Monday, August 14, 2017

Dividing Attention Between Eric Schliesser And Jacob T. Levy

Comment on: On the role of Systematicity in an Impure Theory of a (Pluralistic) Liberalism worth Having by Eric Schliesser

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"taking into account the interests and aims of social actors"

From my perspective, this is the heart of the matter. It's necessary to take interests into account because 1. society's resources are limited and 2. uses are unequally valuable. For example, any time/attention that's allocated to your blog/book can't be allocated to other ones. And blogs/books are unequally valuable. In order to efficiently allocate limited time/attention among unlimited and unequally valuable blogs/books, it's necessary to determine/know the value of each blog/book.

My attention was allocated to this entry was because Levy tweeted it, Peter Boettke retweeted it and Smith is my favorite economist. A (re)tweet is essentially a vote. The problem with voting is that it doesn't signal the depth of interest. If we don't know how interesting/important things are, then resources will be inefficiently allocated. This is why in all cases, voting is far inferior to spending. Spending quantifies depth through a willingness to sacrifice.

If I want to read your book, I'll have to purchase it. I'll have to make a sacrifice. However, chances are slim that the amount of money that I spend on the book will accurately reflect/signal my true valuation of your book. If I spend the same amount of money to read Levy's book, it's doubtful that I'll value both books equally... even though I spent the same amount of money on them.

So the inherent challenge is understanding the difference between using money to...

1. ...purchase/acquire/get/buy the two books
2. ...help determine how to divide society's limited time/attention between the two books

The first does a far better job than voting at accomplishing the second. But if you can appreciate why this is, you'd also appreciate that there's considerable room for improvement. The correct (optimal/efficient) division of society's limited resources among unlimited and unequally valuable uses depends entirely on accurate value signals. So we need a way to help minimize consumer surplus.

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