Tuesday, January 19, 2016

America vs England

Reply to reply: Are you confident in congress's competence?

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As for Congress, I can't speak for the US. The UK Parliament has its faults but I do think most of our politicians do it because they have a vision of the kind of society they would like to see, and they try to persuade us of its virtues. Which is fair enough, really. And I think the system sort of works, most of the time, which is about as much as we can reasonably expect. But our country is smaller than yours, so it may be that there is more alienation from Congress in the USA than there is from Parliament here. Also I live in London so I'm close to the action. Maybe if I were a Scot, or PhDemon in the North-East, I would feel more discontented. - exchemist

Imagine how alienated you'd feel now if Adam Smith had been more influential. He argued that colonialists should have been given taxation with representation. So if your government had heeded his advice before the point of no return... then we would still be British over here. Adam Smith also argued that the seat of power should be located in whichever part of the empire was responsible for providing the largest portion of the empire's revenue. This means that your parliament would now be located in Washington DC. How would you have liked them apples? Since you live in London you would be really really really far from the action.

Admittedly, your action is far more entertaining than our action. What the heck is going on with your people? Why do they have to stand up and sit down all the time? For the exercise? And what's with all the jeering? Is it jeering? It sure sounds like jeering. And the wigs? I can't remember if they wore wigs but your legal people still do. And then a few of your people have accents that are really ridiculous. My ear gets a good workout trying to decipher their gibberish. I have a friend in England who sometimes stays with me for a week or two. He's Welsh and for the first couple of days I'm always like "What?". Towards the end of his visit it's a lot easier to understand him. Not sure if it's because my ear has conformed to his tongue or vice verse (ehhhh.... errrrr). By far my favorite part about your system is how incredibly fast your politicians are on their feet. It's pretty amazing. Not sure why I don't get the same impression when I watch congress in action. Either it's how congress is structured or your politicians are faster on their feet. Personally... I'm the slowest person on my feet. I'd be like... "uhhhhhhhhhhh... I'll get back to you in a day... or two".

But you seem to be obsessed with money. You don't have much to say about making laws, do you? That is something else that elected representiatives do, which is arguably just as important as budgetary decisions, if not more so. And I think there would be huge problems if the lawmaking and the allocation of funds by government were to be split, because most lawmaking has financial consequences of some kind. - exchemist

I'm definitely obsessed with the money. Just like Adam Smith was obsessed with the division of labor. Have you read your guy? He was the smartest guy your country has ever and will ever produce. He explained that a division of labor results in greater productivity. So of course congress should be split.

There would be at least three congresses...

1. Spending Congress: They would be in charge of deciding how their portion of the purse would be spent. They would essentially be impersonal shoppers.

2. Legal Congress - They would be in charge of writing and changing laws

3. Tax Rate Congress - They would be in charge of the tax rate

If you're happy with the tax rate but unhappy with the laws... then you'd give your taxes to Tax Rate Congress and boycott Legal Congress.

What if you're a liberal taxpayer who doesn't want to shop for yourself... but you dread the thought of conservative impersonal shoppers having any control over your taxes? Clearly there would be pressure for Spending Congress to split into two...

1. Liberal Spending Congress: Liberal impersonal shoppers

2. Conservative Spending Congress: Conservative impersonal shoppers

But what if you're a liberal taxpayer who prefers some liberal impersonal shoppers more than others? Then you'd be able to give your tax dollars to specific impersonal shoppers... and impersonal shopping would be slightly less impersonal.

We can see how congress was broken down into numerous separate entities. One allocation option transformed into a plethora of allocation options. The same process would repeat itself with the other government organizations. The supply would naturally diversify because demand is inherently diverse. People would be "overwhelmed" with options in the public sector just like they are "overwhelmed" with options in the private sector.

Have you watched the Detectorists? I recently watched it on Netflix. It's a great show... I gave it 4 stars. You know which show I gave 5 stars? Spaced. I also gave 5 stars to Black Mirror. But I'm pretty sure that I love Spaced more than I love Black Mirror. Right now I pay for a bundle of shows and movies on Netflix. It sure seems like a great deal. I'd probably have to pay a lot more for my favorite shows if they were unbundled. The problem is that stars don't accurately communicate my valuation of my favorite shows. Does it matter if producers don't know how much I value the Detectorists, Spaced or Black Mirror? It has to matter. Because if it doesn't matter how much one consumer values some content... then it doesn't matter how much any consumers value some content. But how can producers possibly know which content to supply more of when they don't know consumers' valuations of their content?

The simple solution would be to allow subscribers of Netflix to allocate their monthly fees to their most valued content. Under the star rating of each show or movie... it would also display the total amount of money that's been allocated to that show or movie. Then everybody would know the demand for specific content. Producers would make far more informed, and hence valuable, decisions regarding what type of content to supply more of.

If you can understand the benefit of giving Netflix subscribers the option to directly allocate their fees... then you can understand the benefit of giving taxpayers the option to directly allocate their taxes. It's the same exact concept. Creating a market in Netflix is beneficial for the same reasons that it's beneficial to create a market in the public sector. Producers would make far more valuable allocation decisions if they knew the specific valuations of consumers. Of course... creating a market in the public sector would be infinitely more valuable than creating a market in Netflix.

I'm obsessed with the money because I'm obsessed with communication. As the saying goes... money talks. Right now I'm on mute in terms of content because I can't choose where my Netflix fees go.  I'm also on mute in terms of public goods because I can't choose where my taxes go. Maybe what I have to say with my money isn't especially important... but what a whole country has to say with its money is extremely important. We should really stop putting the entire country on mute.

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