown

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Reply to reply: Block vs Flow

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People assign other people the task of making decisions for them on many subjects they have no information about. - csbrown28
How familiar are you with the work of Nobel Prize winning liberal economist Paul Samuelson? What about the work of Nobel Prize winning market economist James M. Buchanan? How well do you understand the opportunity cost concept? Do you thoroughly grasp the implications of partial knowledge?

I have far more information than you do about economics. What I showed you wasn't even the tip of the iceberg. So do you want me to make a decision for you about pragmatarianism? Do you want me to decide for you how much of your time/money/energy you allocate to pragmatarianism? Let me know how you spend your time and I'll let you which uses can be sacrificed.

Right now you and I have a relationship. Here we are exchanging our limited time and perspectives with each other. Given that we're choosing to sacrifice the alternative uses of our time...it stands to reason that we each derive a certain amount of benefit from our relationship. Can you predict how long this will last? I sure can't. I didn't even predict that this relationship would begin.

How would you react if I told you that I'm not going to let you decide when this relationship ends? If I could somehow actually prevent you from ending our relationship...it wouldn't be a problem as long as you derived quite a bit of benefit from our interaction. So your inability to leave becomes a problem when the amount of benefit you derive starts to decrease.

From the Wikipedia entry on Albert O. Hirschman's book Exit, Voice, and Loyalty...
The basic concept is as follows: members of an organization, whether a business, a nation or any other form of human grouping, have essentially two possible responses when they perceive that the organization is demonstrating a decrease in quality or benefit to the member: they can exit (withdraw from the relationship); or, they can voice (attempt to repair or improve the relationship through communication of the complaint, grievance or proposal for change).
From the book itself...
The distinguishing characteristic of [public] goods is not only that they can be consumed by everyone, but that there is no escape from consuming them unless one were to leave the community by which they are provided. Thus he who says public goods says public evils. The latter result not only from universally sensed inadequacies in the supply of public goods, but from the fact that what is a public good for some - say, a plentiful supply of police dogs and atomic bombs - may well be judged a public evil by others in the same community. It is also quite easy to conceive of a public good turning into a public evil, for example, if a country's foreign and military policies develop in such a way that their "output" changes from international prestige to international disrepute. - Albert O. Hirschman, Exit, Voice, and Loyalty
There are words in that quote that are italicized in the original...but you can't see which words because this forum italicized the entire quote. As you can see here...Not Italicizing Quotes Would Increase Our Wealth... I voiced my concern. But clearly it's not a big enough concern for me to exit from this forum.

Right now you're telling me that there are situations when it's ok for the exit to be blocked. Clearly you feel that this right here right now is not one of them. I'm sure you want to be free to exit from our relationship. And of course I also want you to have that freedom.
What do we want with a Socialist then, who, under pretence of organizing for us, comes despotically to break up our voluntary arrangements, to check the division of labour, to substitute isolated efforts for combined ones, and to send civilization back? Is association, as I describe it here, in itself less association, because every one enters and leaves it freely, chooses his place in it, judges and bargains for himself on his own responsibility, and brings with him the spring and warrant of personal interest? That it may deserve this name, is it necessary that a pretended reformer should come and impose upon us his plan and his will, and as it were, to concentrate mankind in himself? - Frédéric Bastiat
In the US we have a mixed economy...we have a market economy in the private sector and a command economy in the public sector. In the private sector people are free to enter into and exit from any relationships. Not so in the public sector...
But in the case of PGs they may not have an avenue for criticism nor a feasible exit opportunity. They may be compelled to consume a particular good. Therefore, it is important to ascertain whether a good’s publicness in form goes hand in hand with publicness in substance – actual enjoyment of the good by all. - Inge Kaul, Public Goods: Taking the Concept to the 21st Century
In a pragmatarian system, people would be able to exit from specific government organizations. However, unlike anarcho-capitalism, people would not be able to exit from the public sector. Taxes would still be compulsory.

Should taxes be compulsory? Unlike with private goods, people can benefit from public goods without paying for them. So I don't think it's unreasonable for taxes to be compulsory. It's still a block though. It definitely limits input. Like I said in the OP...every appropriate block has an optimal allocation that can only be determined by free flow. In a pragmatarian system...taxpayers would be free to enter into and exit from relationships with congress and the IRS.

Right now I'm using society's limited resources to supply pragmatarianism. How many resources am I using? Not even a drop in the ocean. But that would change if more people started "buying" pragmatarianism. And that would only happen if people derived a benefit from doing so. So the amount of resources allocated to an activity is determined by the amount of benefit that the activity produces. More benefit means more resources.

The alternative is to believe that somehow planners can divine the benefit breakdown and allocate resources accordingly. If, in the absence of your input, planners can know how much benefit you derive from any given activity then there's absolutely nothing wrong with your input being blocked.

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