Sunday, January 10, 2016

Farts Are Negative Externalities

Reply to reply: The Demand For Defense?

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Let's say that you and I are in a small tent. I fart. What do you do? I think your answer depends on quite a few variables. Like, how bad does my fart stink? And, how long can you hold your breath for? And, how cold is it outside? And, what were you doing when I farted?

A fart is a negative externality. Therefore, when the person next to you farts... you always react exactly the same? You always hit them? You always jump up and run away? You always hold your breath for one minute? You always grab the air freshener and empty the entire bottle into the room? You always gag? You always throw up? You always cry? You always laugh? You always make fun of the sound their fart made? You always defriend them on facebook?

Rules/regulations are fine and necessary. But the question is... how much of society's limited resources should we allocate to their enforcement? This is the important question because again, every allocation requires the sacrifice of alternative allocations.

You want people who fart in public to be publicly caned? Yeah? Really? If this was a rule... then the important question is... how much of your own tax dollars would you spend to enforce this rule? When trying to determine your answer you would automatically think of the alternative uses of your tax dollars. The less value you imagine deriving from the alternatives... the more money you'd be willing to allocate to the enforcement of this rule.

Externalities are all around us. Some are good and some are bad... but no two people are going to be equally affected by the same externalities. This is because no two people are exactly alike. We can only maximize value when people are free to decide for themselves how much they've been affected by an externality and whether it's worth it to sacrifice the alternative uses of their tax dollars.

Right now your complaint is that, in a pragmatarian system, people will suffer from big externalities. But you completely miss the point that the people themselves are the only ones who can know and communicate exactly how much they are affected by externalities. And the only way that they can accurately communicate how much they've been affected by an externality is by their willingness to sacrifice the alternative uses of their tax dollars.

So I agree with you that externalities are important to consider. But I disagree with you that congress is going to know how much of my money to spend on dealing with externalities. I myself can't even predict exactly what I would do if you farted next to me. It would depend on all the variables of that particular time and place. Congress can't have all the details of any of my particular times or places. Just like congress can't have all the details of any of your particular times or places. Just like congress can't have access to our utility functions. The infinitely infinite amount of information that congress is missing about all the individuals in all the different times and places in our country guarantees that congress will massively misallocate our money.

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