Friday, March 6, 2015

Amanda Palmer vs Public Finance





Just learned about that video from this article by Mike Errico... Appraising Amanda Palmer’s New Patreon Campaign.

In the beginning of the video I almost stopped watching it, but I'm glad that I didn't.  Amanda Palmer, who I never heard of before, is a musician who was rejected by her label because her album only sold 25,000 copies.  She created a kickstarter campaign with a goal of raising $100,000.  Instead, she received over a million dollars.

Now she's on Patreon... Amanda Palmer is Creating Art... and she receives over $20,000 for every thing that she creates.

While I was watching her TED talk video... I kept trying to imagine what it would be like if she was in charge of the IRS.  What I able to imagine was pretty darn wonderful.

So I searched my database for passages tagged with "alienated altruism" and found this gem...
Thus we have the gentle, softening, elevating intercourse that should be habitually taking place between rich and poor, superseded by a cold, hard, lifeless mechanism, bound together by dry parchment acts and regulations— managed by commissioners, boards, clerks, and collectors, who perform their respective functions as tasks—and kept going by money forcibly taken from all classes indiscriminately.  In place of the music breathed by feelings attuned to kind deeds, we have the harsh creaking and jarring of a thing that cannot stir without creating discord—a thing whose every act, from the gathering of its funds to their final distribution, is prolific of grumblings, discontent, anger—a thing that breeds squabbles about authority, disputes as to claims, brow-beatings, jealousies, litigations, corruption, trickery, lying, ingratitude—a thing that supplants, and therefore makes dormant, men's nobler feelings, while it stimulates their baser ones. - Herbert Spencer, Social Statics
Honestly I can't help but laugh every time I read this.  In fact, it's entirely possible that this entry was an excuse just to share this passage.  I'm guessing that Spencer probably wasn't talking about rich and poor people having soft gentle sex with each other.  But I could be wrong.

Silliness aside, Spencer perfectly captures the difference between Amanda Palmer's art of asking and the government's "art" of asking.  Another relevant passage...
Calling for the abolition of public relief, Tocqueville lauded private charity for establishing a "moral tie" between giver and receiver. In contrast, impersonal government relief destroys any sense of morality. The donor (read taxpayer) resents his involuntary contribution, while the recipient feels no gratitude for what he receives and inevitably believes that what he receives is insufficient. - Michael Tanner
In this entry that I wrote last year... Razotarianism - Supplementing Public Revenue By Incentivizing Voluntary Contributions... I explored a wide range of ideas regarding how the government might encourage people to donate.  One of my favorites is that every government organization should have a donate button on their website.  Is that really too much to ask?

Here's a relevant comment that I posted on this blog entry by Peter Boettke...Quiz for the Austrian Economists Among Us

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Using a specific example...let's say that the show Firefly was prematurely canceled. Resources were diverted away from the show even though there was sufficient demand. The problem was that the demand was "latent". It was only revealed after the show was canceled. Many people bought the DVD and campaigned on behalf of the show.

As I've argued before...price theory is too narrow. There are certainly situations where we can correctly determine Hayek's "solution" without using prices. The producers of Firefly could have clarified the demand by creating a crowdfunding campaign. This would have allowed each and every fan of the show to decide for themselves exactly how much they were personally willing to contribute/sacrifice in order to keep the show alive. There wouldn't have been one price...there would have been a continuum of "prices". People would have been paying vastly different amounts for the same exact product. It's the same thing with the non-profit sector.

Price theory, as it stands, is not a great prophylactic because it's got a giant hole in it. It doesn't account for the vast majority of situations where we sacrifice in order to try and keep something alive. A better theory would be something like "input theory"...or "positive feedback theory"...or some other better name. Maybe "flowcilitation theory"?

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I'm tagging this entry with "civic crowdfunding".  Is it really "civic" though for people to donate money to support Amanda Palmer?  If we created a market in the public sector... would people be able to give their taxes to specific artists?

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