Wednesday, April 5, 2017

What’s the best way to order things?

Comment on: Democracy Strikes Back by Paul Crider

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The grocery store is a market. Shoppers use their money to signal the value of the products. The order (relative importance) of the products is determined by the Invisible Hand (IH).

The non-profit sector is a market. Donors use their money to signal the value of the non-profits. The order (relative importance) of the non-profits is determined by the IH.

The Cato Institute (CI) is in a market, but it it is not a market. Donors can’t use their money to signal the value of the CI’s products (papers). The order (relative importance) of the CI’s products is not determined by the IH. Instead, their order is determined by the Visible Hand (VH).

The Libertarian Party (LP) is in a market, but it was also partly a market. Donors were recently able to use their money to signal the value of the potential convention themes. 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

This order (relative importance) of the themes was determined by the IH.

The for-profit sector is a market. Shoppers use their money to signal the value of clothes, computers and cars. The order (relative importance) of these goods and many more is determined by the IH.

The public sector is not a market. People can’t use their taxes to signal the value of environmental protection or national defense or space colonization. The order (relative importance) of these public goods and many others is not determined by the IH. Instead, it’s determined by the VH.

Youtube is not a market. People can’t use their money to signal the value of videos. Instead, they can use their votes (cheap talk) to signal that they like or dislike videos. The order (relative importance) of videos is not determined by the IH. Instead, it’s determined by the Democratic Hand (DH).

So the most important question is… what’s the best way to order things… the DH, VH or IH?

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