Friday, March 31, 2017

Jason Kuznicki VS Adam Smith

Comment on: Not Against Democracy by Jason Kuznicki



However well balanced the general pattern of a nation's life ought to be, there must at particular times be certain disturbances of the balance at the expense of other less vital tasks. If we do not succeed in bringing the German army as rapidly as possible to the rank of premier army in the world...then Germany will be lost! - Adolf Hitler
This decision demands a major national commitment of scientific and technical manpower, materiel and facilities, and the possibility of their diversion from other important activities where they are already thinly spread. - John F. Kennedy, Special Message to the Congress on Urgent National Needs

Donors to the Libertarian Party were recently given the freedom to use their donations to signal which potential convention theme is the most urgent/vital/important/necessary/relevant/valuable.  Here are the top results...

$6,222 – I’m That Libertarian!
$5,200 – Building Bridges, Not Walls
$1,620 – Pro-Choice on Everything
$1,377 – Empowering the Individual
$395 – The Power of Principle

The theme "Taxation Is Theft" received $15.42.  Thanks to the Invisible Hand we can all see and know the order (relative importance) of the potential themes.

Democracy, in comparison, simply allows us to see and know how popular something is.  Why is knowing how popular something is more important than knowing how valuable it is?   In your essay you mentioned the market but... for some reason you really didn't consider it to be an alternative to democracy.  Why is that?  Do you not understand how the Invisible Hand makes decisions?  Do you not trust the Invisible Hand to make decisions?  Do you truly believe that the Democratic Hand will make superior decisions?   If so, why?  What is it, exactly, about cheap talk that you find more trustworthy than people's willingness to sacrifice?

What's rather ironic about the potential LP convention themes is the glaring absence of the most important theme... "The Invisible Hand Ordering Things".  Evidently the LP thought that the Invisible Hand was important enough to order the potential themes but not important enough to be one of them.

For whatever reason you didn't include the Invisible Hand as a potential option either.  You carefully compared democracy to some shitty alternatives and then declared democracy to be the winner.

Also, in your essay you said, "...and we let everyone vote. Indeed, we insist on it."  Actually, we don't let kids or foreigners vote.  But for the most part we do let them spend their money.


Kuznicki: I agree that any society with a high degree of individual liberty would necessarily offer wide scope to invisible hand processes. Many of these are tremendously beneficial, such as the market.

Yet invisible hand processes fare unevenly at times. Robert Nozick argued, I think correctly, that an invisible hand process would give us a monopoly state if we were to start from a condition of anarcho-capitalism. This is far from clearly a positive development.

Within governments, invisible hand processes clearly already take place; the discipline of public choice is devoted to studying them, and it’s produced many valuable insights. Yet I do not understand how you propose to choose candidates for office by an invisible hand process. Do you really mean to auction offices to the highest bidder? Sale of office has been tried in the past, and it did not work out well.


Xero: Candidates can be chosen exactly like the LP convention theme was chosen.  There would be a list of candidates and people could use their donations to the government in order to signal which candidate is the most valuable.  The Invisible Hand would determine the order (relative importance) of the candidates.

Cato could and should use the same method to choose its CEO/president.  I could make a donation to Cato and use my donation to signal which candidate is the most valuable.  The Invisible Hand would determine the order (relative importance) of the candidates.

An alternative approach would be for the winning side to compensate the losing side.  I could make a payment of any amount to Cato for my preferred candidate.  If my side lost, then not only would I get my money back, but I'd get a proportional slice of the total amount of money spent on the winning candidate.  To see a real life, but rather small, example of this method just google "Classtopia coasianism".  Coasianism is a group trade... which means that it's a win-win situation.  You either get your preferred option... or you get fairly compensated.

Allowing the Invisible Hand to chose the leader of an organization begs the question of the division of decisions between the leader and the Invisible Hand.  Consider the following example...

From my perspective, it's a brilliant idea for the Invisible Hand to determine the order (relative importance) of Cato's papers.  If I make a donation to Cato, I'd love to have the freedom to use my donation to signal the importance of Brink Lindsey's paper "Low-Hanging Fruit Guarded by Dragons".  Everybody should be able to easily see and know which Cato paper is the most valuable.  Just like everybody can now easily see and know which LP convention theme is the most valuable.

Who should decide whether to implement my idea... the CEO of Cato... or the Invisible Hand?  Who is more likely to know the true value of my idea?  Consider this passage from Deirdre McCloskey's book "The Applied Theory Of Price"...

Geoffrey Hellman wrote for the New Yorker magazine for a long time and had incessant quarrels with its editor, Harold Ross, about how little Ross paid a man of Hellman's seniority. Ross insisted that he paid what each piece of writing was worth:  
"You say that you have been here eighteen years and are not treated better than a good writer a couple of years out of college would be, so far as pay for individual articles is concerned... My firm viewpoint is that we ought to pay what a piece is worth, regardless of age, race, color, creed, financial status or any other consideration. I don't know how, in an enterprise of this sort, one in my position can take into consideration anything beyond the actual value of the things."

Imagine if subscribers to the New Yorker used their fees to signal the value of articles.  Who is more likely to know the true value of an article... the Invisible Hand or the editor?

In other words, within an organization... what is the proper division of decisions between the Visible Hand and the Invisible Hand?    Which decisions, if any, would the Visible Hand be better than the Invisible Hand at making?

Right now the Invisible Hand determines the order (relative importance) of all sorts of things... from the frivolous (ie gummy bears) to the serious (ie computers).  So the fact that you, of all people, fail to recognize that the Invisible Hand is a viable alternative to democracy is extremely problematic.  I'm sure that you'd agree that in no way, shape, or form is the Democratic Hand or the Visible Hand better than the Invisible Hand at determining the order (relative importance) of gummy bears and computers.  Therefore, it should be abundantly clear that you really need to get your story straight.

And if it seem evil unto you to serve the Invisible Hand, choose you this day whom ye will serve; whether the Invisible Hand which determines the order (relative importance) of clothes, computers and cars, or the Visible Hand which has determined the  order (relative importance) of the drug war, the terror war and the poverty war, or the Democratic Hand which has determined the order (relative importance) of Gary Johnson, Hillary Clinton and Donald Trump: but as for me... I will serve the Invisible Hand.  I will serve and protect and fight for people's freedom to use their own money to signal the importance of things.

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