Is Virtuous Rent Truly Virtuous?

Reply to: Universal Income as a Good Form of Rent by Peter Barnes

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I clicked the *heart* button because… there’s a considerable amount of economic goodness in your story. However, there is a pretty glaring logical inconsistency. You start with a not unreasonable criticism of traditional rent… “traditional rent is income received not because of anything a person or business produces”… but then you go on to propose and promote virtuous rent. However, virtuous rent would also be “income received not because of anything a person or business produces”.

It can be very reasonably argued that your criticism of traditional rent is far more applicable to virtuous rent. With traditional rent, you have to spend your own time and money in order to make money. There’s uncertainty and risk and you might lose your shirt. But with virtuous rent, you’re not even spending your own time and money. You’re certainly not managing a property. You’re certainly not endeavoring to keep customers happy. You’re certainly not wining and dining politicians and gambling that they’ll keep their word. With virtuous rent there’s absolutely no sacrifice or diligence or effort or risk involved. It’s pure reward.

Income isn’t a function of owning resources, it’s a function of using them…

Moreover, what is a resource today may cease to be one tomorrow, while what is a valueless object today may become valuable tomorrow. The resource status of material objects is therefore always problematical and depends to some extent on foresight. An object constitutes wealth only if it is a source of an income stream. The value of the object to the owner, actual or potential, reflects at any moment its expected income-yielding capacity. This, in its turn, will depend on the uses to which the object can be turned. The mere ownership of objects, therefore, does not necessarily confer wealth; it is their successful use which confers it. Not ownership but use of resources is the source of income and wealth. — Ludwig Lachmann, The Market Economy and the Distribution of Wealth

If it didn’t matter how resources were used, then all lottery winners would increase their wealth.

Even if there wasn’t a logical inconsistency at the heart of your support for virtuous rent… you still have a fundamentally flawed premise with regards to externalities. There are numerous and significant negative externalities associated with producing sofas. Do these negative externalities represent a cost to society? Sure. Definitely. But do you think that you can adequately guess the size of this cost? If so, then do you also think that you can also adequately guess the size of the benefit? Of course there’s absolutely no need for you to do so because that’s what consumers are for. But in the absence of the spending decisions of consumers… do you think that you could adequately guess the size of the benefit? I’m sure that you recognize that this is the very premise of socialism. I’m also sure you’re aware that socialism doesn’t work so well at guessing society’s benefits or costs.

It is impossible for anyone, even if he be a statesman of genius, to weigh the whole community’s utility and sacrifice against each other. — Knut Wicksell, A New Principle of Just Taxation

Sofas, like every product, have a light side (yang) and a dark side (yin). The yang of sofas is having a comfortable place to cuddle. The yin of sofas is living in a more polluted world. It’s just as beneficial to know how much consumers are helped by sofas’ yang as it is to know how much consumers are hurt by sofas’ yin. Consumers have the freedom to use their cash to communicate their valuation of sofas’ yang… but they have far less freedom to use their cash to communicate their valuation of sofas’ yin. This is because of taxes.

The premise of taxes is pretty reasonable…. the free-rider problem. When you spend your money to communicate your valuation of a sofa’s yang… then you and your cuddle buddy get the sofa all to yourselves. I can only sit on, and enjoy, your sofa if you give me permission to do so. However, if you spend your money to communicate your valuation of a sofa’s yin… then you don’t get the marginally more clean world all to yourself. You have to share it with me and everybody else.

So the premise of taxes is pretty reasonable. What is not reasonable is the fact that planners get to decide for us how our taxes are spent. It really doesn’t matter that we get to elect our planners… it’s still socialism. The logical and detrimental consequence of having socialism in our public sector is that planners will not adequately guess our true valuations of the yin of products… just like planners cannot adequately guess our true valuations of the yang of products.

The solution is simple. We create a market in the public sector by allowing taxpayers to choose where their taxes go (pragmatarianism). To give credit where credit is due… the Nobel prize economist James Buchanan deserves credit for this idea… The Economics of Earmarked Taxes. Netflix subscribers already have to pay a fee… so they might as well use their fee to accurately communicate their valuation of the content. They have absolutely no incentive to pretend that they value some content less than they truly do. “Lying” won’t reduce their Netflix fees… so they might as well be honest.

Right now we have a market in the private sector. Consumers have absolutely no incentive to lie about their valuation of sofas’ yang. If we had a market in the public sector…. then taxpayers would have absolutely no incentive to lie about their valuation of sofas’ yin. Instead of progress being lopsided and skewed to the superficial, it would be balanced and harmonious.

Economic enlightenment means clearly seeing that the true source of society’s problems is not the market in the private sector… it’s the absence of a market in the public sector.

Artificial Barriers To Entry: Humanity's Berlin Wall

Reply to: How (Not) To Be a Capitalist

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You argue that nobody is better off when they trade with Martin Shkreli… but you also argue that plenty of people choose to trade with him (which is why he’s raking in the profits). 

The first time that you traded with Shkreli he ripped you off. Shame on him. But if you traded with him a second time… then shame on you. If you continued to trade with him… then here are a couple of very different conclusions…

1. you’re irrational
2. you’re benefiting

Are you irrational? If so, then you really shouldn’t be blaming Shkreli. Are you benefiting? If so, then you really should be thanking Shkreli. 

Markets wouldn’t work so well if most people continued to make trades that weren’t beneficial. The fact of the matter is that consumers want to maximize their profit just as much as producers do. The only difference is that we can’t see or measure the amount of profit that consumers derive from a trade. But, because market trades are entirely voluntary, when consumers continue to make the same trades…. we can reasonably guess that they are profiting from doing so. It’s an entirely different story when consumers don’t have the freedom to exit. In the absence of consumer choice, the only thing that we can reasonably guess is that producers have little, if any, incentive to benefit consumers. Destroying the direct connection between payment and performance has logically detrimental consequences. 

Even though your economic analysis is logically flawed… you’re right that there’s a problem. Rent-seeking is certainly a part of it. The thing is… your definition of rent-seeking is incredibly wrong. Rent-seeking really is not when people charge what the market will bear. Where did you get the idea that it was? Being able to price gouge is the reward that people receive for correctly foreseeing future conditions. We really want people to have the maximum incentive to be in the most valuable place at the most valuable time. If there are a lot of people drowning and only one lifeguard… then it’s a really bad idea to reduce the incentive for other people to become lifeguards. Evidently you didn’t learn in econ 101 that incentives matter. You should try and get a refund. 

Rent-seeking is actually when people use the government to cheat. The minimum wage is the result of rent-seeking. It’s rent seeking when unions use the government to block competition. Just like it’s rent-seeking when corporations use the government to block competition. 

Forcing drug companies to comply with extensive government regulations is a huge part of the reason that drugs are so expensive. Costly compliance creates a very high barrier to entry… and a very high barrier to entry means a lot less competition… and a lot less competition means higher prices, smaller quantities and lower qualities. Drug companies want compliance to be costly… and voters want to be protected from defective drugs. So, unfortunately, it’s a win-win situation for congress to create the maximum amount of red-tape possible. 

Therefore, the real problem is democracy. Voters think that they are getting a free lunch when they vote for politicians who promise to ensure drug safety. Instead of getting a free lunch, voters simply make drugs a lot more expensive. Saving one life really isn’t such a great deal when it costs 1000s of lives. 

People vote to make it a lot harder to become a lifeguard and then they turn around and complain that so many people are drowning. 

The solution is to allow taxpayers to choose where their taxes go (pragmatarianism). When taxpayers consider the opportunity costs of drug safety compliance… they will decide that they have much more beneficial trades to make with the government. Big pharma will cry big tears when the barrier to entry is knocked down just like the Berlin Wall was. Once the barrier is down… competition will skyrocket and this will ensure an abundance of affordable and effective drugs. 

Drug companies will still want to cut corners… but a fully functioning market with maximum competition will quickly and severely punish any companies that cost, rather than save, lives. 

Regulations are just rules… and rules are necessary. This doesn’t mean though that all rules are equally necessary. The only way to ensure that rules truly create the most benefit for society is to create a market in the public sector. Are you going to voluntarily spend your hard-earned money on rules that harm you? Not if you’re rational. Generally speaking… rational people have more money to spend than irrational people. This is because being in the right place at the right time is more profitable than being in the wrong place at the wrong time. Thank goodness! So if you’re rational… then chances are good that you’re going to have more influence…. which you’ll use to support the most beneficial rules. If circumstances change and a rule becomes less beneficial… then you’ll have the freedom to quickly use your taxes to communicate to the rest of society that the rule has become less necessary. 

It’s important to understand that benefit is entirely in the eye of the beholder. Just like it’s important to understand that incentives matter. Just like it’s important to understand that every allocation requires the sacrifice of alternative allocations.

So is it beneficial for you to reply to my reply? I have absolutely no idea. But if you do reply…. assuming that nobody forced you to do so… and assuming that you’re reasonably rational… then I’ll logically conclude that any benefit that you foresaw must have been large enough to incentivize you to spend your time sharing your thoughts on my thoughts on your thoughts.

Concentrated Benefits and Dispersed Costs, House of Cards And Wikipedia

In my last post...Free Lunches Require Externalizing Costs...I mentioned that I'm banned from Wikipedia.  Today when I watched this excellent video it incentivized me to share some insight into why that is.

Did any of you who watched this video think, "hey, how come the House of Cards WP page doesn't mention public choice or rent seeking?" Or maybe, "hey, how come there isn't a Wikipedia entry for concentrated benefits and dispersed costs?"

Maybe one or two of you asked those questions?  If so, you're in luck.  The short answer is that I tried and failed (the knockers won)...

Librarian: So often these days, sir, we see, don't we, these so-called clever people who just can't wait to tear down and destroy.
Mrs Pert: And knock.
Librarian: And knock, yes. But do they ever have anything to put in the place of things that they destroy? No. It's wanton destruction.

Here's the long answer...

Concentrated benefits and diffuse costs history page

 *******  9 December 2012‎  *******

I created a stub for concentrated benefits and diffuse costs.

 *******  13 December 2012‎  *******

Rubin informally nominates it for deletion..."rarely used term, and the article only consists of a (disputed) definition and a series of (probably excessive) quotes."   I removed the deletion nomination because the "concept is noteworthy enough to warrant an article".

*******  15 December 2012‎‎  ******* 

Articles for deletion/Concentrated benefits and diffuse costs

Rubin formally nominates the article for deletion.

Rubin: PROD reason was: rarely used term, and the article only consists of a (disputed) definition and a series of (probably excessive) quotes; and was removed by article creator. In addition, the rare uses seem to be, with the exception of some libertarian think-tanks, primarily referring to corporate lobbying, rather than the more general concept implied here.

The result of the vote...
2 keep
2 delete
1 redirect

An admin, BWilkins (DangerousPanda), decided to redirect the article to tragedy of the commons.

*******  22 December 2012‎  *******

BWilkins talk page

Xero: You recently redirected concentrated benefits and diffuse costs to tragedy of the commons...however, as far as I can tell, there are absolutely no reliable sources that specify a connection between the two concepts. Also, the results of the AfD were 2 keep, 2 delete and 1 redirect. Yet, there are plenty of reliable sources which support the notability of this concept:

• Coleman, John - Democracy's Debt Dilemma Harvard Business Review. 24 April 2012
• Farber, Daniel A. and O'Connell, Anne Joseph - Research Handbook on Public Choice and Public Law 2010
• Schneider, Friedrich and Rowley, Charles Kershaw - The Encyclopedia of Public Choice 2004
• Olson, Mancur - The Logic of Collective Action. Harvard University Press. 1971
• Taylor, John B. and Weerapana, Akila - Principles of Microeconomics 2009
• Nechyba, Thomas - Microeconomics: An Intuitive Approach 2010
• Persson, Torsten and Tabellini, Guido Enrico - Political Economics: Explaining Economic Policy 2000
• Tomasi, John - Free Market Fairness 2012
• Public Choice: Why Politicians Don't Cut Spending. LearnLiberty.org. 20 April 2011
• Boaz, David - Well Worth the Money. Cato. 22 Aug 2011
• Boaz, David - What Big Government Is All About The Freeman.
• Ikeda, Sandy - Two Kinds of Government Failure The Freeman.
• Giberson, Michael - Concentrated benefits and dispersed costs

BWilkins: There were actually 2 who mentioned redirect. I felt it was a better choice than the delete it would have been, as per WP:PRESERVE. So why not expand the other term with some of the ref's you provided so that it makes even more sense?

Xero: They mentioned redirect but failed to offer any reliable sources to substantiate their suggestion. That's because it's a concept within public choice theory. It's discussed in the special interests section...which now contains a link that erroneously redirects to the tragedy of the commons. So...given that I seem to be the only active editor who's familiar with the field of public choice...it would be great if you could read over those references or take my word for it that CB/DC is notable enough to warrant its own entry.

BWilkins: I'll be happy to go back and change it to delete - which was the only other possible close based on my reading of the ref's and policy-based arguments provided.

Xero: Can you please articulate the shortcomings of the ref's and specify exactly which policy based arguments that you are referring to? As far as I can tell...it's a notable concept with numerous reliable sources supporting its notability. It was only proposed for deletion because the editor was unfamiliar with the field of public choice.

Rubin: It was nominated for deletion because X presented no evidence that the concept is notable, or that most of the quotes relate to the concept. He's now created a second article about the same concept under a different name, although, he's added some (unsourced) background, and at least one of the quotes appears to be on-topic. He's created a number of articles which consist only of a dictionary definition and a collection of quotes.

*******  25 December 2012‎  ******* 

My talk page

Rich: The discussion about deleting "Concentrated benefits and diffuse costs" was closed. The result was to redirect to ToC. Arthur Rubin was correct WRT to the redirect and your efforts to revive the article were disruptive. Please stop.

Xero: Do you know how I can bring this issue to the attention of any editors who might care about the fact that there are absolutely no reliable sources to support the redirect?

Rich: 1. You are missing the point. The discussion about concentrated benefits was closed and a decision was made. Rubin was implementing the decision and you improperly reverted it. 2. The guidance about RS does not apply to creating redirects -- when articles, such as those you created -- lack RS, it is proper to tag them as unreferenced and/or create the re-direct to an article which will cover the topic. 3. The burden to keep the material, when clearly unreferenced or of doubtful relevance, is on you. See: WP:PROVEIT. 4. "This issue" (whatever you mean by this is a mystery to me) is out there for editors to discuss. We do so on talk pages. As these are new articles they do not have followers, so the point is not a big one -- but you can raise them as you wish on WikiProject talk pages. 5. Your articles lack RS. As has been repeatedly stated, they are little more than WP:QUOTEFARMs. The guidance says: "This means that a quotation is visually on the page, but its relevance is not explained anywhere."

Xero: The entry on concentrated benefits and diffuse costs had numerous reliable sources...all of which can be found on the entry on legal plunder. Yet, there are absolutely no RS to support the redirect to tragedy of the commons. They are two completely separate and distinct concepts...concept A and concept B. By redirecting A to B you are saying that A = B when there are no RS sources to support that.

Rubin: The proper (from the point of view of Wikipedia) way of dealing with this would be to move legal plunder to wiktionary, and soft-redirect "concentrated benefits and diffused costs" there. You have not demonstrated the potential of a Wikipedia article on the subject. We would need to have people talking about the concept, not giving examples or consequences.

By that way, a redirect from A to B means only that A should be discussed in "B", not that A is B. May I suggest that you bring up the matter on Wikipedia talk:WikiProject Economics, if you want an expert opinion.

You might also bring up the redirect at WP:RfD, but, keep in mind, this would prohibit you from recreating the article in its present form anywhere in article-space, not just under the name, as the result of the AfD was "redirect".

*******  26 December 2012‎  ******* 

My talk page

Rubin: If you think I'm following you around, you're correct. If you want to point to any other editors who are primarily creating articles consisting of quotefarms, with "See also" sections pointing to all articles in a topic, such as public choice theory, I'll follow them around, too.

*******  2 January 2013‎  *******

BWilkins talk page

N2e: Hi Bwilkins. I saw only today that you closed the AfD for Wikipedia:Articles for deletion/Concentrated benefits and diffuse costs on 22 Dec 2012.

I did not see the AfD until today, and therefore of course, could not have participated in it. While I regularly teach on the concept of "Concentrated benefits and diffuse costs" in Economics classes I teach at a small liberal arts college, and I could provide additional sources for the concept (if the article existed), I realize it is too late to have that discussion now.

But I have a different question: one about the process of the closure. Since it would appear that no consensus was reached, with about 50% favoring keep and 50% favoring a redirect or delete, what was the rationale under those circusmstances for making a change, and essentially removing the concept from Wikipedia?

I'm not an expert on AfD's, but it would seem that no consensus to make the change occurred in this particular article, and that the article should have remained in place.
Cheers.

*******  7 - 9 January 2013‎  *******

BWilkins talk page

N2e: Hey Bwilkins. That was a serious question, and I am very much assuming good faith. I sincerely do not understand the criteria that was used to close that discussion, as it did not appear to have a consensus. Would appreciate your thoughts.

Herostratus: Hi N2e. Yes I agree that this change was problematical. I see a 3-2 headcount in favor of deleting or redirecting, which is not much of a quorum and not a supermajority, while the delete/redirect camp did not really have the upper hand in the argument either. So you're right. But you know, we have to work fast here, so mistakes like this crop up on occasion.

If the article had been deleted, you could go Wikipedia:Deletion Review. However, it was made into a redirect, so it's different. At any rate, while the concept is notable, the article was not too good, consisting mostly of a series of quoted passages (which are also copyright violations; we are allowed under fair use to quote short excerpts for certain purposes (such as describing/discussing the quoted work), but not to construct articles by pasting together string of copyrighted quotes). I suspect that's a main reason why the article was made into a redirect.

However, it still exists, and the history exists. I made a copy of the old version and put it in your userspace, here: User:N2e/Concentrated benefits and diffuse costs. What I suggest is that you create an improved version (if you want to) off-line, then edit the article and paste your work over the redirect in one edit. If the quality is reasonable I don't think anyone will object to this.

If you want to work on it here on Wikipedia -- say, if you want to ask User:Xerographica, the main editor of the article so far, if to work on it with you -- you can, but then instead of a simple copy-and-paste you have to a more complicated procedure called "history merge", which requires an admin to do. BWilkins or any admin will do this for you.

Xero: Why would you disparage the quality of the entry? Do you not understand how Wikipedia works? It's a notable concept...so I created a stub+...which anybody could have contributed to. The problem had absolutely nothing to do with the quality of the entry and everything to do with editors and admins editing way outside their areas of expertise.

Here are three entries that I just created...are any of them not up to your standard of quality? If so...then, rather than making the effort to improve them, why not just nominate them for deletion? Better yet...why not redirect them to the tragedy of the commons?

BWilkins: PLEASE NOTE: This was discussed at length further up this page - if it was your intent to continue that discussion, it should have been done there - or at least you should have read it before starting a new section. In my review of the article, and the quality of the policy-based discussions, the article was actually going to be a delete - this isn't a vote, so beginning the discussion with numerical counts is a bit of a red herring - the keep arguments were policy-weak, while the delete and redirect were strong enough to well outweigh the keep !votes. As part of WP:PRESERVE I chose the redirect option. Yes, you CAN take this to WP:DRV if you believe the closure was policy-incorrect

N2e: Hey, Bwilkins. I'm the one who started this Talk page section to ask YOU about YOUR rationale for closing the discussion without a real consensus one way or the other. I was not aware of any discussion higher up in the page, and had not seen it. I think you are confusing the comments of Xerographica with me.
I think your explanation of what was behind the closure answers my question, as does the helpful comment of Herostratus, above. I would be totally in support of poorly written and poorly sourced material being purged from the encyclopedia, at least temporarily, and then it can be re-added when/if it is ever better done by someone who cares enough to do it.

Xero: I cared enough to find all the reliable sources that supported the creation of a stub for a notable concept...a stub that anybody could have contributed to. Wikipedia is a collaborative project. It's based on Hayek's concept of partial knowledge. Expecting people to pop out perfectly polished entries goes against the entire concept of CROWD sourcing. And speaking of WP:BURDEN...where are the reliable sources that support concentrated benefits and dispersed costs being redirected to tragedy? It's been two weeks since I asked Rubin and BWilkins (see section above) to WP:PROVEIT and both have failed to do so.

N2e: Xerographica, as you can see above, I'm partially with you, in the sense that I know that Concentrated benefits and dispersed costs is a viable concept in economics, is notable, etc. As I said, I teach this stuff, and it is in the college textbook I assign to my classes.

Having said that, you should slow down, and self-monitor your behavior so we can all make this encyclopedia better together. Wikipedia will be just fine if it takes a few weeks, or a few months, to get the article back.

As you can see in the discussion above, the administrator who closed the discussion did so based principally on the poor quality of the article. It sounds to me like, based on that admin (BWilkins) and the other commenter (Herostratus), that the article, were it to be improved to meet article criteria, could simply replace the redirect at some point in the future, when some editor or set of editors [[WP:BURDEN|cares enough to ensure that all of it is well-sourced. That could be me, if I get around to having the time to follow the idea Herostratus left for me. But if not, it will emerge in time. But you will hurt your own ability to be constructive in improving the encyclopedia if continue to be disruptive. Relax. Cheers.

Herostratus: Just to clarify, it's not really the quality of the article. For all I know, creating a set of passages quoted from other works is a fine way to get some concepts across. It is, however, also against our rules because it violates the copyrights of the quoted works. Whoever works on the article in future needs to describe the concept in their own words.

Xero: Herostratus, you should really head over to the Wikiquote project and let them know that they are violating copyrights.

N2e, you're not addressing the reason that the article was nominated for deletion in the first place...

PROD reason was: rarely used term, and the article only consists of a (disputed) definition and a series of (probably excessive) quotes; and was removed by article creator. In addition, the rare uses seem to be, with the exception of some libertarian think-tanks, primarily referring to corporate lobbying, rather than the more general concept implied here. - Arthur Rubin

...and again...Wikipedia:Articles_for_deletion/Tax_choice

No sources have been provided that the name is used, and very few of the sources can be verified to discuss the same topic. I would accept a merge somewhere, if relevance is established, once the quotes are removed or placed in footnotes. - Arthur Rubin

...and again? Evidently we have different definitions of disruptive behavior.

*******  6 - 7 Feb 2013‎  *******

House of Cards talk page

Xero: I created the "See also" section and added public choice theory to it. Rich removed it with the following explanation "Jesh, opening a SA section for various economic/political theories is not encyclopedic or constructive."

For those of you who've watched the series, it should be readily apparent just how relevant public choice theory is to the show. In fact, rent seeking should be mentioned somewhere in the article. Actually "Rent Seeking" would be a far more accurate, if somewhat less catchy, title for the show.

For those of you not familiar with Wikipedia See also policy...links do not require reliable sources to be listed...they just need to be at least "tangentially related". Public choice is directly related to this show...and as such, it should be included in the See also section.

Rich: Correction to your quote. It is "...tangentially related topics." [Emphasis added.] The topic of the article is the television show. Not beltway politics, or musings about economic ideas, or poor excuses to add "See also" listings.

Xero: Would an accurate synopsis of the show mention rent seeking?

Rich: No. It is a drama about "Kevin Spacey as Francis "Frank" Underwood, a ruthless politician with his eye on the top job in Washington, DC." Not "Kevin Spacey as Francis "Frank" Underwood, a ruthless politician who considers rent seeking when he evaluates his career prospects."

Xero: Underwood sucks on the tit, he doesn't provide it. Try again.

Rich: I don't care what he sucks on. (Would fellatio be tangentially related to the show and thereby appropriate as a see also?) The topic of the article is the TV show, nothing more than that.

Xero: The topic of the article is the TV show and a strong recurring theme in the TV show is rent seeking. Have you even seen the show?

Rich: As you say, the topic of the article is the TV show. The topic of the article is not recurring themes of the show. Your tangentially related argument does not cut it. Why did I mention fellatio? Well, by your logic, if I take it to an extreme, fellatio is appropriate because it is a type of sexual activity, e.g., it involves sucking on a body part. Tit sucking is related to both breastfeeding and the mechanics of human sexuality because it is sucking on a body part, similar to fellatio. Since the show mentions tit sucking, which has a strong allusion to breastfeeding and since breastfeeding is tangentially related to sexual activity (both pre-partum and post-partum), and since fellatio is a sexual activity, fellatio must be a proper tangentially related see also for the article. (And keep your inquiries as to whether I (or anyone) has seen the show (or read material) to yourself. If I/we answer yes, then you'd likely respond "well, then, you don't understand what you saw/read" and if I/we answer no, you'd have another smart remark about my/our ability to figure out whether this is an appropriate see also.)

Xero: Yeah, you really nailed my logic there. Why don't you watch the show and then come back so we can have an informed discussion on whether breastfeeding or rent-seeking is more relevant.

McDoobAU93: I would agree with Xerographica's statement on reliable sources and the "see also" section, but do we cross into original analysis territory by saying "well I've seen this concept in the show, so we should link to that". If a reliably-sourced critique of the series appeared that mentions that terminology and concept, then I would be all for it being described in the article. I don't think a "see also" section would be needed if the concept were introduced by way of critical commentary on the series.

*******  6 Feb 2013‎  *******

House of Cards talk page

Xero: Speaking of rent-seeking...

Like "Veep," HBO's satirical half-hour, "Cards" remains somewhat coy about party affiliations for no clear reason, but Willimon exhibits a strong ear for the corrupting aspects of politics. Referring to a lobbyist throwing around money, Underwood drawls, "When the tit's that big, everybody gets in line." - Brian Lowry, House of Cards

Willimon clearly is having fun with the writing on this series, and he’s deftly able to make it shift characters and moods with ease. That means Francis isn’t always devouring people. In one scene, we find that he -- like so many others -- owes a great deal to lobbyists. And when he’s shown being threatened to make promises come true, he says to the camera: "It’s degrading, I know. But everybody gets in line when the tit’s that big." - Tim Goodman, House of Cards: TV Review

At a bare minimum...public choice theory should be added to the See also section.

*******  3 Mar 2013‎  *******

My talk page

Bwilkins bans me indefinitely from Wikipedia

*******  13 Oct 2013‎  *******

Concentrated benefits and diffuse costs history page

Mark7-2 redirects CB/DC from ToC to Public Choice.

Clarifying The Demand For Public Goods

[update] Please join the discussion: Demand Clarity Would Eliminate Corporate Welfare [/update]

Question

"How are we going to bust up big ag that has caused so much disparity?" - rabbitcaebannog, The Free Market religion needs to fall on its sword

Answer

We create a market in the public sector.  If people can choose where their taxes go (logistics) then we will see exactly what the demand is for farm subsidies...

This chart shows us what the demand for farm subsidies might look like.  As you can see, there's very little demand breadth because the benefits are extremely concentrated...

Those who think that central planning will promote economic progress are naive.  When business enterprises get more funds from governments and less from consumers, they will spend more time trying to satisfy politicians and less time satisfying customers.  Predictably, this reallocation of resources will lead to economic regression rather than prosperity. - James Gwartney and Richard Stroup, What Everyone Should Know About Economics and Prosperity

Their resources can be used in two ways: investment in capital goods that can be used to produce a product for sale in competitive markets, or investment in lobbying and bribing politicians and in trying to develop legislation that will protect firms from competition or provide them with a share of the public budget.  Under a large government, "political investment" can become relatively more profitable than "market investment," and a shift in investment from the market to the political arena should be expected.  In private competitive markets, a firm must appeal to buyers to enter mutually beneficial trades: in political markets it can enlist the power of the state to force people to give up part of their income for the firm's benefit. - Richard B. McKenzie , Bound to Be Free

Politicians exploit rational ignorance by conferring large benefits on certain constituents whose costs are widely dispersed and borne by the general population. Take the sugar industry. It pays the owners and workers to organize and tax themselves to raise money to lobby Congress for tariffs on foreign sugar. If they're successful, it means millions of dollars in higher profits and wages. Since they are relatively small in number the organization costs are small and the benefits are narrowly distributed. The Fanjul family, who owns large sugar farms in the Florida Everglades, capture an estimated $60 million annually in artificial profits. - Walter E. Williams, Rational Ignorance

My impression is that moves toward an economy with less open-market competition reflect a diversion of competition to the political process, as resort is made to greater governmental control over economic access to markets and terms of exchange.  Much of what passes for the new corporate economy should more accurately be called the new mercantilist, or the new “political” or politically regulated, economy, since it involves more political competition and the greater use of political rewards and penalties.  And this move to political influence has occurred in both small and large firm industries.  The “solution” (if such a “political” economy is a problem) usually is more political controls and political competition.  This is beneficial to those most adept at political competition, for they would benefit from increased demand for their services as political competition displaces market competition in controlling economic activity. - Armen A. Alchian, The Collected Works of Armen A. Alchian: Volume 2

Because the benefits of farm subsidies are so concentrated, if we implemented tax choice then it's highly likely that only a very small percentage of people will spend any of their tax dollars on them...

What a delicious prospect: a government office having to explain itself in order to persuade taxpayers to support its existence. The elements within the government that can make a persuasive case will do fine. Americans are not stingy or shortsighted. We will still have plenty of mine inspectors and curators. But who will voluntarily pay for the layers of bureaucratic barnacles that make up so much of the organization charts? Who will pay for the billions in subsidies that are doled out to agricultural, corporate and nonprofit special interests? Who will pay for the enormous pork-barrel projects? - Charles Murray, You Are What You Tax

If enough people don't pay for a public good (insufficient demand breadth)...then it won't be considered a public good.  As a result, people won't be able to spend their taxes on it.  

Another example is war...

There are multitudes with an interest in peace, but they have no lobby to match those of the 'special interests' that may on occasion have an interest in war. - Mancur Olson 

Going to war accelerated the move from indirect to direct rule. Almost any state that makes war finds that it cannot pay for the effort from its accumulated reserves and current revenues. Almost all war-making states borrow extensively, raise taxes, and seize the means of combat – including men – from reluctant citizens who have other uses for their resources. - Charles Tilly

In cases where a war has popular support (opinions, sentiment)...

As was noted in Chapter 3, expressions of malice and/or envy no less than expressions of altruism are cheaper in the voting booth than in the market.  A German voter who in 1933 cast a ballot for Hitler was able to indulge his antisemitic sentiments at much less cost than she would have borne by organizing a pogrom. - Geoffrey Brennan, Loren Lomasky, Democracy and Decision

...it's extremely unlikely that most people would spend any of their own money on it.  This is because talk is extremely cheap...which is exactly why we say that actions (spending) speak louder than words (voting).  The reality is that the multitude has a myriad of far more valuable/beneficial uses of their own money...

Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter plane with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. This is, I repeat, the best way of life to be found on the road the world has been taking. This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron...Is there no other way the world may live? - Dwight D. Eisenhower

Another excellent perspective on the subject...

The essential act of war is destruction, not necessarily of human lives, but of the products of human labour. War is a way of shattering to pieces, or pouring into the stratosphere, or sinking in the depths of the sea, materials which might otherwise be used to make the masses too comfortable, and hence, in the long run, too intelligent. Even when weapons of war are not actually destroyed, their manufacture is still a convenient way of expending labour power without producing anything that can be consumed. A Floating Fortress, for example, has locked up in it the labour that would build several hundred cargo-ships. Ultimately it is scrapped as obsolete, never having brought any material benefit to anybody, and with further enormous labours another Floating Fortress is built. In principle the war effort is always so planned as to eat up any surplus that might exist after meeting the bare needs of the population. In practice the needs of the population are always underestimated, with the result that there is a chronic shortage of half the necessities of life; but this is looked on as an advantage. It is deliberate policy to keep even the favoured groups somewhere near the brink of hardship, because a general state of scarcity increases the importance of small privileges and thus magnifies the distinction between one group and another. By the standards of the early twentieth century, even a member of the Inner Party lives an austere, laborious kind of life. Nevertheless, the few luxuries that he does enjoy his large, well-appointed flat, the better texture of his clothes, the better quality of his food and drink and tobacco, his two or three servants, his private motor-car or helicopter -- set him in a different world from a member of the Outer Party, and the members of the Outer Party have a similar advantage in comparison with the submerged masses whom we call 'the proles'. The social atmosphere is that of a besieged city, where the possession of a lump of horseflesh makes the difference between wealth and poverty. And at the same time the consciousness of being at war, and therefore in danger, makes the handing-over of all power to a small caste seem the natural, unavoidable condition of survival. - George Orwell

I've shown you charts that represent special interests...now, for comparison, here's a chart that represents what a general interest might look like...

Unlike with farm subsidies and war...many people will readily grasp the material benefit of spending their money on public healthcare.  We can see that, unlike with special interests, the demand for a general interest will be very broad.  This is because it will truly contribute to the well being of most people.

Consider this last passage...

The expenses of government, having for their object the interests of all, should be borne by every one, and the more a man enjoys the advantages of society, the more he ought to hold himself honoured in contributing to these expenses. - Turgot

Given the disparity between actions (spending/values) and words (voting/opinions)...the only way we can accurately discern how specific or general an interest truly is would be to create a market in the public sector.  If we do not clarify the demand for public goods then the interests of the many will continue to be sacrificed for the benefit of the few.