Monday, April 28, 2014

Crowd Sponsored Results

There are 5 irrelevant search results for "Crowd Sponsored Results"


The founder of Wikipedia, Jimmy Wales, was inspired by Hayek's essay..."The Use of Knowledge in Society".  The basic concept is that markets utilize information that is dispersed throughout society.  Wales used this critique of socialism (centralized allocation, top down control) to create a website that makes it easy for the crowd to share its partial knowledge.  Wikipedia works because it's based on a solid economic concept.  Not that there aren't a few glitches though.

The internet of the future will also be based on a solid economic concept.  The concept is that actions speak louder than words.  Talk is cheap so what people do should be given far more weight than what they say.  It's pretty much the opportunity cost concept.

Here are some of my recent blog entries on the topic...

Neither the internet nor the government reflects an understanding of this concept. This will eventually change.  My preference is for it to change sooner rather than later.  So here I am.

The primary objective of this entry is to try and facilitate this change.  If people can understand why it's necessary to clarify the demand for web pages...then they should also be able to understand why it's necessary to clarify the demand for public goods.

The secondary objective of this entry is to formally stake my claim to this intellectual property.

Friday, April 25, 2014

Don't Hide Marx Under A Bushel

Alternative title: "In Which Our Hero Marx Is Hidden Under A Bushel"

I'm really loving the expression..."In Which Our Hero..."


Yesterday those Crooked Timber liberals stole a chuckle from me.  It's the third time that they've done so.  Here are the first two times...

1. An Economy Based on Wife Swapping.  Should we have to organize a wife-swapping party every time we need to purchase a blanket?  The Crooked Timber liberals say "no".  But I think that they are protesting a bit too much.

2. Ouch, My Most of Me!!  David Graeber takes a Great White shark bite out of Henry Farrell.

3. Karlo Marx and Fredrich Engels / Came to the checkout at the 7-11

A publisher, Lawrence & Wishart, forced the folks running to remove protected material.  Scott McLemee writes...
Somehow it has not occurred to Lawrence & Wishart that, by enlarging the pool of people aware of and reading the Collected Works, the archive is actually expanding the audience (and potential market) for L & W’s books, including the somewhat pricey MECW volumes themselves, available only in hardback at $25-50 per volume. I’m stressing the bottom line here, given that the press’s decision is rational only on the narrowest conception of it. But a piece of synchronicity involving another CTer underscores just how much the left can learn from, of all things, the sectarian right: 
About the time the Marxist Internet Archive announced that it would be taking down all the MECW material, Corey and I both, by coincidence, were availing ourselves of radically under-priced materials from the enemy’s publishing apparatus. He’d received an order containing dirt-cheap copies of Bastiat from the Liberty Fund, while a day earlier I had downloaded free digital editions of the major Austrian School books on theory of value and the socialist-calculation debate from the Mises Institute website. There’s more to neoliberal hegemony than loss-leader pricing, but as ideological combatants those people know what they’re doing.
Did you chuckle?

Hey Scott McLemee...sing along with me!
This little Marx of mine
I'm going to let him shine
Oh, this little Marx of mine
I'm going to let him shine
This little Marx of mine
I'm going to let him shine
Let him shine, all the time, let him shine 
All around the neighborhood
I'm going to let him shine
All around the neighborhood
I'm going to let him shine
All around the neighborhood
I'm going to let him shine
Let him shine, all the time, let him shine. 
Hide him under a bushel? No!
I'm going to let him shine
Hide him under a bushel? No!
I'm going to let him shine
Hide him under a bushel? No!
I'm going to let him shine
Let him shine, all the time, let him shine. 
Don't let Satan [blow] him out!
I'm going to let him shine
Don't let Satan [blow] him out!
I'm going to let him shine
Don't let Satan [blow] him out!
I'm going to let him shine
Let him shine, all the time, let him shine
Yeah, for sure don't let Satan shrink the pool of people exposed to Marx/Engels...
But the peculiar evil of silencing the expression of an opinion is, that it is robbing the human race; posterity as well as the existing generation; those who dissent from the opinion, still more than those who hold it. If the opinion is right, they are deprived of the opportunity of exchanging error for truth: if wrong, they lose, what is almost as great a benefit, the clearer perception and livelier impression of truth, produced by its collision with error. - J.S. Mill, On Liberty
Peter Boettke would certainly agree... You Have to Read Marx and Understand His Philosophical System to Appreciate What He Said and What Is Wrong With It

What's wrong with Marx?  He believed that it was beneficial to hide Scott McLemee under a bushel.  That's what socialism is.  Input doesn't's blocked.

Right now we have socialism in the public sector.  Scott McLemee can't shop for himself in the public sector.  He can't choose where his taxes go.  He can't boycott war.  McLemee's deep input is blocked.  His light is hidden under a bushel.  As a result, the public sector is dimly lit.

Should McLemee be hidden under a bushel?  No!  We have to let him shine.  Giving McLemee the freedom to directly allocate his taxes would help illuminate the public sector.

If everybody could shop in the public sector...then the public sector would be brilliant.  It would be brighter than the sun.

Bushels be gone!  Satan be gone!  Socialism be gone!  Darkness be gone!

Let the sunshine in!!!

For goodness sake let the sunshine in...
Here the contrast between the past and the present is tremendous. You will recall the wonderful image at the beginning of the seventh book of Plato's Republic: those enchained cavemen whose faces are turned toward the stone wall before them. Behind them lies the source of the light which they cannot see. They are concerned only with the shadowy images that this light throws upon the wall, and they seek to fathom their interrelations. Finally one of them succeeds in shattering his fetters, turns around, and sees the sun. Blinded, he gropes about and stammers of what he saw. The others say he is raving. But gradually he learns to behold the light, and then his task is to descend to the cavemen and to lead them to the light. He is the philosopher; the sun, however, is the truth of science, which alone seizes not upon illusions and shadows but upon the true being. - Max Weber, Science as a Vocation
It is yet more monstrous, then, to see how frequently governments, not content with squandering the substance of the people in folly and absurdity, instead of aiming at any return of value, actually spend that substance in bringing down upon the nation calamities innumerable; practise exactions the most cruel and arbitrary, to forward schemes the most extravagant and wicked; first rifle the pockets of the subject, to enable them afterwards to urge him to the further sacrifice of his blood. Nothing, but the obstinacy of human passion and weakness, could induce me again and again to repeat these unpalatable truths, at the risk of incurring the charge of declamation. - J.B. Say, A Treatise on Political Economy 
It may help to see this point if we think of a modern phenomenon which can be compared with child sacrifice, that of war...  But once it had broken out (or even a little bit earlier) it became a "religious" phenomenon.  The state, the nation, national honor, became the idols, and both sides voluntarily sacrificed their children to these idols....  The fact that, in the case of child sacrifice, the father kills the child directly while, in the case of war, both sides have an arrangement to kill each other's children makes little difference. - Erich Fromm, The Anatomy of Human Destructiveness
Going to war accelerated the move from indirect to direct rule. Almost any state that makes war finds that it cannot pay for the effort from its accumulated reserves and current revenues. Almost all war-making states borrow extensively, raise taxes, and seize the means of combat – including men – from reluctant citizens who have other uses for their resources. - Charles Tilly, Roads from Past to Future
It is worth recalling that Thyssen was one of only two leading industrialists to support the Nazi Party before it became the most powerful party on the political scene. - Germa Bel, Against the mainstream: Nazi privatization in 1930s Germany 
To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical. - Thomas Jefferson
It would seem to be a blatant injustice if someone should be forced to contribute towards the cost of some activity which does not further his interests or may even be diametrically opposed to them. - Knut Wicksell
Individuals who have particularly negative feelings concerning a publicly provided good (e.g. Quakers on military expenditures, Prolifers on publicly funded abortions) have also at times suggested that they should be allowed to dissent by earmarking their taxes toward other public uses. - Marc Bilodeau, Tax-earmarking and separate school financing
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 
Unquestionably Mr. Spencer has the courage of his opinions; for in a chapter entitled The Right to Ignore the State he actually contends that the citizen may properly refuse to pay taxes, if at the same time he surrenders the advantages which State aid and State protection yield him! But how can he surrender them? In whatever way he maintains himself, he must make use of sundry appliances which are indirectly due to governmental organization; and he cannot avoid benefiting by the social order which government maintains. Even if he lives on a moor and makes shoes, he cannot sell his goods or buy the things he wants without using the road to the neighboring town, and profiting by the paving and perhaps the lighting when he gets there. And, though he may say he does not want police guardianship, yet, in keeping down footpads and burglars, the police necessarily protect him, whether he asks them or not. Surely it is manifest—as indeed Mr. Spencer himself elsewhere implies—that the citizen is so entangled in the organization of his society that he can neither escape the evils nor relinquish the benefits which come to him from it. - Herbert Spencer, An Autobiography
Of course just because everyone can be made better off by taxation does not mean that everyone will be made better off. Some people want more national defense, some people want less, pacifists want none. So, taxation means that some people will be turned into forced riders, people who must contribute to the public good even though their benefits from the public good are low or even negative. - Tyler Cowen, Alex Tabarrok, Modern Principles of Economics 
A second point of broad consensus among critics stresses that publicness in consumption must not necessarily mean that all persons value a good’s utility equally, Mendez (1999), for example, illustrates this point by examining peace as a PG. Some policy-makers might opt for increased defense spending in order to safeguard peace. However, this decision could siphon off scarce resources from programmes in the areas of health and education. Other policy-makers might object to such a consequence and prefer to foster peace through just the opposite measure -- improved health and education for all. Especially under conditions of extreme disparity and inequity, the first strategy could indeed provoke even more conflict and unrest, securing national borders by unsettling people’s lives. - Inge Kaul, Public Goods: Taking the Concept to the 21st Century
Only the free market, then, can determine different qualities or degrees of a service. Second, and even more important, there is no indication that for a particular taxpayer, the government is supplying a "service" at all. Since the tax is compulsory, it may well be that the "service" has zero or even negative value for individual taxpayers. Thus, a pacifist, philosophically opposed to any use of violence, would not consider a tax levied for his and others' police protection to be a positive service; instead, he finds that he is being compelled, against his will, to pay for the provision of a "service" that he detests. In short, equal pricing on the market reflects demands by consumers who are voluntarily paying the price, who, in short, believe that they are gaining more from the good or service than they are giving up in exchange. But taxation is imposed on all people, regardless of whether they would be willing to pay such a price (the equal tax) voluntarily, or indeed whether they would voluntarily purchase any of this service at all. - Murray Rothbard, The Myth of Neutral Taxation 
The people feeling, during the continuance of the war, the complete burden of it, would soon grow weary of it, and government, in order to humour them, would not be under the necessity of carrying it on longer than it was necessary to do so. The foresight of the heavy and unavoidable burdens of war would hinder the people from wantonly calling for it when there was no real or solid interest to fight for. The seasons during which the ability of private people to accumulate was somewhat impaired would occur more rarely, and be of shorter continuance. Those, on the contrary, during which the ability was in the highest vigour would be of much longer duration than they can well be under the system of funding. - Adam Smith, Wealth of Nations 
Current practice rising from that conviction leads to strange tactics in allocating benefits from certain public expenditures: Defense is always seen as a good, even in a country embarking on a disastrous war which brings untold suffering. Typically, in studies of expenditure incidence, households are seen to value services for police, and administration at cost, even though they have not the slightest idea as to the amount or costs of resources used on their behalf in these services. Under such circumstances, would not value equal to costs be an extremely unlikely outcome even in those few countries with representative government? And what about those residents of a country who are actively or passively in opposition to the status quo? Do they really benefit from expenditure on internal and external security as the empirical studies always assume? Is it clear that such expenditures even enter into household utility functions? Of consider further: If the community spends twice as much on diplomacy and administration while reducing education expenditures pari passu, is it obvious that there has been no change in total economic value as measured in the national accounts? Extreme assumptions are the usual way to deal with the problems suggested by these situations. But the fact that the assumptions are extreme, suggests that there is something wrong with the usual techniques in allocating benefits from certain general expenditures. - Jacob Meerman, Are Public Goods Public Goods?

Wednesday, April 23, 2014

Paul Krugman Responds To Income Inequality Value Signal

Check out this title...

Paul Krugman – Who Assails Income Inequality – Will Take Quarter-Million-Dollar Job With Income Inequality Institute

Hey Robert Gehl, how awesome is your title?  It's super awesome.  Way more awesome than my title.

The concept is...

In which our hero Krugman responds to the brightest value signal...

More about our hero... (Is This Forum A Market?)...


Is it strange to think of pragmatarianism as a sort of economic incarnation of direct democracy? I've been thinking about that lately, and to an extent it seems to hold up. It's effectively a party list, proportional, direct democracy with an election threshold, and where each individual's voting power is determined by the proportion of tax receipts drawn from that individual. - Orham

It's not strange to think of pragmatarianism (PG) as a direct democracy. Just like it's not strange to think of a market as a direct democracy. Neither is it strange to think of participatory budgeting (PB) as a direct democracy.

However, PB and PG are very different. PB is shallow flowcilitation while PG is deep flowcilitation. And we should all understand that actions (deep input) speak louder than words (shallow input).

If a society is to put an economic democracy in place, this doesn't seem the way to have one. I mean, voting power being determined by one's individual proportion of tax receipts? - Orham

Let's do a bit of substitution...

Voting power = influence over how society's limited resources are used
proportion of tax receipts = proportion of productivity

Making the substitutions in your original sentence...

influence over how society's limited resources are used being determined by one's individual proportion of productivity

Well...yeah. Right?

Productivity can't just stand on its own though. Just because you're extremely efficient at producing poison oak doesn't mean that we should give you all the farm land.

A mind, just like farm land, truly is a terrible thing to waste...but a productive mind only has as much value as society assigns to the product.

Markets give everybody the freedom to go around determining how much other people's thoughts/products are worth.

As a result, if I want Paul Krugman's thoughts on pragmatarianism...then it's going to cost me a lot more than just a penny.

As a result, space in the New York Times is not divided equally. Should it be? Or should Super Krugman have a huge chunk of it? Is it fair for Krugman to have infinitely more space in the NY Times than I have? Why should Krugman have infinitely more influence than I have? Why should Elizabeth Warren have infinitely more influence than I have? Why should Obama have infinitely more influence than I have? What's going on here? Why is my megaphone, by comparison, microscopic?

It seems to me that this would be a serious problem. If we're all voting for pizza toppings, and everyone but me gets a single vote while I receive fifty votes, whose preferred pizza toppings are going to be served? Hope you like anchovies, because I do.- Orham

I do like anchovies.

Let's tweak your scenario. There's 50 of us at a party. We each have a vote. If you end up with 50 votes...would I call shenanigans? Maybe if you cheated.

Would it be cheating if you went around buying votes? I like anchovies too so I probably wouldn't charge you anything for my vote. So, all things being equal, the less somebody likes anchovies...the more you'll have to pay them. But if somebody voluntarily accepts your money in exchange for their stands to reason that the exchange was mutually beneficial.

What if you went around exchanging your epic homemade brownies for votes? What if you went around exchanging skillfully drawn portraits for votes? What if you went around exchanging sexual favors for votes?

If somebody voluntarily gives up one thing (x) for another (y)...then we can conclude that, from their perspective, y > x. This means that in a market, if you ended up with everybody's vote...then it was because everybody else ended up with things that they value more than their vote. So why would we complain about vote trading if the outcome is better as a result?

Whether we are talking about ballot votes or dollar votes, giving people the freedom to exchange votes certainly doesn't subvert the will of the people. On the contrary, it clarifies the will of the people. Deep flowcilitation is the realm of shows us what's beneath the surface.

Allowing Krugman to have infinitely more space in the NY Times than I have doesn't subvert the will of the people. It reflects the will of the people. The question accurately does it reflect the will of the people? More accuracy is certainly better...which is why deep input should always trump shallow input.

If we created a market in the public sector...then Krugman's megaphone would be infinitely larger than my own. This is because nobody is paying me a quarter of a million dollars a year to study income inequality or pragmatarianism or anything else. Neither is anybody giving me a huge chunk of space in the NY Times. Therefore, in a pragmatarian system, Krugman would have infinitely more influence/power/control than I would over how tax dollars were allocated.

The moral of the story is that preventing Krugman from using his large megaphone in the public sector doesn't just block his deep blocks the deep input of the millions of people who have willingly sponsored Krugman's megaphone. The masses have magnified Krugman's influence. The multitude has multiplied Krugman's power. The crowd has clearly deified Krugman. This means that preventing Krugman from shopping in the public sector blatantly subverts the will of the people.


The topic of this blog entry plucked the phrase..."in which our hero..." from my memory.  But I wasn't even vaguely close to remembering the source.  I thought it might have been from a poem.  Then I wondered whether it was from a song.  Surprisingly, I somehow managed to remember that it was from a song by Dntel... "In Which Our Hero is Decapitated by the Evil King"...

Here's the story from the album Something Always Goes Wrong...

"In Which Our Hero Begins His Long and Arduous Quest"
"In Which Our Hero Finds a Faithful Sidekick"
"In Which Our Hero Is Put Under a Spell"
"In Which Our Hero Dodges Bullets and Swords"
"In Which Our Hero Frees the Damsel in Distress"
"In Which Our Hero Is Decapitated by the Evil King"

In a better world...when anybody hears the word "decapitated" they will automatically think "obamerated"...

"In Which Our Hero Is Obamerated by the Evil King"

Would it help if I sent a letter to the Evil King?

Dear Evil King, 
Please don't obamerate Krugman.  We will be worse off if you block his deep input.  

Who is the Evil King?  He's anybody who wants to prevent Krugman from shopping in the public sector.  Except, doesn't Krugman want to prevent himself from shopping in the public sector?  Probably...right?  So Krugman is the hero and the Evil King.

It's self-obameration.

Clearly Krugman doesn't completely obamerate himself though...he partially obamerates himself.

It's partial self-obameration.

Like a man who wants to be chained when it's a full moon?  Krugman is our hero...except when the moon is full...then he turns into a blood thirsty werewolf.  In the absence of strong chains...he would devour all the people that he had previously rescued.

Krugman tells us something like...
In the private sector...I use my powers to help people....but in the public sector...I would have no choice but to use my powers to hurt people.  I can't be trusted in the public sector!  Whatever you do...please prevent me from shopping in the public sector!  It's imperative that you never allow me to allocate my tax dollars.  The results would certainly be catastrophic.  In the private sector I endeavor to fight income inequality...but in the public sector I would fight for income inequality.  
When Krugman is in the private sector he's Dr. Jekyll...a very informed, intelligent and capable person who endeavors to efficiently allocates his resources.  But in the public sector Krugman is Mr. Hyde....a very uniformed, unintelligent and incapable person who intentionally misallocates his resources.

We live in interesting times.  And by that I mean that we live in the Dark Ages.

Thursday, April 17, 2014

Markets: 3V Network - Vet, Validate, Vouch

This recent tax choice study...Are Taxes Beautiful? A Survey Experiment on Information, Tax Choice and Perceived Adequacy of the Tax Burden...received a lot more reddit love than I could have hoped for.  That's...encouraging.

Same thing with my previous blog entry...Value Deviation From The Crowd

Here's a reply to a reply...


Thanks for your thought out response.  I'm terrible with analogies so bear with me.

Based on my fairly considerable research I strongly perceive that congress is blindfolded behind the wheel of a bus that we're all passengers in.  If you want to give the passengers 1% control over the steering wheel...then I would feel 1% safer.  I certainly wouldn't argue against even the tiniest step in the right direction.  But neither would I stop arguing for more steps in the right direction.

Taxpayers really don't need training wheels in the public sector.  This is because they are successfully riding bikes without training wheels in the private sector.  Physics works exactly the same in  both does economics.

In the private sector...if you misallocate your resources...then what happens?  You'll have less resources to allocate.  If you have less resources to allocate...then it's because you misallocated your resources.  Squandering limited resources decreases your influence over how society's limited resources are used.

Shopping is the process by which we all go around and give our positive feedback (money) to the people who are good at riding bikes.  It's a triple "V" mechanism... vouch/vet/validate.  This 3V mechanism is a powerful fail safe device.  Resources are shifted from those who crash to those who don't.

For example, when it comes to our food supply...we really want the most productive farmers to have far more resources than the least productive farmers...and that's exactly what happens.  Farmers who do their homework have far better yields than farmers who don't do their homework.  Without 3V...there's nothing to prevent far too many seeds of grain from ending up in the really wrong hands.

So taxpayers have the 3V stamp of approval.  According to all our spending decisions...they are good at doing their homework.  They diligently researched the private factors that they need to produce the products that we value...and we gave them our positive feedback for doing so.

As it stands...we're shooting ourselves in the feet by preventing taxpayers from shopping in the public sector.  It's like telling a talented painter to only use half the colors.  Or telling a writer to only use words from the first half of the dictionary.  Or telling your gardener to only plant annuals.  Or telling your handy man to only shop in one half of home depot.  Or telling a carpenter not to use a hammer.  Or telling your masseuse not to use her hands.  Errrr.

Why would we prevent a bakery owner from shopping in home depot?  Is he going to buy nails when he should have bought flour?  Is he going to buy a lawnmower when he should have bought an oven?  If we allowed him to shop in the public sector...would he spend his taxes on more drug war when he should have spent his taxes on better roads?

When congress builds a bridge to they really suffer?  Not at all.  They just call it "stimulus".  If a bakery owner spent his taxes on a bridge to nowhere...would he suffer?  Certainly.  So who should be in charge of deciding when and where bridges are built?  The people who have nothing to lose or the people who have everything to lose?  

In summary, if people are good at allocating resources...then we really want them to be able to shop in the public sector.  If people are bad at allocating resources...then there's absolutely no reason to prevent them from shopping in the public sector.  Therefore, everybody should be allowed to shop in the public sector.


A relevant passage...
When high roads, bridges, canals, &c. are in this manner made and supported by the commerce which is carried on by means of them, they can be made only where that commerce requires them, and consequently where it is proper to make them. Their expences too, their grandeur and magnificence, must be suited to what that commerce can afford to pay. They must be made consequently as it is proper to make them. A magnificent high road cannot be made through a desert country where there is little or no commerce, or merely because it happens to lead to the country villa of the intendant of the province, or to that of some great lord to whom the intendant finds it convenient to make his court. A great bridge cannot be thrown over a river at a place where nobody passes, or merely to embellish the view from the windows of a neighbouring palace: things which sometimes happen in countries where works of this kind are carried on by any other revenue than that which they themselves are capable of affording. - Adam Smith, Wealth of Nations
 If we don't want to majorly misallocate roads, bridges, canals, &c....then we have to create a market in the public sector.  Somebody please send the memo to Rachel Maddow, &c 

Wednesday, April 16, 2014

Value Deviation From The Crowd

Reply to: Is This Forum A Market?


We can keep trying.

1. Does the crowd value football more than I do?  Yes, very yes.  I don't value it at all.  Therefore, I will never ever have to worry about funding football.

2. Does the crowd value public healthcare more than I do?  I have no idea.

3. Does the crowd value the environment more than I do?  No way.  For example, I'm the only person in my neighborhood who has a tropical dry forest instead of a lawn.  So, in a pragmatarian system, I would most likely have to worry about funding the environment.

4. Does the crowd value national defense more than I do?  I have no idea.

5. Does the crowd value education more than I do?  I have no idea.

If we created a market in the public sector...then we would have an infinitely better idea what the crowd values.  Here's how I've illustrated this...

If the top of the bar is green, then it means that the crowd values the public good more than you do.  If the top of the bar is tan, then it means the opposite.

From your perspective, there is a...

...surplus of healthcare (a)
...shortage of welfare (b)
...shortage of environment (c)
...surplus of defense (d)
...shortage of NASA (e)
...surplus of education (f)

Clearly you're not going to derive any utility from spending your taxes on public goods that there's a surplus of. This means that you wouldn't spend any taxes on healthcare, defense or education.  This narrows your spending options down to welfare, environment and NASA.  Welfare has the largest shortage so perhaps you'll spend all your taxes on welfare.

As an outside observer...I can't see your utility function.  All I can observe is that you spent all your taxes on welfare.  This means that I can't conclude that you don't value any of the other public goods.  In other words, I can't say that the other public goods don't match your preferences.  The only logical conclusion that I can come to is that welfare is, by far, your biggest priority.    

In reality're probably not going to sit around observing funding graphs.  You're going to live your life and respond to public shortages in much the same way that you respond to private shortages.  If a shortage of milk sufficiently concerns you...then you'll allocate your private dollars accordingly.  If a shortage of defense sufficiently concerns you...then you'll allocate your public dollars accordingly.

Unlike in the private sector the public sector you'll always have the option to give your taxes to your impersonal shoppers (congress).

What's important to consider is that the further people's values deviate from the norm/crowd...the greater they will perceive the shortages to be.  Personally, I'm pretty sure that I'll perceive a huge shortage of environmental protection.  But most people will not.  Most people in a pragmatarian system will perceive that most things are mostly well funded.

The closer somebody is to the norm...the more closely the funding levels will match their preferences...and the less anxiety they'll have regarding the funding of public goods.  The further somebody is from the norm...the less closely the funding levels will match their preferences...and the more they'll toss and turn at night worrying about the adverse consequences of large shortages.

Of course, the mission of every deviant will be to make themselves the norm.  That's exactly what I'm doing right now.  As a pragmatarian (a deviant)...I have reason to believe that there's a huge shortage of pragmatarianism.  My anxiety is that people can't allocate their assets to alleviate or address their anxiety.  But most people, having normal values, think the current supply of pragmatarianism is perfectly fine.  So here I am trying to convince them otherwise.  The more people that I convince...the smaller the shortage...and the more normal pragmatarianism becomes.

Orham's anxiety is, at least superficially, caused by her perception that there would be a large shortage of national defense in a pragmatarian system.  This means that she believes herself to be a deviant.  Or maybe she would prefer to think of herself as exceptional?  When it comes to defense she really the exception rather than the rule?

Hey Orham, global warming is a far more clear and present danger than any foreign threat.  What shall it profit us to win a war but lose the Earth?

See...we could certainly duke it out...and attack each other with pages and pages of facts and figures...but it's not like the loser can allocate their taxes accordingly.  Doesn't that make you nervous?  It really makes me nervous.  Because people can't shop for themselves in the public sector...there's far less incentive to widely disseminate essential information.  Widespread ignorance, rational or otherwise, should make everybody nervous.

What's interesting is that most people reject pragmatarianism on the basis of perceived shortages.  But for most people...the shortages will actually be far smaller than they currently are.  They just don't realize it because they have no idea what the crowd truly values.

Eliminating demand opacity would ensure that shallow input never trumps deep input...
The people feeling, during the continuance of the war, the complete burden of it, would soon grow weary of it, and government, in order to humour them, would not be under the necessity of carrying it on longer than it was necessary to do so. The foresight of the heavy and unavoidable burdens of war would hinder the people from wantonly calling for it when there was no real or solid interest to fight for. The seasons during which the ability of private people to accumulate was somewhat impaired would occur more rarely, and be of shorter continuance. Those, on the contrary, during which the ability was in the highest vigour would be of much longer duration than they can well be under the system of funding. - Adam Smith, Wealth of Nations   
People wantonly calling for wars...that should sound familiar...
As was noted in Chapter 3, expressions of malice and/or envy no less than expressions of altruism are cheaper in the voting booth than in the market.  A German voter who in 1933 cast a ballot for Hitler was able to indulge his antisemitic sentiments at much less cost than she would have borne by organizing a pogrom. - Geoffrey Brennan, Loren Lomasky, Democracy and Decision
People should be free to wantonly call for wars (shallow input)...but if they want their wishes to come true...then they should have no choice but to reach deep into their own pockets (deep input).  This fail safe device will prevent any unnecessary wars.  And since no war is really necessary...pragmatarianism would result in world peace.    

Crowd Flowcilitation

What's the difference between a forum post and a blog post?


Anybody a fan of Edward Sharpe and the Magnetic Zeros (ESMZ)? I sure favorite song is Desert Song but the crowd favorite is Home.

The band's frontman, Alex Ebert, is passionate about helping to encourage and facilitate civic participation. To this end he's launched The New IRS and is in the process of developing SecondGov.

In this video, Ebert discusses both projects. You can read about them here...Change agent: Edward Sharpe frontman prepares to launch SecondGov, a virtual political system with real-world aspirations.

What do you think? Are you going to sign up to be notified when SecondGov goes live? Do you predict whether or not it will have a greater impact than Americans Elect?

I'm definitely planning on becoming a member of SecondGov. It sounds like a really fascinating experiment in facilitating input.

It should be a self-evident truth that allocation systems work better when input/feedback is facilitated rather than blocked. Being able to vote for a representative is certainly better than not being able to vote for a representative. Being able to write your congressperson is certainly better than not being able to write your congressperson. Being able to e-mail your congressperson is certainly better than not being to e-mail your congressperson.

If it makes sense for it to be easy to give a representative your vote...doesn't it also make sense for it to be easy to take your vote away from a representative?

Can you imagine walking up to Elizabeth Warren and taking your vote away from her? Should people be able to do any time? Why would we want to prevent people from doing so?

The trend is clearly to make it easier and easier for people to share their input. This forum is one of many examples. It seems inevitable that this trend will spill over more and more into the public sector.

Civic crowdfunding already facilitates deep input...and SecondGov will facilitate shallow input...along with perhaps BitGov (Correcting Democracy) and/or BitVote.

What's the best analogy to describe why facilitating feedback is better than blocking it? This one is pretty good...
The management of a socialist community would be in a position like that of a ship captain who had to cross the ocean with the stars shrouded by a fog and without the aid of a compass or other equipment of nautical orientation. - Ludwig von Mises, Omnipotent Government
So is this one...
Neither do men light a candle and put it under a bushel, but on a candlestick, and it giveth light unto all that are in the house. - Matthew 5:15
Blocking input is like turning off the lights. If the lights aren't on then we'll be stumbling around in the dark...
Where no counsel is, the people fall: but in the multitude of counsellors there is safety. - Proverbs 11:14
If you're not a big fan of the bible...then you can just think of it as Linus's Law...
given enough eyeballs, all bugs are shallow
And even more towards evolution...
It is sufficient if all firms are slightly different so that in the new environmental situation those who have their fixed internal conditions closer to the new, but unknown, optimum position now have a greater probability of survival and growth. They will grow relative to other firms and become the prevailing type, since survival conditions may push the observed characteristics of the set of survivors toward the unknowable optimum by either (1) repeated trials or (2) survival of more of those who happened to be near the optimum - determined ex post. If these new conditions last "very long," the dominant firms will be different ones from those which prevailed or would have prevailed under other conditions. - Armen Alchian, Uncertainty, Evolution, and Economic Theory
Life is such that we don't know what the future will hold. We don't know what future conditions will be like. Facilitating input allows us to hedge our bets against uncertainty. If an allocation system blocks input...then it's because the architects believe that they have a crystal ball. Or perhaps a perfect compass. Or night vision goggles. Or maybe omniscience.

I certainly don't have a crystal ball...which is why I greatly encourage your input!

Monday, April 14, 2014

Alex Ebert - The New IRS and SecondGov

Every once in a while I search google for "choose where your taxes go" or "decide where your taxes go".  Yesterday, when I did so...I found this article...  Alex Ebert Wants YOU to Decide Where Your Tax Money Should Go.

Turns out that Alex Ebert is the frontman for one of my favorite bands...Edward Sharpe and the Magnetic Zeros (ESMZ).  Clearly I don't usually take the time to learn the names of band members.  I love listening to music but spend my time studying other topics.

My favorite song from ESMZ is Desert Song...but the crowd favorite is by far Home.

It was certainly a wonderful surprise to learn that such a great artist supports such an important cause.  It's far more than a celebrity endorsement though.  What Ebert has done is create a website that allows you to share how you would prefer your tax dollars to be allocated...

The New IRS

This ties into a larger project called SecondGov..."an open online platform where ANYONE can propose, discuss, and vote on virtual policies to solicit change."

To learn more...check out this article by Michael Carney...Change agent: Edward Sharpe frontman prepares to launch SecondGov, a virtual political system with real-world aspirations

I've already signed up to be notified when it launches.  I wonder how many people will participate?  Will SecondGov manage to succeed where Americans Elect failed?

Here's a video where Ebert discusses The New IRS and SecondGov...

And here's a recent video of Townsquare discussing tax choice...

Friday, April 11, 2014


"Flow Facilitation" - 8,210 results
"Flowcilitation" - 2 results
"Flowcilation" - 0 results

If a concept is important then you really don't want to force people to wade through a swamp of irrelevant search results (ie tax choice vs pragmatarianism).  If you want somebody to find the needle, then don't put it in a haystack.  If the needle is already in a haystack, then endeavor to remove it by giving it a unique ID.

Is flowcilitation an important concept?  Yes, very yes.  Facilitating the flow of input improves the answer to the fundamental question... how should society's limited resources be used?

But not all input is equally valuable though.  I have to warn you that the following example might blow your mind.  On Reddit (a flowcilitator), in the econ subreddit, I saw this link that ellak12 shared...

The Huffington Post interview with the economist Ha-Joon Chang had received 897 upvotes and 219 downvotes.

Here's what I found when I read the interview...
So there is no economic theory that actually says that you shouldn’t have slavery or child labour because all these are political, ethical judgments. - Ha-Joon Chang
Was your mind blown?  It really should have been.

There were 897 people who freely gave their positive input to an economist who said that there's isn't an economic theory that defends people's freedom to give input.  Yeah...this is exactly why shallow input should never trump deep input.

Just because shallow input should never trump deep input doesn't mean that we should eliminate shallow input.  Shallow input is extremely useful.  In this case it highlights a huge problem: 80% of people who are interested in economics...and even some professional economists...don't know that there are very strong economic arguments against slavery.  This problem should really scare you because the moral arguments against slavery, by comparison, are extremely weak.  If we want to avoid slavery...then it would really behoove us to ensure that each and every member of each and every society knows the strongest arguments against slavery.

First, incentives matter.  Slaves lack the incentive to maximize their productivity...
Land occupied by such tenants is properly cultivated at the expence of the proprietor as much as that occupied by slaves. There is, however, one very essential difference between them. Such tenants, being freemen, are capable of acquiring property, and having a certain proportion of the produce of the land, they have a plain interest that the whole produce should be as great as possible, in order that their own proportion may be so. A slave, on the contrary, who can acquire nothing but his maintenance, consults his own ease by making the land produce as little as possible over and above that maintenance. - Adam Smith, Wealth of Nations
But if great improvements are seldom to be expected from great proprietors, they are least of all to be expected when they employ slaves for their workmen. The experience of all ages and nations, I believe, demonstrates that the work done by slaves, though it appears to cost only their maintenance, is in the end the dearest of any. A person who can acquire no property, can have no other interest but to eat as much, and to labour as little as possible. Whatever work he does beyond what is sufficient to purchase his own maintenance can be squeezed out of him by violence only, and not by any interest of his own. In ancient Italy, how much the cultivation of corn degenerated, how unprofitable it became to the master when it fell under the management of slaves, is remarked by both Pliny and Columella. In the time of Aristotle it had not been much better in ancient Greece. Speaking of the ideal republic described in the laws of Plato, to maintain five thousand idle men (the number of warriors supposed necessary for its defence) together with their women and servants, would require, he says, a territory of boundless extent and fertility, like the plains of Babylon. - Adam Smith, Wealth of Nations
...and it follows that they lack the incentive to innovate...
Slaves, however, are very seldom inventive; and all the most important improvements, either in machinery, or in the arrangement and distribution of work which facilitate and abridge labour, have been the discoveries of freemen. - Adam Smith, Wealth of Nations
More marionettes means less progress.

Second, input matters.  Slaves, by definition, are blocked from sharing their input on the question of how society's limited resources should be used.  The more input that's blocked, the less correct/valuable the answer will be.

Understanding the importance of incentives and input will help you understand why there's such a significant outcome disparity between command economies and market economies.

Here are a couple relevant comments on flowcilitation.  The first is one that I shared on Daniel M. Rothschild's article...How Uber and Airbnb Resurrect ‘Dead Capital’


It's so much easier to comment on articles than it used to be. Just like it's so much easier to have articles published than it used to be. It's easier for input to flow. Flow is facilitated.

Command economies fail because input is blocked. Markets succeed because input is not blocked. But clearly, when it comes to facilitating flow, there's always room for improvement.

Crowdfunding isn't a recent phenomenon...but crowdfunding websites are. They make it extremely easy to share your deep input on commercial and civic endeavors. Therefore, they are flow facilitators.

What about creating a market in the public sector (pragmatarianism)? How much flow would be facilitated? It would be a flood of input. Yet, it only has 60 likes on facebook. Where's the bottleneck?


Next comment was on this article...The Market: The Only Trustworthy Pollster by Donald Boudreaux...


Excellent article! It's fundamentally important to help people understand this concept. But I'm thinking that it's only one half of the story...

First half: Votes don't accurately reveal what people actually want.
Second half: Voting for what you don't actually want can shift resources away from the things that you truly want. The genie might grant your wishes...but you'll be worse off if he does. The logical result of granting voters' wishes is that we end up with more of the things that we don't actually want and less of the things that we truly want.

If shallow input (voting) doesn't adversely impact the allocation of resources...then there's absolutely nothing wrong with it.

The first half of the story is essential...but the second half is far more compelling. It's the punch line. Unfortunately, perhaps it's not the easiest thing to illustrate.

We all voted for a Lexus and the result is a shortage of food? The resources required to provide everybody with a "free" Lexus had to come from somewhere. And it stands to reason that they were taken from the things that we value more than a fancy ride. So we're definitely worse off when our ballot votes (shallow input) are allowed to trump our dollar votes (deep input).


Ballot voting, Reddit votes, Facebook likes and Youtube thumbs up/down are all examples of shallow flowcilitation.  These flowcilitators give us insight into people's opinions, feelings and sentiments.  This insight is extremely superficial.  It's the tip of the iceberg.  It's the cover of a book.  Dollar voting, on the other hand, is an example of deep flowcilitation.  It gives us insight into people's values.  This insight is extremely deep.  Therefore, when it comes to answering the fundamental question of how society's limited resources should be used...shallow input should never trump deep input.

The fact that people do not have the freedom to choose where their taxes go reflects the fact that the vast majority of people are not aware of the strong economic arguments against blocking input.

Thursday, April 10, 2014

Shallow vs Deep Input

But when your leaders are chosen by popularity, whether through vote or product buying or social buzz, you then have a Cathedral that is of the bazaar. The great secret — this is what the Dark Enlightenment types are morally afraid to face — is not that our elites are bad, but that our elites are bad because they were chosen by our undifferentiated majority. The herd isn't brilliant; it's stupid. Worse than stupid, it's deceptive and dishonest. The bazaar is the enemy, not the cavalry come to save us! - Brett Stevens, The Redundancy of the Dark Enlightenment 

The other day I went to a bazaar. I saw a small rug that I really liked... I asked the vendor whether he accepted votes.  For some strange reason he didn't.

Isn't that weird? The guy only accepted money. He wouldn't let me buy his rug with my words (opinion/sentiment/feeling).  I even tried offering him a thumbs up...both real life and youtube...but he said no deal.  Same thing with facebook likes. He did pause at a reddit upvote though.

See guy, your mistake is lumping markets and democracy together.

In a order to get the rug, I have to sacrifice something that I personally own and my money (blood/sweat/tears).  Spending is deep input.

With voting, on the other hand, I'm simply talking. Talk is cheap. Voting is shallow input.

Our system fails because shallow input trumps deep input.  Words are given more weight than actions.  It wouldn't be so bad if our political leaders were omniscient....but they really aren't.  This means that resources are diverted to less valuable uses.

NRxc ( economics on their bones) people guess that the solution is to eliminate shallow input (voice).  No, the solution is to facilitate deep input on public goods. How? By creating a market in the public sector.  Giving people the freedom to exit within the public sector would clarify the demand for public goods.

Let me tweak Stephen Crane a bit...
Democracy, thou art for suckling children,
Thou art the enlivening milk for babes;
But no meat for men is in thee.
But, alas, we all are babes.
When you're ready to grow up, pragmatarianism has the meat you'll need.

Wednesday, April 9, 2014

Government: Larger, Smaller or Better?

So, I would think the solution would be smaller government, so the 1% have less they can control. A government that taxes less, spends less, and regulates less, offers fewer opportunities for cronyism. Alas, Stiglitz sees the solution as more government: higher taxes, more effective redistribution programs, and more effective regulation. - Randall Holcombe, Joseph Stiglitz: The Price of Inequality
shrinking government, which thus shrinks the power of politicians is the only way to stop cronyism. - Robert Wenzel, Bleeding Heart Libertarian: Koch, Soros and Adelson are Idiots for Spending Money Buying Politicians

If there were only two options on the table...

A. Larger government
B. Smaller government

...then I would certainly choose smaller government.  In other words, in the 2016 presidential elections...if I had to choose between voting for Elizabeth Warren or Rand Paul...then I'd certainly vote for Rand Paul.

On the one hand...everybody wants a free lunch...but on the other hand...consumer choice does have extremely beneficial consequences.  So whichever public goods Rand Paul kicked over to the private sector...I'd hope that the gain in quality/results/effectiveness would more than make up for any loss in volume.  A small volume of effective private welfare is certainly better than a huge volume of ineffective public welfare.
But it's so strange though when you think about it.  Rand Paul would kick certain public goods over to the private sector.  Why?  Because the invisible hand is better than the visible hand.  Except, it wouldn't be the invisible hand deciding which public goods were moved over to the private would be Rand Paul...the visible hand.  If we can trust Rand Paul to pick which public goods should be moved to the private sector...then that sort of defeats the purpose of moving public goods over to the private sector in the first place.

As far as I can would be far more logical to simply create a market in the public sector.  Doing so would allow the invisible hand to clarify the demand for public goods.  This means that the invisible hand would allocate resources in both sectors.  Therefore, pragmatarianism is economically consistent libertarianism. trust ranking looks something like this...

Elizabeth Warren < Rand Paul < Invisible Hand

Except, that really does not convey the intensity of trust.  I trust the invisible hand infinitely more than I would trust Rand Paul.

My question long is it going to take before people acknowledge the existence of a third option?

A. Larger government
B. Smaller government
C. Better government

How many comments do I have to leave on other people's blogs before consumers are no longer forced between a rock and a hard place?

Perhaps one measure of effectiveness is to keep track of how many people make the argument that the government cannot or should not be run like a business.  So I'll conclude with a couple relevant passages...

If a government enterprise is funded through tax dollars, it does not face the same market test as a genuinely private business. The problem is all the more severe if the government grants an outright monopoly to the enterprise. The bureaucrats running it have little reason to cut costs or to please their "customers" if they receive a guaranteed level of funding regardless of their outcomes. In an extra twist of perversion, when a government agency botches its job, it often receives more funding. In this view, government officials waste money and offer shoddy output simply because they can. - Robert P. Murphy, Why Government Doesn't—and Can't—Manage Resources Like a Private Business

Government efficiency proponents make the mistake of viewing the cost of government in the same light as the cost of operating a private business. However, government cannot operate like a business because it isn’t a business.
Government is unconcerned with “profit.” The “cost” of government is equal to the taxes extracted from the private sector to pay for government activities, plus the economic damage caused by extracting resources from the private sector. Taxes are involuntarily obtained through compulsion and force. Regardless of the value a citizen assigns to the services provided by government, a citizen must pay for those services, and at a price set by government. The price one pays for government is primarily a function of political factors, which are only indirectly influenced by economic considerations. - Tad DeHaven, ‘Government Efficiency’

Monday, April 7, 2014

The Demand For Coercion

There are two roads that people can take to reach anarcho-capitalism.  People can take the economic road...or they can take the moral road.  The economic road is certainly the road less taken.

It's quite easy to identify whether somebody has taken the moral road.  When they invariably object to pragmatarianism...they use words like "rape", "theft", "coercion" and "violence".

Today I encountered this objection yet again.  It was the tipping point for me to create a blog entry for my reply.  Now I can simply link any future moral objectors to this post.

Well...ideally, if this post does its job, then I shouldn't have any reason to link to this post in the future.

There's always room for improvement though.  So I thought it might be interesting to track down a few of my replies over the past couple years.



No. This opacity is why we need to leave it to the free market. No central manager, not even one following the votes of a direct democracy, could ever replicate the compounded wisdom of hundreds of millions of people acting in their own interest with their own knowledge of what's best for them in their own circumstances. That's what the second Amendment is for. - erowe1, Are you confident in congress's competence?

It really sounds like you love and appreciate the market... which is a breath of fresh air.  But... I'm not sure if you truly do love and appreciate the market.

The question that we're all debating is whether taxation should be compulsory.

For nearly all of you the answer is a resounding "NO!!!!"

For congress the answer is a clear and definitive "Yes!"

For me, the only pragmatarian on this forum, the answer is "What's the market's answer?"

1. Should taxation be compulsory?

Anarcho-capitalists: No!!!!
Congress: Yes!
Market: ???

What's the market's answer?  We don't know.  Why don't we know?  Because we don't have a market in the public sector.  If we did have a market in the public sector then each and every taxpayer would be able to answer the question for themselves with their own taxes.  That's how a market works.  A market is the epitome of inclusive valuation.  This is why markets provide the most valuable answers.
For some reason you aren't very interested in knowing the market's answer.  It's as if you suspect that the market's answer will differ from your own.  Evidently you think that the market's answer will be "yes".... or even "YES"... or maybe even "YES YES YES YES!!!!!!"

Should I trust your answer or the market's answer?  Given that I love and trust the market.... I prefer to trust the market's answer.  This definitely does not mean that I'll agree with the market's answer.  It just means that it would be the epitome of hubris and conceit to try and bypass, skip or override the market's answer.  In other words... it's the epitome of hubris and conceit to choose for millions of other people.  Choosing for millions of other people is exactly what happens in a command economy.  I hate command economies.

If we create a market in the public sector and taxpayers overwhelming boycott the IRS and congress... then so be it.  The market has spoken.  But I'm open to the possibility that the market will say something else.  I'm a pragmatarian because I'm very interested in what the market has to say.

You seem to love and trust the market... but you don't seem very interested in creating a market in the public sector.  So I don't think that you genuinely love the market.  In other words, you're not a pragmatarian.

Engage in some soul searching.  Decide whether or not you truly love and trust the market.



What you're saying is that the victim could at least choose which person rapes them. No thanks, I'd rather not be raped in the first place. - Liberty_One, Government Success vs Market Success

What you're saying is that you don't want to boycott your rapist. If you don't want to boycott your rapist...then you must enjoy being raped.

Or maybe you think that the IRS is raping you for free? Naw, nobody's that stupid. Are they? Somebody would have to be a complete moron to fail to realize that congress pays the IRS to rape people.

Do you think that the amount of money that congress gives to the IRS accurately reflects the demand for coercion? If so, then you're a socialist. Because if you want to argue that the government supplies the optimal amount of coercion...then that means that you believe that it can supply the optimal amount of defense, milk, laptops and anything else.

Therefore, you're a socialist that enjoys being raped. Or maybe you're a libertarian that hasn't thought things through? Same thing.

In a pragmatarian wouldn't be congress that determines how much money the IRS would be your neighbors. Do you think that your neighbors really want to pay the IRS to rape you? Do you think that the rape of "Liberty One" would be a high priority for them? If so, then what good would eliminating the government do? Getting rid of the government would be as useless as getting rid of guns. Guns don't kill people...people kill people.

Clearly you have no idea what Rothbard had to say about the subject...
A further point: in a profound sense, no social system, whether anarchist or statist, can work at all unless most people are "good" in the sense that they are not all hell-bent upon assaulting and robbing their neighbors. If everyone were so disposed, no amount of protection, whether state or private, could succeed in staving off chaos. - Murray Rothbard, Society without a State
Do you think that your neighbors are hell-bent on raping you? Do you think that there's a huge demand for coercion? If so, then getting rid of the government will simply create a huge vacuum. And markets, just like nature, abhor a vacuum.

Like I said before, pragmatarianism would clarify the demand for public goods. This would allow us to see the true demand for coercion. For all you know, you could simply be tilting at windmills.

First you look, then you leap. First you figure out which tree the cat is in, then you start barking.

The efficient allocation of resources depends on accurate information. Clarifying the demand for public goods would provide us with infinitely more accurate information than we currently have.



That's like saying you give money to your robber, or make love to your rapist. - LeeHyori, What Should The Government Do?

You're an anarcho-capitalist.  With the current system...the government is your enemy.  The government is the thief, rapist and murderer all rolled into one.  In a pragmatarian system...who would your enemy be?  Your enemy would be your neighbor.  If the IRS steals, rapes and murders you...then it would be because your neighbor paid them to do it.

So with the current can shake your fist at the government...but in a pragmatarian could have a talk with your neighbor.

The fact of the matter is...if your neighbor really wants to rape, murder and steal from you that much...then getting rid of the government would be about as effective as getting rid of guns.  Guns don't kill people...people kill people.  And people are pretty resourceful.

Sure, we don't need to implement pragmatarianism in order for you to talk to your neighbor.  But why waste your time talking to your neighbor if they have absolutely no interest in raping, murdering and stealing from you?

Here's the point that you really don't seem to appreciate: you have absolutely no idea what the demand is for coercion.  Well...unless you believe that the current supply of coercion perfectly matches the demand for coercion.  Is that what you believe?  If so, then you believe in socialism.  You believe that government planners can accurately divine exactly how badly your neighbors want to destroy you.



And pragmatarianism forces people to contribute to the tabs. Its just another form of coercion. - Sola_Fide, Nietzsche, Austrians and Creative Destruction

No no no. Pragmatarianism would reveal what the actual demand for coercion is. In other words, you have no idea how much of their taxes people would give to the IRS. If you did know the actual demand for coercion, then you would be omniscient and socialism would be a viable concept. But you are not omniscient, the preference revelation problem is a real problem, socialism is not a viable concept...we have no idea what the true demand for coercion really is.

But do you want to guess what the demand for coercion truly is? Is there a huge demand for coercion? If so, then so much for anarcho-capitalism. If not, then so much for your argument against pragmatarianism. If there's only a small demand for coercion, if only a few people give their taxes to the IRS, then the IRS could not be considered a legitimate public good. Why? Because enough of the people have to truly support (Willingness To Pay) a PUBLIC good in order for it to be considered a PUBLIC good.

So are you omniscient? Do you know what the actual demand for coercion really is? Or do you want to guess what the actual demand for coercion really is? Do you guess that there's a huge demand for coercion? Do you guess that it's the preference of most citizens to rob/eat their neighbors?
A further point: in a profound sense, no social system, whether anarchist or statist, can work at all unless most people are "good" in the sense that they are not all hell-bent upon assaulting and robbing their neighbors. If everyone were so disposed, no amount of protection, whether state or private, could succeed in staving off chaos. Furthermore, the more that people are disposed to be peaceful and not aggress against their neighbors, the more successfully any social system will work, and the fewer resources will need to be devoted to police protection. Murray Rothbard, Society without a State



Don't pay taxes for a year or two then and see how your quote-violence turns into non-quote-violence. - TheRobin, Can Economics Explain Human Sacrifice?

TheRobin, just like a're not thinking things through.  If I stop paying taxes...the people who subject me to violence aren't going to do it for free.  They're going to do it because they are paid to do it.  Who pays them?  Obviously the government...but more specifically...government planners.  They are the ones who determine how much funding each government organization receives.

Everything we know about economics tells us that government planners cannot know the true values of millions and millions of people.  If they could...then all the socialist experiments would have been successful.  Given that they all failed miserably...we know that there's a disparity between how planners distribute public funds and how the market would distribute public funds.

What I'm advocating is that we allow taxpayers to choose which government organizations they give their taxes to.  This would create a market in the public sector.

So if you want to guess that the distribution of public funds would be exactly the same...if you want to guess that taxpayers would give the same amount of funds to the government organizations that engage in violent're indicating two things..

1. that you believe that socialism is a perfectly viable concept

2. that a stateless society would be just as violent as a state society

Saturday, April 5, 2014

Modular Representation vs Monolithic Representation

Not only that, but elected politicians can honestly say that a large group of people chose them as a representative. The Kochs can't say that. - Noah Smith, How should Charles Koch use his power?
Wow.  The Kochs can't honestly say that a large group of people chose them as their representatives?  Seriously?  Is it really possible that Noah Smith, an economist, isn't familiar with the concept of dollar voting?  Or maybe he's familiar with the concept, but he thinks it's hogwash?

Personally, I think it's one of the most important economic concepts.  That's why I've written quite a few blog entries on the topic of representative economics...

...but clearly some people still haven't gotten the memo.  There are certainly exceptions though...
Koch industries and its subsidiaries are expansive—their holdings include everything from gas stations to pipelines, paper products for everyday use, greeting cards, chemicals used to make materials, and the fabric that makes your clothing. 
With an interest in almost everything and status as the number two privately held company in the country–behind Cargill—Koch industries is a behemoth that is hard to avoid. 
But knowledge is power and your dollar is your vote. We can become informed purchasers and refuse to support their political agenda by refusing to purchase their wares. - Rachel Colyer, Sign the pledge: Don't buy these Koch products
Perhaps it might help Smith if we compared the Koch brothers to one of my "favorite" politicians...Elizabeth Warren.

In 2012...1,696,346 people in Massachusetts voted for Elizabeth Warren.  They wanted her to be their representative.  And that's exactly what occurred because Warren's opponent...Scott Brown...only received a measly 1,458,048 votes.

As you might have guessed...not everybody voted.  In 2012...the population size of Massachusetts was 6,645,303 people.  This means that 3,490,909 people didn't vote.  Some of them are were too young to vote (21%) which leaves us with 2,757,819 people who didn't think it was worth it to vote.

Let's break it down...

  • 2,757,819 people didn't want either Elizabeth Warren or Scott Brown to be their representative
  • 1,696,346 people wanted Elizabeth Warren to be their representative
  • 1,458,048 people really didn't want Elizabeth Warren to be their representative
  • 733,090 people were too young to have their voices count

In terms of dollar votes...Elizabeth Warren received $42 million of them.

Now let's take a look at the Kochs...

In many people dollar voted for the Koch brothers?  I don't know.   But we do know how many dollar votes they received... $115 billion.  That's a lot of dollar votes.  It makes sense because they supply quite a few products that serve the interests of many people...

Koch Industry Gasoline: 
Union 76
Koch Industry/Georgia-Pacific Products: 
Angel Soft toilet paper
Brawny paper towels
Dixie plates, bowls, napkins and cups
Mardi Gras napkins and towels
Quilted Northern toilet paper
Soft ‘n Gentle toilet paper
Sparkle napkins
Vanity fair napkins
Zee napkins
Georgia Pacific Building products: 
Dense Armor Drywall and Decking
ToughArmor Gypsum board
Georgia pacific Plytanium Plywood
Densglass sheathing
G/P Industrial plasters (some products used by a lot of crafters)-
Agricultural Plaster
Arts & Crafts Plaster
Dental Plaster
General Purpose Plaster
Glass-reinforced Gypsum (GRG),etc.
Koch Industry/Invista Products: 
COMFOREL® fiberfill
COOLMAX® fabric
CORDURA® fabric
DACRON® fiber
SOLARMAX® fabric
SOMERELLE® bedding products
SUPPLEX® fabric
TACTEL® fiber
TACTESSE® carpet fiber
TERATE® polyols
TERATHANE® polyether glycol
PHENREZ® resin
POLARGUARD® fiber and
LYCRA® fiber
Koch Fertilizer Company's AGROTAIN® nitrogen stabilizer fertilizer products are used around the world to improve nitrogen efficiency and enhance crop productions.

It turns out that I've dollar voted for the Koch brothers.  Therefore, they represent my interests...and the interests of millions and millions of other people.  How awesome would it be to know the actual number of people that dollar voted for the Kochs in 2012?

What's great about the private system of representation is that people don't have to dollar vote for the Koch brothers if they don't want to.  They can boycott them to their heart's content.  For example, Rachel Colyer can engage in ethical consumerism by putting her money where her heart is.  Clearly she doesn't want the Koch brothers to have her she doesn't give it to them.  How absurd would it be if they could spend her money anyways?  Yet, that's exactly what Elizabeth Warren does.

Let's take a look at Massachusetts again.  Out of 6,645,303 people, 1,696,346 people wanted Elizabeth Warren to spend their money.  This leaves 4,948,957 who didn't want Warren to spend their money.  Yet, how many of these people dollar voted on a regular basis?  Nearly all of them.  The problem with our system is that it diverts a large portion of those dollar votes to Elizabeth Warren...despite the fact that most people didn't want her to have them.  How crazy is that?

If those 5 million people in Massachusetts wanted Warren to spend a good portion of their money...then why didn't they vote for her?  Why did they dollar vote for private representatives like the Koch brothers instead?

If the goal is for people's interests to be protected...then the private system of representation provides infinitely better coverage.  At any time, for any reason, you can replace any of your private representatives.  If you're not happy with how the Koch brothers are spending your money...then you can give your money to other representatives without having to convince millions of other people to make the same decision.  If you want to stop buying Brawny...then you stop buying Brawny.   If you want to stop buying every single product produced by the Kochs...then you have that option.

Our private system of representation is modular.  From the Wikipedia entry on modular programming...
This makes modular designed systems, if built correctly, far more reusable than a traditional monolithic design, since all (or many) of these modules may then be reused (without change) in other projects. This also facilitates the "breaking down" of projects into several smaller projects. Theoretically, a modularized software project will be more easily assembled by large teams, since no team members are creating the whole system, or even need to know about the system as a whole. They can focus just on the assigned smaller task (this, it is claimed, counters the key assumption of The Mythical Man Month—making it actually possible to add more developers to a late software project—without making it later still).
Modular representation facilitates marginal improvements.  Brawny can be replaced by Bounty...and paper towels can be replaced by alternative products.  Inferior components can be replaced with superior components.  A multitude of little improvements all add up to far greater progress than occurs with monolithic representation...
Since these policies are bundled together and voters cannot evaluate them individually, the election margin cannot reveal which of these interpretations is correct, nor can the election reveal the specific amount of resources voters want to devote to each of the three policy areas. Yet for political parties to allocate resources to satisfy social preferences, parties must determine which interpretation accurately describes voters’ preferences. For if a party were elected to power because voters wanted the party to alter foreign policy—but not any of the other policies—and the party did not realize this, the party could allocate resources in ways that did not reflect social preferences. - Samuel DeCanio, Democracy, the Market, and the Logic of Social Choice    
Who is more likely to allocate resources in ways that do not reflect social preferences...Warren or the Kochs?  Consider this bit from Warren's famous speech...
There is nobody in this country who got rich on his own. Nobody.  You built a factory out there—good for you! But I want to be clear.  You moved your goods to market on the roads the rest of us paid for.  You hired workers the rest of us paid to educate.  You were safe in your factory because of police forces and fire forces that the rest of us paid for.  You didn’t have to worry that maurauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. - Elizabeth Warren
Now consider this passage by Adam Smith...
When high roads, bridges, canals, &c. are in this manner made and supported by the commerce which is carried on by means of them, they can be made only where that commerce requires them, and consequently where it is proper to make them. Their expences too, their grandeur and magnificence, must be suited to what that commerce can afford to pay. They must be made consequently as it is proper to make them. A magnificent high road cannot be made through a desert country where there is little or no commerce, or merely because it happens to lead to the country villa of the intendant of the province, or to that of some great lord to whom the intendant finds it convenient to make his court. A great bridge cannot be thrown over a river at a place where nobody passes, or merely to embellish the view from the windows of a neighbouring palace: things which sometimes happen in countries where works of this kind are carried on by any other revenue than that which they themselves are capable of affording. - Adam Smith, Wealth of Nations
Who is more likely to spend our money on a bridge to nowhere...Warren or the Kochs?  Who is more likely to spend our money on supplying workers with the wrong education...Warren or the Kochs?  Who is more likely to spend our money on more police than is really necessary...Warren or the Kochs?

Who transports more goods...Warren or the Kochs?  Who employs more workers...Warren or the Kochs?  Who has more to lose from theft...Warren or the Kochs?

It stands to reason that the Kochs should be able to choose where their taxes go.  Compared to Warren... they have far more knowledge and incentive to try and ensure that the public sector supplies the balance of public goods that will maximize the number of dollar votes that consumers give to them.  If the Kochs get the balance of public inputs wrong...then it will be no different than if they get the balance of private inputs wrong.  Whether they misallocate their private dollars or their public dollars (taxes)...consumers will be able to easily replace the Kochs with better representatives.

In are some more passages on the topic...
What is the species of domestic industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can, in his local situation, judge much better than any statesman or lawgiver can do for him. The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. - Adam Smith, The Wealth of Nations
The man who employs either his labour or his stock in a greater variety of ways than his situation renders necessary can never hurt his neighbour by underselling him. He may hurt himself, and he generally does so. Jack of all trades will never be rich, says the proverb. But the law ought always to trust people with the care of their own interest, as in their local situations they must generally be able to judge better of it than the legislator can do. - Adam Smith, Wealth of Nations
It is thus that every system which endeavours, either by extraordinary encouragements to draw towards a particular species of industry a greater share of the capital of the society than what would naturally go to it, or, by extraordinary restraints, force from a particular species of industry some share of the capital which would otherwise be employed in it, is in reality subversive of the great purpose which it means to promote. It retards, instead of accelerating, the progress of the society towards real wealth and greatness; and diminishes, instead of increasing, the real value of the annual produce of its land and labour. - Adam Smith Wealth of Nations
All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society. - Adam Smith, Wealth of Nations