Tuesday, August 18, 2015

Markets vs Not-markets


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Encouraging the youth to engage in legal plunder probably isn’t the best way to eliminate legal plunder. In some cases it does make sense to fight fire with fire… but I’m pretty sure that this isn’t one of them. 

With politics… taxpayers put their money into one big pot and voters elect a small group of planners to decide how to spend it. Why would you want to encourage people to participate in this process? Why would you want to legitimize it? The goal should be to help people thoroughly understand just how absurd and harmful this method of allocating society’s limited resources truly is. 

Right now we have a mixed economy. This means that we have a market economy in the private sector and a not-market economy in the public sector. The fact that we have a mixed economy implies that a not-market economy creates just as much value as a market economy does. If this implication is correct though… then shouldn’t we also want a non-market economy in the private sector? 

If we replaced the market in the private sector with a not-market… then think about just how much time, effort and energy this would save consumers! For example, here’s a story on Medium that I stumbled across a few days ago…

So, there I was. Planted firmly in front of the beer fridge at the local Whole Foods, confronted with more options than I could process. I was paralyzed by choice. — Stephen Weiss, Musings in the beer aisle

Poor Stephen Weiss was paralyzed by choice! He was overwhelmed with the variety and selection of beers! Don’t you feel sorry for the guy? He was having to exert so much mental energy and effort trying to decide which beers would create the most value for Kate and himself. 

Each year Weiss spends an incredible amount of time and energy trying to decide how to spend his own hard-earned money. Multiply this time and energy by the 300 billion consumers in America and you end up with a sun’s worth of time and energy. This epic quantity of time and energy that consumers spend in one year could be saved simply by replacing the market with a not-market. 

Weiss and all the other consumers would put their private money into one big pot and voters would elect a small group of planners to decide how to spend it. Voila! A sun’s worth of time and energy would be freed-up for more valuable uses! Weiss could spend all his new-found time and energy with Kate and all the other people that he cares about. He would never have to worry about shopping again. The stress and strain of having to decide what to put into his shopping cart would quickly be replaced with the joy and happiness of outsourcing all his spending decisions to superior individuals. 

The economy would no longer be mixed. We’d have a not-market in the public sector and a not-market in the private sector. But would we really need two not-markets though?. Why would you want superior individuals spending your public dollars and less superior individuals spending your private dollars? It would make a lot more sense to have the most superior individuals spending all your dollars. 

I’m sure that you have at least a few arguments against allowing the most superior individuals to spend all your dollars. But they can’t be very good arguments. Because if they were… then they would be equally applicable against allowing superior individuals to spend your public dollars (taxes). Clearly your arguments aren’t so great though because here you are endorsing not-markets. 

Replacing the market in the private sector with a not-market would destroy value. It would destroy an immense amount of value. This is because consumer choice is the only way that we can help ensure that the maximum amount of value is created. We all greatly benefit when everybody is free to decide for themselves which items they put in their shopping carts. Yes, it does require effort and energy to decide which items will create the most value… but this is the only way to ensure that the most value is created. 

If replacing the market in the private sector with a not-market would destroy massive amounts of value… then replacing the not-market in the public sector with a market would create massive amounts of value. This value-creating replacement could easily be accomplished by giving taxpayers the freedom to choose where their taxes go (pragmatarianism).

Would giving Stephen Weiss the freedom to shop in the public sector use up even more of his limited time/energy/effort? That would be entirely up to him. Just like nobody forces him to shop at Whole Foods… nobody would force him to shop in the public sector. Congress would still be there…. so if Weiss was entirely happy with how they were spending his hard-earned money… then he wouldn’t have any to reason to stress and strain his brain trying to choose the most valuable method of protecting the environment.

Furthermore, we don’t live in a utopia where all of a sudden a new type, party or form of Government will provide an equal batch of policies that benefit old and young alike (although many seem to think this fairy tale land exists).

Not sure if you would consider pragmatarianism to be Utopian. But… you are arguing for a limited government. And a limited government means that the not-market will allocate less resources and the market will allocate more resources. So in order for your argument to be effective… you need to effectively explain why you want the market to allocate more resources. In other words, you need to effectively explain what’s so great about consumer choice. You need to help people understand what the benefit is of Stephen Weiss being free to strain his brain trying to decide which beers he puts into his shopping cart. You need to help brightly illuminate how Weiss’s beer choices positively impact the variety, quantity, quality and affordability of beer.

It’d be great if I could claim that I effectively explain the value of consumer choice… but unfortunately… my explanations fall well short of effective. Two heads are better than one though! Since we both want markets to allocate more resources… hopefully you can improve on my explanations! 

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