Wednesday, April 16, 2014

Value Deviation From The Crowd

Reply to: Is This Forum A Market?

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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 though...you'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 though...in 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 funding...is 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.    

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