Probably the single biggest argument against unbundling cable is that doing so would increase the costs of the individual components. And this is a bad thing because higher prices are always bad for consumers. Right? Wrong, really wrong. Prices are never bad for consumers when they accurately communicate demand. If, for example, consumers are willing to pay higher prices for animal shows... then this would reveal that there's a scarcity of animal shows. Higher prices for animal shows would incentivize producers to create more animal shows. Voila! Shortage solved! Scarcity eliminated! Consumers would have an abundance of animal shows! As a result of this abundance, prices would decrease... and so too would the incentive for producers to create more animal shows.
It's super sad that the gist of this economic explanation really isn't anything new...
It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. - Adam Smith, Wealth of Nations
Einstein defined insanity as doing the same thing over and over but expecting a different outcome each time. Am I being insane by sharing an explanation that was shared a gazillion years ago? Why am I expecting a different outcome? Maybe I'm guessing that most people still haven't gotten the memo? Or perhaps I'm guessing that my own explanation is different enough? Maybe all Smith's explanation lacked was an embedded example? I wish. Sigh.
In my explanation... I used "Voila!" to describe the change in supply. To be fair, perhaps "Voila!" isn't always the most accurate way describe the supply response. But in all cases where "Voila!" isn't so applicable... most, if not all, of the delay in supply response is a consequence of government intervention. For example, minimum wages guarantee that "Voila!" isn't the best way to describe how a huge chunk of labor responds to changes in demand. This is because a minimum wage effectively hides all the disparities in demand that occur beneath the minimum wage. Hiding demand disparities effectively eliminates the incentive for supply to respond to them. It really doesn't become profitable for labor to respond to changes in demand. Garbage in, garbage out.
Bundling effectively hides demand disparities and, as such, eliminates the incentive for suppliers to respond to them. Bundling does an excellent job of protecting producers from consumers. Except, why in the world would we ever want to protect producers from consumers?
Perhaps some lateral thinking would help...
Can you imagine if we protected flowers (producers) from hummingbirds (consumers)? What would happen to the supply of flowers if we reduced hummingbirds' choice in the matter? From the perspective of hummingbirds... would the supply improve? Would flowers fiercely fight for the attention of hummingbirds? Would flowers have the maximum incentive to produce an abundance of nectar? Would there be a greater variety of flowers for hummingbirds to choose from? Would hummingbirds have more freedom? Would hummingbirds truly be happier?
How often do we hear biologists cry to reduce hummingbird choice? How often do we hear economists cry to reduce human choice? Biologists cry when we do interfere with the environment. Krugman cries when we do not interfere with economy. Well... Krugman doesn't literally cry. Who wants to see Krugman literally crying? Well... hmmmm... big, fat, juicy tears rolling down his cheeks and dripping from his elfish face. I wonder how his tears would taste? Like heaven. Now I have a craving for Krugman's tears!
In a recent blog entry... The free-rider problem is an argument against democracy... I shared this passage by Hayek...
True, if we want at any time to make sure that we achieve as quickly as we can all that is definitely known to be possible, the deliberate organization of all the resources to be devoted to that end is the best way. In the area of marriage, to rely on the gradual evolution of suitable institutions would undoubtedly mean that some individual needs which a centralized organization would at once care for might for some time get inadequate attention. To the impatient reformer, who will be satisfied with nothing short of the immediate abolition of all avoidable evils, the creation of a single apparatus with full powers to do what can be done now appears therefore as the only appropriate method. In the long run, however, the price we have to pay for this, even in terms of the achievement in a particular field, may be very high. If we commit ourselves to a single comprehensive organization because its immediate coverage is greater, we may well prevent the evolution of other organizations whose eventual contribution to marriage might have been greater. - Friedrich Hayek, The Constitution of Liberty
Hah...ok, yes, I took a couple liberties with this passage. You caught me. But the basic economic/evolutionary concept is just as applicable to marriage as it is to welfare. Hayek also wrote... "The introduction of such a system therefore puts a strait jacket on evolution and places on society a steadily growing burden..." Yes!!!
Government marriage has definitely put a straight jacket on the evolution of marriage. It's obviously true that this straight jacket doesn't prevent all change... given that marriage now includes gays. But as usual, the challenge isn't to see the seen... the challenge is to see the unseen. What would marriage look like now if it had been privatized 50 years ago? If marriage had been exposed to the full, direct, and extremely powerful force of consumer choice... would it be closer to, or further from, the preferences of consumers? Would the market have found/made more, less, or the same number of improvements? Would society have allocated more, less, or the same amount of its limited resources to debating marriage? Obviously I wouldn't be spending my time writing this blog entry.
Here's Milton Friedman, nearly 50 years ago, theorizing what would happen to television if it was more fully subjected to consumer choice...
What kind of TV system would emerge from the free and unfettered operation of market forces? No one can say in detail. The market is most ingenious and always produces surprises. But certain things are clear. First, there would still be programs supported entirely by advertising—as giveaway newspapers are now. Second, there would be many programs supported partly by advertising, partly by fees—as many newspapers and magazines are now. Third, there would be many programs supported entirely by fees—as so many books and other publications are now. Fourth, the TV bill of fare would be far richer than it now is. It would cater to all viewers, not just those influenced by advertising. It would provide expensive programs for limited audiences as well as low-cost programs for mass audiences. - Milton Friedman, How to Free TV
The specifics might not be applicable to marriage... but the general concept certainly is. If we fully subjected marriage to consumer choice, then the supply of marriage would more accurately reflect the diversity of the demand for marriage.
Over at the Federalist... Stella Morabito posted this article... 5 Questions For Libertarians Who Support Privatizing Marriage. Here's my one question for anybody who opposes privatizing marriage...
1. What impact does a reduction of consumer choice have on supply?
A. Supply improves at a faster rate
B. Supply improves at the same rate
C. Supply improves at a slower rate
Unfortunately, this is a really difficult question for way too many people. Alex Tabarrok is my favorite living economist... but he opposes unbundling cable. Jason Kuznicki might not be my favorite libertarian... but he's definitely way up there. I only have 8 followers on twitter... and he's one of them! Just in case you're wondering, my favorite libertarian is David Boaz... in no small part because of his endorsement of tax choice.... We should get to decide how the government spends our taxes. Even though Kuznicki is one of my favorite libertarians... he opposes privatizing marriage. Does he also oppose unbundling cable? Does Tabarrok also oppose privatizing marriage?
Perhaps I should point out that I'm not a libertarian... I'm a pragmatarian. For libertarians, the only way to subject marriage to market forces would be to move marriage from the public sector to the private sector. However, as a pragmatarian, I believe that there's a second way. Rather than marriage going to the market... the market can go to marriage. This second way could easily be accomplished by allowing people to choose where their taxes go.
So actually, given that David Boaz endorses tax choice, he isn't a libertarian... he's a pragmatarian. This is an important distinction. It differentiates those people who merely give lip service to market forces (libertarians) from those who actually appreciate and understand the benefits of market forces (pragmatarians). Anybody who doesn't publicly endorse allowing people to choose where their taxes go... doesn't truly understand the value of consumer choice. What about Friedman, Hayek and Smith? Well... unfortunately, they didn't have the opportunity to consider pragmatarianism... so "conversion" wasn't an option.
What about anarcho-capitalists? Unlike pragmatarians, they fail to recognize that the free-rider problem is a real problem. But is the free-rider problem applicable to marriage? Heh. No. Eh...? No. So I don't see a problem with marriage going to the market. It wouldn't be my first choice... but it's infinitely better than allowing marriage to remain largely protected from consumer choice.
Even though I'm not a libertarian... I'll throw some answers at Morabito's 5 Questions For Libertarians Who Support Privatizing Marriage...
1. How does lack of state recognition of marriage—replaced by a system of domestic partner contracts—actually shrink government involvement? As Dalmia notes, these partnerships still need to be authorized, recorded, and registered by the state, all according to government regulations. Trading in the simple marriage license for a system of contracts seems akin to trading in a simple flat tax for today’s Internal Revenue Service tax code. The government is and will be deeply involved in the law, rules, regulation, and enforcement of contract law. So, please explain and demonstrate how the government’s role in our lives would be minimized by ending state-recognized marriage.
Uh what? It might help to have it straight from the horse's mouth...
At the most basic level, even if we can get government out of the business of issuing marriage licenses, it still has to register these partnerships (and/or authorize the entities that perform them) before these unions can have any legal validity, just as it registers property and issues titles and deeds. Therefore, government would need to set rules and regulations as to what counts as a legitimate marriage "deed." It won't—and can't—simply accept any marriage performed in any church—or any domestic partnership written by anyone. Suppose that Osho, the Rolls Royce guru who encouraged free sex before getting chased out of Oregon, performed a group wedding uniting 19 people. Would that be acceptable? How about a church wedding—or a civil union—between a consenting mother and her adult son? And so on—there are innumerable outlandish examples that make it plain that government would have to at least set the outside parameters of marriage, even if it wasn't directly sanctioning them. - Shikha Dalmia, Privatizing Marriage Is a Terrible Idea
LOL... just in case anybody was wondering why marriage is referred to as the last legalized form of slavery. Wives are property of their husbands? Or is it the other way around?
Not too long ago I registered a domain name. I didn't even have to leave the house. And it was super cheap... and quick. Does my domain name ownership have any legal validity? Will it stand up in court? If not, then I'd want a full refund. If I didn't get a full refund, then I'd organize a boycott! Next question...
2. How would you deal with possible legislation to license all parents, including biological parents, once the state no longer recognizes any union, including that of biological parents, as marriage? As stated above, the loss of state recognition of their union as anything more than an ordinary contract will deprive biological parents of the presumption of custody. This scenario seems to open us up to more state meddling in family life, as well as meddling by other parties—particularly when it comes to the child custody.
And I thought that marriage was the last legalized form of slavery?! If the for-profit or non-profit organization that certified your marriage didn't also offer a really good deal on certifying your custody... then you should get a refund. Same thing if the custody didn't hold up in court.
3. How does privatizing marriage preserve spousal immunity? At present, the government cannot force you to testify against your spouse. That is currently the law in all 50 states. But once the state no longer recognizes you and your spouse as a family unit—only as partners in an ordinary business-style contract—the case for spousal immunity significantly weakens. After all, what’s the rationale for immunity if a “marriage” is no more special than an ordinary contract, and “spouses” are merely associates, individual parties to ordinary contracts? It seems clear this would invite more state intrusion in family relationships, not less. It would invite less privacy, not more. If you disagree, please lay out your plan for preserving spousal immunity in a system without state-recognized marriage.
Hah. "Honey, aren't you so happy that we're officially business partners!??" LOL. How romantic? I'm pretty sure that there's a pretty significant difference between business partners and life partners. And I'm also pretty confident that the market will cater to this difference. So as long as life partners are certified as such... then the rationale for immunity is exactly the same.
4. What do you make of the fact that Sunstein, the Obama administration’s regulator-in-chief from 2009 to 2012, argues for essentially the same plan? Sunstein is a long-time advocate of policies that grow government. He’s a big fan of nanny-state style “nudging” intended to modify everyone’s behavior. Clearly, your intent for limited government deviates about 180 degrees from his intent for big government. (Ditto with Fineman’s project to end state-recognized marriage.) So it’s worth connecting a few dots and figuring out what actual path the abolition of civil marriage puts us on. Sunstein has thought this issue through for a very long time and he no doubt sees a road to bigger government. Explain how he is incorrect.
Hehe. Oh, I'm chuckling too much. This is by far the most solid argument against privatizing marriage. Sunstein's super shady. He's so shady that I wouldn't be surprised if he was somehow tricking me into writing this blog entry. Am I being choice architectured? It might help to do a bit of homework...
In a chapter titled "Privatizing Marriage," Thaler and Sunstein advocate, quite sensibly, moving in a libertarian direction by separating marriage and state. They point out that, despite the evidence, almost 100 percent of people who get married think that they are highly unlikely to get divorced. This is one of those systematic, but wrong, biases that people have. People also think that arranging pre-nuptial agreements will "spoil the mood." The result? Most people are vulnerable to "a legal system that has an astonishing degree of uncertainty." They advocate a nudge: a default contract that favors the weakest parties, typically women. Then, people would be free to avoid the default by tailoring a contract to their desires. They also suggest that taking marriage away from the state would, with one fell swoop, solve the thorny problem of gay marriage. Let churches and other organizations choose whatever marriages they want to approve and let people choose their churches. Interestingly, their nudge is a small part of this proposal, just as with their proposal on malpractice. - David Henderson, What Nudge Really Says
I dunno, maybe Henderson also got choice architectured? It's entirely possible! That Sunstein is real sneaky!
5. How would abolishing state-recognized marriage promote freedom of association for all? The family serves as a buffer zone, or mediating institution, between the individual and the state. But logically, if the government does not have to recognize your marriage, it does not have to respect it. It does not have to recognize your family relationships at all, or your family as a unit. You are merely a separate party in an ordinary contract with someone else, as far as the state is concerned. While the contract with your associate might mutually recognize one another as a “spouse,” and claim that your biological children are “yours,” the state isn’t bound to do the same. And this legal separation in the eyes of the state is destined to reverberate through every other personal association in society. Please explain how abolishing state-recognized marriage protects the family and helps insulate individuals from an increasingly Leviathan state.
The reason that the state is Leviathan is because people don't recognize the value of consumer choice. Tax choice only has 81 likes on facebook! Given that people don't respect each other's choices... why should we expect anything different from the government? Even in a representative democracy, the government can't be better than the people. If people disrespect each other, then their government will disrespect them.
If we can convince enough people that marriage would be improved by consumer choice... then this would be a huge step in the right direction.
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Bueller's Basement
Last year I started a thread in a cactus forum... Plant On Plant Action. It was about growing plants epiphytically. Here was one of the replies that I received...
Aha i see your tree, so u just hack some holes in a tree and stuff um with shpagnam moss then toss some seeds or a plant in their and WAHLA! Epitree's ! - KittieKAT
WAHLA!? Eh? I scratched my head for a while before I figured out that she meant VOILA! For some reason I found it terribly endearing and WAHLA! Now we're married! Hah, not... really. Those few exchanges in the thread were pretty much the extent of our interaction.
Why did I find her WAHLA! to be so endearing? I don't know. I don't think I'm more easily endeared than the next guy. Or maybe I am? My favorite movie is Chungking Express. It has an abundance of quirky/endearing details. That's why I've been able to watch it far more times than any other movie.
Why is there a scarcity of movies that have an abundance of quirky/endearing details? Part of the answer surely depends on the fact that I haven't been given the opportunity to accurately communicate my demand for Chungking Express. Am I supposed to buy the same movie 10 times? Not really. The supply can't be optimal when demand is largely unknown. Producers aren't omniscient.
Netflix allowing people to choose where their fees go would certainly help clarify demand. What about taxes though? Movies fall in the category of goods that we treat like private goods... but doing so goes against their true nature. So I'm inclined to believe in the Dept of Movies...
It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. - Adam Smith, Wealth of Nations
If we could choose where our taxes go... would we have to worry about people spending too much of their tax dollars on the Dept of Movies? Not according to Smith...
It is thus that the private interests and passions of individuals naturally dispose them to turn their taxes towards the public goods which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards say, the Dept of Movies, the fall of benefit in it and the rise of the benefit in all others... such as the Dept of Books... immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society.
If marriage was privatized, would we have to worry about producers allocating too much capital to supplying marriage certificates? No... because after a certain point... there would be a surplus. And we would know that there was a surplus because the profitability of supplying marriage certificates would decrease. Other endeavors would be relatively more profitable... and capital would shift accordingly.
If the market went to marriage though... would we then have to worry about government producers allocating too much capital to supplying marriage licenses? After all, there wouldn't be any profits to guide the producers. Profit, however, is merely a reflection of consumers' perception of relative scarcity. As long as consumers can allocate their money to communicate their perception of relative scarcity... then the distribution would still be optimal. Because as more and more resources were allocated to the Dept of Books... there would be less and less resources available for defense. This would increase people's perception of the relative scarcity of defense... which would increase the benefit of allocating taxes to the DoD. But of course we don't all have the same perception of relative scarcity. Which is a big part of the reason why consumer choice is so important.
It's really not easy to describe a mass of individuals each allocating their money according to their different perceptions of relative scarcity.
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