Sunday, March 1, 2015

The Inefficient Allocation Of Competence

Reply to thread: Epiphytes and Economics

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Dywyddyr, it's verging on balls? LOL You guys have strange expressions.

Right now you can't shop in the public sector. Is this a good thing?

Case Incompetent

In this case, then perhaps at first glance it might seem like a good thing that we block you and your bollocks from the public sector. At second glance though... if you're incompetent... then what are the chances that you're going to have a lot of money to spend in the public sector? If each year you have $1,000,000 to spend in the public sector... then I'm going to wonder if you're really that incompetent. If, on the other hand, you only have $100 to spend in the public sector... then do we really need to worry about keeping you out of the public sector? How much damage are you going to be able to do with $100? What are you going to be able to spend it on that's so bad? Are you and every other incompetent person in the country going to spend $100 on the same exact public good? It's strange to imagine incompetent people all spending their taxes on the same exact public good. In order to worry about this scenario we'd have to also strangely imagine that competent people wouldn't adjust their own spending accordingly.

Case Competent

In this case, it wouldn't seem like such a good idea to prevent you from having the option to shop in the public sector. If you're competent... then you're not going to shop in the public sector if you don't really need to. Just like a competent farmer isn't going to shop at a clothing boutique if he doesn't really need to. In case you missed it, shopping in the public sector is entirely optional. You would still have the option to have congress/parliament/whoever spend your taxes for you.

Conclusion

In neither case does it make sense to prevent you from shopping in the public sector.

If we look at the fact that our current system prevents 99.999% of people from shopping in the public sector... then this prevents a lot of competence from helping to determine the supply of public goods. It's the epitome of throwing the baby out with the bath water.

Are there any consequences when we block most our country's competence from the public sector? Sure, we end up with too many competent people being underemployed for lack of better options.

Blocking competence from determining the allocation of resources logically results in the inefficient allocation of competence. To put it differently... if society's resources are stupidly allocated... then it's a given that intelligence is going to be misallocated. To put it more accessibly... if we elected 500 of the country's stupidest people to control the power of the purse... then a lot of smart people would end up doing really stupid things.

So to say that we should prevent people from shopping in the public sector because some competent people don't have as much influence/money as they really should... is like saying that we should prevent people from eating right and exercising because too many people are unhealthy.

Cause: blocking competence from the public sector
Effect: inefficient allocation of competence (competent people being underemployed)

Cause: preventing people from eating right and exercising
Effect: too many unhealthy people

If there aren't any adverse effects of preventing competent people from shopping in the public sector... then there shouldn't be any adverse effects of preventing competent people from shopping in the private sector. Except, you know the latter isn't true... so why do you think the former is?

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