An Economy Based on Wife Swapping

Yes indeed...a Wife Swapping Economy.  Is it me or does Daniel Davies really want to endorse such a system...

… certainly have some attractive qualities, but although Graeber wins the battle against the “Myth of Barter” here I think he loses the war – really, although the discussion of socially embedded exchange is incredibly interesting and illuminating, I think anyone who reads the passage above is going to end up sympathising with the people in the economics department who say that you really can’t organise a modern industrial society on the basis of organising a wife-swapping party every time you want to buy a blanket. - Daniel Davies, Too Big To Fail: The First 5000 Years 

The Crooked Timber Liberals have recently posted so many blog entries on David Graeber's book on Debt that it kind of feels like I've already read the entire book.  Daniel Davies posted the latest one...and I was almost tempted to skip it...but then I decided to just skim it.  Boy, am I glad that I decided to skim it!!!  I literally LOL'd when I read the above passage.

I'm also a huge fan of National Geographic so it was also worth it to read his blog entry.  The passage he shared from Graeber's book offers a fascinating insight into the socioeconomic behavior of a very different culture.  Right there I considered using the word "primitive" but then decided against it...given that Stranger in a Strange Land is one of my favorite books.  Also, as I argued in this post...the devil's advocate for public goods...we're never "civilized"...we're always in the process of becoming civilized.

In terms of pragmatarianism...the whole debt debate, like most of our political/economic debates, becomes a moot point.  Taxpayers would give as much of their taxes as they wanted to say...the Dept of Education.  If taxpayers weren't happy with how the DoE was spending their money then they would just give their taxes to other government organizations.  If students felt that the DoE should give/lend them more money then the students themselves would have to convince taxpayers to allocate more of their taxes to the DoE.  If taxpayers did decide to give more of their taxes to the DoE then this would of course mean that other organizations would receive less revenue.  So students would receive more money...but perhaps poor/old people would receive less public healthcare.

We all stand to benefit as a society when each and every taxpayer is allowed to consider the opportunity costs of their tax allocation decisions.  In other words...we all stand to benefit when limited resources are efficiently allocated.  In other words...we all stand to benefit when each and every taxpayer is given the opportunity to maximize the utility that they derive from their tax allocation decisions.  In other words...why would anybody argue for the misallocation of their own, hard-earned taxes?

The question is...why aren't more people putting this in their own words?  I get that the general public has no idea how the invisible hand works...but what about economists?  

So the more specific question then becomes...who will be the first economist to openly and fully endorse pragmatarianism?  Let's see...

Definitely not Noah Smith...

Xerographica - I guess it's just that I have trouble understanding what you write...

Definitely not Steve Horwitz...

Bastiat may not have made any real contributions to economic theory...

Probably not David Friedman...

I don't think that letting taxpayers allocate their taxes among options provided by the government solves the fundamental problems of government.

Maybe...Arnold Kling...

I think that allowing taxpayers to allocate their taxes would be an improvement, but why stop with government organizations? Why not allow them also to choose from competing charitable organizations? That is what I propose in Unchecked and Unbalanced. 

But I'm going to go out on a limb here and vote for Peter Boettke.   The name of his blog is "Coordination Problem" and he writes about fallibilism...and he has yet to say anything about pragmatarianism.

Does anybody know of any other economists that might openly and fully endorse pragmatarianism?  If so, just ask them about pragmatarianism and then link me to their response.  Even if their response is negative please share it with me so that I can add it to the list.

Political Tolerance

Benjamin Marks wrote The Minarchist Case for Anarchism.  Here's one of my comments...

*********************

There was Buddha talking about the blind men touching different parts of an elephant…and Socrates saying…”…it seems that I am wiser than he is to this small extent, that I do not think I know what I do not know”...and Smith's Invisible Hand...and Bastiat’s Seen vs the Unseen...and Hayeks’ Conceit vs Humility...

They were all basically saying the same thing...all our perspectives are extremely limited.

What we are trying to do here is determine the proper scope of government. Given that our perspectives are extremely limited....it's impossible for any single person to really know what the proper scope of government is.

Does the proper scope of government include forcing people to pay taxes? You can say that it doesn't...but you can only say that for yourself....you can't say that for everybody. Maybe from my limited perspective people need to be nudged to contribute to the common good. Maybe I'm right...maybe I'm wrong.

So I do have an objection to allowing people to choose not to pay taxes. There's just no way I can truly know that forcing people to pay taxes is not within the proper scope of government. But the truth would be revealed by implementing pragmatarianism.

There are smarter people than myself who say that the government is not necessary...and there are smarter people than myself who say that it is necessary. It seems that I am wiser than they are to this small extent, that I'm saying that I don't know whether it is or isn't necessary. And this is why pragmatarianism is a cut above the rest.

Tax Choice - A Strategy For the Occupy Movement

In my last post I considered how this discussion...fallibilism vs fairness...resulted in my banishment from the Bleeding Heart Libertarian website.  Is there any way that I could have known that my comment would have resulted in my banishment?  Nope.  I thought that my comment would help reveal the true complexity of the problem.  So at the time it seemed like a decent enough strategy.  That's the thing...strategies and fallibilism go hand in hand.

Yesterday I had the good fortune to watch the Occupy Movement Strategy Forum on C-Span.  I was watching another program on C-Span but when the Occupy program started I completely lost interest.  So I went into my office to work but didn't turn the TV off.  Some time later, while taking a bit of a mental break from work, my ears perked up when I heard a lady on the TV say...

Each of us has a finite number of resources.  So where are you going to put your resources?  Where are you going to put your time and your money?  Are you going to put it into trying to elect somebody into this current system that's broken?  Or are you going to put that into building something?

The opportunity cost concept!?  That's one of my favorite concepts!  So I sprinted into the TV room and was really surprised to discover that the Occupy program was still on.  What a strange world.  One day I'm banned from a libertarian website for arguing that resources should be efficiently allocated and then the next day I hear a leader of the Occupy Wall Street Movement making the same argument!  What's going on here?

With great interest I sat down and watched the rest of the program.  The forum, which was organized by the The San Francisco 99 Percent Coalition, included these four leaders on the panel...

• Margaret Flowers  - Made the opportunity cost argument
• Rocky Anderson - Running for president in the Justice Party  (support him on Americans Elect)
• Tom Gallagher - Republicans must not win
• David Welsh - Union leader, radical socialist

It was really kind of surprising just how much I agreed with Flowers.  The strangeness didn't end there.  A lady in the audience had this to say (not an exact quote)...

There's a 1% who is controlling us.  We need justice.  It reminds me of the situation in India when the British were in control.  How did the Indians do it?  How did they get rid of the British?  They did it through Gandhi and his Salt March.  You're all familiar with his Salt March?  He found the one thing in India that they all had in common.  They all had to pay a tax on salt.  We are told to go out and organize...but around what?  We need something to organize around.  We need to find that one thing and boycott it to prove our strength...because we are the 99%.    

The Salt March was an example of tax resistance and tax resistance is one of the primary objectives of tax choice.  Then another lady in the audience offered this advice (not an exact quote)...

The first step in taking our power back is taking our money out of all the commercial banks and moving it into credit unions or community banks.  Corporations didn't get big on their own...they got big because we pay them.  So change your phone company...put your money where your heart is.

She literally said, "put your money where your heart is".  Talk about confirmation bias!  In the discussion that resulted in my banishment from the Bleeding Heart Libertarian website...fallibilism vs fairness...I twice made the argument that taxpayers should be allowed to put their taxes where their hearts are.

So what's going on here?  Why are proponents of the Occupy Movement using my arguments?  Or...am I using their arguments?  Maybe this entire time I've unknowingly been a proponent of the Occupy Movement?  Was I really occupying the Bleeding Heart Libertarian website??  When Matt Zwolinski banished me from his virtual space...maybe it was kind of like how police evict occupiers from actual spaces?  Heh...too weird.

If I really have been a proponent of the Occupy Movement this entire time though...then why did the liberal Chris Bertram want to evict me from the Crooked Timber Liberal website?  Why was the liberal John Holbo so resistant to my message?  Here's a point that he made when we discussed whether people should be allowed to sell their votes....

So your counter-argument is really a counter-premise, like so: wealthy people are, in virtue of their wealth, inherently more deserving of wielding political power. Period. End of story. That’s fine, insofar as that makes clear where the rest of us get off the bus: namely, with this first step.

Here was my reply...

If you don't want to disproportionately empower the rich...then you can't just get off the bus.  That's not where this story ends.  You need to stay on the bus long enough to understand where your money is going and how it is being used.  Like I said....that is the beauty of your pseudo-proposal.  It doesn't allow you to dissociate yourself from the indirect consequences of your consumption decisions.

Tax choice is all about ethical consumerism.  You can't give corporations the middle finger with one hand and then give them your money with the other hand.  

Here are a few statistics that the moderator of the Occupy Movement Strategy forum, Rose Aguilar, shared....

1. It costs $38,500 to purchase one ticket to attend a fundraising dinner for Obama

2. The total cost of the election is estimated to be between $6 and $7 billion dollars

3. There are 7.5 million women living on less than $6,000 per year   

So why not just boycott the elections?  Gallagher was concerned that if liberals boycott the elections or vote for the Justice Party then Republicans would win the elections.  But what if all the libertarians agreed to vote for Ron Paul?  What if we all just agree to vote for Vermin Supreme?

What's interesting is just how many of Ron Paul's supporters are voluntaryists.  It seems like the voluntaryists are trying to take power away from the government while Flowers is trying to take power away from the corporations.  But according to Flowers, the corporations control the government.  

If you watch this youtube video of the agorist John Bush....you'll get the sense that there is a huge ideological divide between his views and Flowers' views.  Bush firmly believes that taxes are theft while Flowers firmly believes that the involuntary redistribution of wealth is justified.  But around 20 minutes into Bush's video he starts offering practical suggestions that seem to have considerable overlap with Flowers' practical suggestions...

Here are some of the practical suggestions of Flowers...

• cooperative businesses
• cooperative banks
• decentralized/green energy

Here are some of the practical suggestions of Bush...

• cooperative schools
• competing defense agencies
• competing justice agencies

Here are some of the practical suggestions that they both suggest...?

• sustainable food networks
• competing currencies 
• shifting power to the people
• "resisting the world that we don't want to live in and creating the world that we do want to live in" - Flowers 
• "educate yourself on how non-violent movement effect change" - Flowers
• ???

There are plenty of technical terms to describe what John Bush is suggesting...

http://en.wikipedia.org/wiki/Agorism
http://en.wikipedia.org/wiki/Voluntaryism
http://en.wikipedia.org/wiki/Counter-economics

But what is the technical term to describe what Flowers is suggesting?  It's not just ethical consumerism... maybe it's more along the lines of ethical producerism?  What's so extremely fascinating is that she doesn't seem to advocate any practical suggestion that any libertarian would have any reason to oppose.  None of her practical suggestions require any legislation to implement!  Not only that...but she's basically advocating greater competition.  How cool is that?  So not only is Flowers' strategy completely immune to even the best libertarian critiques of the Occupy Wall Street Movement...but it's also something that libertarians should embrace and promote.

In my post on Libertarianism and the Free-rider problem I mentioned that I'd really enjoy watching Cait Lamberton and Jeffrey Miron sit down and discuss reasonable compromises.  In this post I'm going to say that I'd really enjoy watching Margaret Flowers and John Bush sit down and discuss a mutually beneficial strategy.


Here are my notes/transcript from the forum...

9:45 - David Solnit - criticized the bank bail out...should have bailed out homeowners or the education system or...

14:00 - Aguilar - militarization of police forces, the lack of regulation on imported food.  we need something new...the problem is money and politics

16:00 - Aguilar - tickets to Obama's fundraiser $38,500 / ticket... this election to cost between $6 and $7 billion dollars...7.5 million women live on less than $6,000/year

20:50 - Rocky - it's not just about electing the right people

23:50 - Rocky - people who make their money passively, sitting back

25:20 - Flowers - income inequality, other nations would be in violent revolution by now...people can't afford healthcare, college education...the real issues...the foreclosures, the lack of jobs...we can't look to leaders to solve our problems for us.  we don't have time to elect the right person...we need to empower ourselves.  leaderless vs leaderful

28:00 - Flowers - the opposition has had a long term strategy...corporatization of education, the media, the courts...think tanks like CATO...

28:15 - Flowers - there are solutions to every crisis we face in this country.  But those solutions are being ignored in congress because they are not there to look at the evidence or to act on behalf of the public interest. They are there to reflect the interests of their corporate funders.  So we need to shift the power, it needs to be intentional and strategic,

28:50 - Flowers - need to draw the nine pillars into the movement...the police force, the military, the civil servants, the religious institutions, NGOs, the media, business, workers and youth.  need to create a system to replace the current one...a more participatory democracy through the democratizing of various institutions

30:00 - Gallagher - it's necessary to ensure that the Republicans do not win.  it's not worth it to say..."a plague on both your houses".

31:25 - Gallagher - Right now we should have somebody running in the democratic primaries doing what Ron Paul's people are doing

31:55 - Gallagher - Foreign policy crimes of the current administration...6 countries have been bombed under the watch current administration Iraq, Afghanistan...

33:35 - Gallagher - unions...neither parties are anything close to what the people in this room would like...it's not the same thing as saying there is no difference between the two parties

34:40 - Gallagher - in Germany...Green Party...if you get 5% of the vote then you get a coalition inside the government...it's not the same thing with our system

42:00 - Rocky - we need a new party to send a loud message...the  two parties are in collusion to create a government for the wealthy.  don't just change the players...change the game.  principles.  critique of Obama...his abuse of power...incarceration with no trial.  we can't settle for the lesser of two evils.  we can't settle for the same game

44:00 - Flowers - that's the system that we have right now.  leadership does what it needs to do to twist arms, bribe, withhold chairmanship positions, whatever they have to do to get members of congress to do what they want them to do.  so it's not about who we elect...it's about changing that system.  so go ahead and vote but let's build a movement that changes that system first.  and how do we do that?  a key part of that is democratizing the economy...

46:00 - Flowers - two political parties serve the one percent...they divide and conquer us.  need to create alternative systems...a democratized economy in this country.  the year of the cooperative.  employee owned businesses.  democratized business.  the growth of local currencies.  efforts to create public banks...more people joining credit unions.  these put more control and benefit into the hands of the 99%.  this is how we undermine the corporate power.  sustainable food networks...decentralizing our energy production.  we don't need legislation to do these things.

48:35 - Flowers -  each of us has a finite number of resources.  so where are you going to put your resources?  where are you going to put your time and your money?  are you going to put it into trying to elect somebody into this current system that's broken?  or are you going to put that into building something?

49:20 - Flowers -  regarding occupying spaces...at a certain point...the resources that you're putting into maintaining that public space take away from the next steps which are doing the outreach into the communities and building, educating and growing this movement.  we need to use our resources to build...and not just maintain.

50:35 -  Gallagher - fusion voting...a significant difference between Obama and Santorum.  Ralph Nadar helped elect George Bush

53:15 -  Welsh  - what happened to labor's friend in the white house?  Bipartisan attack on the working class.

54:20 - Rocky - concern with environmental issues...climate change.  Attack on Obama...corrupting influence of money.  It's about all the people in power.

57:30 - Gallagher - you use a vehicle for what it can deliver for your interests

58:40 - Flowers - have to be independent of political parties...shift power to the people.  We don't have a lot of time.  Collective strength and collective wisdom.

1:01:01 -  Welsh  - socialism...advocates a more radical approach

1:01:02 - Flowers - resisting the world that we don't want to live in and creating the world that we do want to live in

1:01:08 - Flowers - don't cut social programs...or else.  educate yourself on how non-violent movement effect change.  nine pillars.  corporate pressure on civil servants.

1:17:30 - Flowers - we live in a mirage democracy.  we have two corporate candidates that are chosen for us and we don't really have any choice right now.  that's the reason why Rocky can't win this year

1:20:30 -  Attendee  - occupy government, replace congress movement.  replace corrupt politicians.

1:25:50 - Attendee - There's a 1% who is controlling us.  We need justice.  It reminds me of the situation in India when the British were in control.  How did the Indians do it?  How did they get rid of the British?  They did it through Gandhi and his Salt March.  You're all familiar with his Salt March?  He found the one thing in India that they all had in common.  They all had to pay a tax on salt.  We are told to go out and organize...but around what?  We need something to organize around.  We need to find that one thing and boycott it to prove our strength...because we are the 99%.

1:31:40 - Welsh  - capitalism is the root of our problems

1:35:00 - Attendee - freedom socialist party

1:36:00 - Attendee - the first step in taking our power back is taking your money out of all the commercial banks and moving it into credit unions or community banks...corporations didn't get big on their own...they got big because we pay them...so change your phone company...and put your money where your heart is.

1:46:00 -  Gallagher - stands that we make that might be satisfying morally or philosophically might not be effective politically

1:53:30 - Flowers - I don't think we're at the stage where we're going to see a real policy change until we build the movement to make it happen.  Let's create a green energy economy, rebuild our infrastructure with public transportation, let's create real jobs instead of giving corporate welfare let's use our public dollars to invest in our own nation.  We have to be aware that during this election season the conversation that's going on amongst the candidates is a false conversation limited by what their corporate funders allow them to say and the real conversation is happening in the occupy movement in our communities  Figure out how you're going to feed each other and how you're going to provide healthcare for each other and what are the needs in your community and how do you create cooperative businesses to start meeting those needs.  That's how we're going to change this country.

Banned From Bleeding Heart Libertarians

Where to start?  Let's try and get the obvious out of the way first.  A while back I created a thread on the Ron Paul Forums asking for people's thoughts on whether another member (whose views I did not agree with) should have been banned...Should ProIndividual Have Been Banned?

One of the members had this to say on the subject...

Site owners can ban whomever they want for whatever reason they want. They have the right to do it. Nobody else has a right to be here. What are good reasons for banning people? I don't know, that's up to the site owners to decide based on what they're trying to accomplish. I'm in no position to second-guess it. - erowe1

The first three sentences should go without saying.  A website is a person's property and they can limit access to it for whatever arbitrary/legitimate reasons they want.  But should this fact restrict our freedom to challenge those in positions of authority?  Wouldn't it be strange if a forum dedicated to Ron Paul had an explicit rule about not challenging those in positions of authority?

Recently a member of the same forum shared this video of a fellow by the name of John Bush.  In this video he protests having been wrongfully banned from the Austin City Council....



Do you agree with what he is saying?  Should it matter?  Personally I do not agree with most of what he is saying...but I strongly support his right to question those in positions of authority.  To misquote Voltaire, "I disapprove of what you say, but I will defend to the death your right to say it."

Again, I get that a city council is public property while a website is private property.  But how/why/when authority is exercised over others on private property can offer a unique and valuable opportunity to understand how/why/when authority is exercised over others on public property.

With that in mind...here are the goals of this post...

1. Promote the BleedingHeartLibertarians.com website/concept
2. Encourage people to make the effort to understand fundamental economic concepts
3. Encourage people who do understand fundamental economic concepts to make the effort to meet people half way.  
4. Promote tax choice
5. Promote Vermin Supreme for president 
6. Encourage people to question when somebody is banned
7. Encourage a broader definition of censorship

It might seem like I'm trying to accomplish too much here...but it's all tightly tied together.  For example...I can't promote the Bleeding Heart Libertarians (BHL) website without warning you that chances are really good that you're not going to make heads or tails of most of their blog entries.  This isn't because you're stupid...it's simply because their blog entries are written by PhDs who generally only have to worry about communicating their ideas to other PhDs in the same field.

One of the guest contributors to the BHL website, Peter Boettke, recently wrote a blog entry on the relationship between economics and philosophy.  In one of my comments I stressed that all the contributors to the BHL website should really consider making an effort to meet people in other fields half way.  Unfortunately, you won't be able to read my comment because the owner of the BHL website, Matt Zwolinski, deleted every single one of my comments from his website (again, this is his prerogative).  But...you can still read a reply to my comment...

Dittos. This blog entry, and particularly the comments, has basically made my head hurt and left me bewildered.  Oh, well. I guess this one is just inside baseball and I should leave it to the pros. - Rod Engelsman

If Peter Boettke and Rod Engelsman don't make an honest and genuine effort to meet each other half way then they both lose.

If you do happen to understand all the concepts discussed on the BHL website then power to you.  If not, then look the concepts up on Wikipedia.  If that doesn't help then by all means please post a comment that lets the BHL contributors know exactly which aspects you're struggling with.  You can signal that you made an effort to meet them half way by encouraging them to improve the Wikipedia articles that failed to help clarify the concepts in question.  They really shouldn't have a problem doing so given that Wikipedia itself was inspired by Hayek's concept of partial knowledge.  If you're concerned with people judging you for asking a "stupid" question then just post your comment anonymously.

So why in the world am I promoting a website that I was just banned from?  The answer can be found in the name of the website...Bleeding Heart Libertarians.  The goal of the website is to address the common perception that libertarians do not have hearts.  Or perhaps the goal of the website is to help libertarians understand the value in having a heart?  Or perhaps the goal of the website is to help liberals understand the economic arguments for libertarianism?  Or perhaps the goal of the website is to combine moral and economic arguments into one powerful argument?

Whatever its true goal is...the BHL website is notable for recognizing that a problem does exist somewhere in this general area.  For example, here's what Vermin Supreme had to say about libertarians...

But I also believe that in order for that to happen we also have to take the responsibility for ourselves. We have to take responsibility for others. We have to offer mutual aid and support and care to our fellow citizens. It's those two things. The libertarians, you know, are just about abolishing the government and letting shit fall where it may. But I believe that's a mistake. I believe that we can dismantle the government gradually, if the citizens take up more of the slack. It's all a certain Republican idea you know...taking the government down. But they offer no alternative to helping people other than charity. I mean...civics, citizenship...Americans don't know what it means to be a citizen any more. 

If you haven't already done so then please vote for Vermin Supreme on Americans Elect.  Citizens taking up the slack is what tax choice (pragmatarianism) is all about.  If any citizens didn't want to take up the slack then they would still have the option to just give their taxes to congress.  The challenge is that to effectively evaluate the idea of tax choice you really need to have a decent grasp of a few basic economic concepts.

The problem is...trying to share these basic economic concepts is exactly what led to my banishment from the BHL website.  The last straw for Matt Zwolinski occurred on this blog entry of his...What We Can Learn From Drowning Children.  In this instance...not only did he delete my comments from the page but he also deleted his replies to my comments.  Fortunately, before he did so I managed to copy and paste our entire discussion over to my own blog...Fallibilism vs Fairness.

Again again...Zwolinski certainly has the right to delete whatever he wants from his website for whatever reasons...completely irrespective of whether his reasons are good, bad or ugly.  As I indicated in my Self-Ownership Survey...people should have the right to shoot themselves in the foot.

If I hadn't saved our discussion though...then none of you would have been able to read it.  So could Zwolinski's effort to delete our discussion count as censorship?  The way I see it...you are perfectly capable of choosing for yourself which comments you read and which comments you ignore.  The internet has made us all extremely proficient in filtering out trash.  But one person's trash is another person's treasure.  Do you really want somebody else deciding for you what counts as trash/treasure?  Personally, I'm leaning towards expanding the definition of censorship to include whenever somebody restricts your ability to decide for yourself whether something is trash/treasure.  This broader definition of censorship would allow us to argue that the government engages in censorship by blocking tax choice.

Hopefully I've made it clear that Zwolinski certainly had the right to delete my comments from his website.  Yet...hopefully it's also clear that it's my right to question his motivations for doing so.  Here's how I perceive his motivations...

On the Debate Politics Forum I created this thread...Why Is Your Partner Cheating On You?  My point wasn't to talk about cheating...yet a few people really felt the need to discuss my misunderstanding of how cheating really works.

Xerographica: SmokeAndMirrors, ok, here's the deal. I'll admit that I don't understand how cheating works and you'll admit that you don't understand how the invisible hand works. Deal?
SmokeAndMirrors: Nope. I understand the "invisible hand" concept perfectly well. I just have no reason to address it because your argument unraveled before I ever got there.  Like Goshin, I have now ceased to be interested.

A) SmokeAndMirrors was perfectly willing to discuss cheating.  B) She said she understood how the invisible hand works.  C) She "conveniently" ceased to be interested in further discussion when it came time to demonstrate her understanding of how the invisible hand works.

Zwolinski's behavior was nearly identical to that of SmokeAndMirrors...

A) Zwolinski was perfectly willing to discuss business discrimination and foreign intervention with me.  B)  He said he was "familiar" with the economic concepts that I had frequently mentioned.  C) He "conveniently" banned me from his BHL website rather than respond to any of my economic arguments.

Basically...we all failed.  They failed to acknowledge their perfectly reasonable ignorance and I failed to encourage them to meet me half way.  It wasn't a total loss though because these documented failures can provide others with the opportunity to learn from our mistakes.

That's the thing.  We all make mistakes...and we all only have limited resources...and we all have access to different information...and we all have different values.  Therefore, we shouldn't put all our eggs in one basket.  In other words... Scarcity + Fallibilism = Hedge Our Bets = Tax Choice.  This was the idea that I failed to convey to Zwolinski in our discussion on fallibilism vs fairness.

It just so happens though that I'm currently reading an excellent book on Reason and Persuasion.  This book, which makes Plato's ideas much more accessible, was written by John Holbo.  John Holbo is a contributor to the Crooked Timber Liberal website which is where he posted an entry on Selling Votes.  The comment that I shared on his entry led to the two of us having a long discussion on selling votes.  His willingness to discuss revealing preferences is partly what motivated me to purchase his book.  None of this would have occurred though if I had been banned from the Crooked Timber Liberal website.

The kicker is that I was technically banned from the Crooked Timber Liberal website.  Nearly two months prior to commenting on Holbo's entry, I had posted a comment on Chris Bertram's entry on Renouncing the facts in the name of method (Mankiw channels Lukacs).  Bertram replaced my comment with this message...

[Crooked Timber comments threads are an opportunity to engage in conversation, not the granting of a soapbox for you to promote your private obsessions. Please go away. CB]

You can read my original comment here...Crooked Timber Liberals - Monopolizing the Facts.  Recently I discovered that now I am both technically and actually banned from the Crooked Timber website.

Chris Bertram, who is a liberal, and Matt Zwolinski, who is a libertarian, both saw my comments as trash.  That's why they saw value in eliminating my perspective from their websites.  What they couldn't see though were all the possible future discussions that they had blocked.      

This ties into Bastiat's concept of the seen vs the unseen as well as Hayek's concept of conceit vs humility.  All our perspectives are valuable but extremely limited.  This means that it's easy to focus on what we can see but extremely difficult to focus on what we can't see.  It's easy for Zwolinski and Bertram to see the value of their own perspectives but it's extremely difficult for them to see the value of my perspective.  If it was easy for people to focus on what they couldn't see then they would have embraced tax choice a long time ago. As it is, political tolerance is blocked and/or ignored by men of the system...

The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. - Adam Smith

For the longest time we've debated what the government should do.  The solution is simply for the government to do what we pay it to do...no more and no less.  I may not agree with how you spend your taxes...but I will strongly support your right to do so.  If I do want you to spend your taxes on the things that I treasure...then I will rely solely on the persuasive power of the available evidence/facts.  As Milton Friedman strongly emphasized, "If we can't persuade the public that it's desirable to do these things, then we have no right to impose them even if we had the power to do it."

Fallibilism vs Fairness

Here's my comment on Matt Zwolinski's entry on What We Can Learn from Drowning Children.  The subsequent discussion between Zwolinski and myself prompted Zwolinski to ban me from the Bleeding Heart Libertarian website.

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Xerographica

You didn't even skim the surface of the problem.   The problem isn't just that there is a child drowning in a pool...the problem is that there is also a baby that a parent left in the car with the windows rolled up during summer.  The problem doesn't end there.  The problem is also that you only have $1 to spend correcting the problem.  Does the problem end here?  Of course not.  You also have the option to spend that dollar on a procreation licencing program.  If you think the problem ends here then you'd be wrong.

We're dealing with n+1 problems multiplied by n+1 solutions.  YOU see a drowning child so you think everybody should have a moral obligation to do something about that drowning child.  Do what though?  Should people spend their limited time/money trying to save that one child or spend their limited time/money trying to prevent future children from drowning?  Or should they spend their limited time/money trying to solve the problems that THEY see?

That's the thing...you don't realize how truly limited your perspective is.   You don't see all the other problems that other people have access to and you don't see all the other possible solutions that other people have considered.  That's why you failed to understand the point of this comment of mine.

If you want me to spend my $1 on trying to fix your problem then you need to convince me that your problem is more important than my problem.  Not only that but you need to convince me that your proposed solution to your problem will actually solve the problem.  Why should you have to persuade me?  Because in the process of doing so you might learn that my problem is more important than your problem and/or my solution is more effective than your solution.

Having studied International Development Studies at UCLA I can promise you that a ridiculous amount of your money was wasted on failed solutions to problems that you weren't even aware of.  From my limited perspective the only tried and true method of lifting people in other countries out of poverty was when we sent them our jobs.  American unions have unintentionally done more to help people in developing countries than any intentional effort by government.  This was the point of my blog entry on the Dialectic of Unintended Consequences.

Well...this is probably the gazillionth time I've brought up Hayek's partial knowledge and Bastiat's opportunity cost...yet your posts still haven't put 2 + 2 together.  That's ok though...because maybe I'm wrong.  So...even though it's frustrating when you continue to ignore these basic but important concepts...the possibility that I might be wrong encourages me to embrace tolerance.  If you're willing to entertain the possibility that perhaps you might be wrong then check out the Wikipedia entry on tax choice.  It has links to Hayek's partial knowledge and Bastiat's opportunity cost.

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Zwolinski

You didn't even skim the surface of the problem.   The problem isn't just that there is a child drowning in a pool...the problem is that there is also a baby that a parent left in the car with the windows rolled up during summer.  The problem doesn't end there.  The problem is also that you only have $1 to spend correcting the problem.

No, that's not the problem. That's a problem you just made up. You're welcome to create your own hypotheticals. But in the one I presented, you're faced with a drowning child and the question is whether you have an obligation to rescue him or not.

If you're willing to entertain the possibility that perhaps you might be wrong then check out the Wikipedia entry on tax choice.  It has links to Hayek's partial knowledge and Bastiat's opportunity cost.

You do realize that I'm familiar with Hayek and Bastiat, right? So perhaps if I'm ignoring your ad nauseum appeals to their ideas, the explanation has to do with something other than my ignorance or close-mindedness?

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Xerographica

Economics is the study of scarcity.  I just made that problem up?  Fallibilism is the understanding that everybody makes mistakes.  I just made that problem up as well?

Why would you want to separate morality from reality?  That's the very problem that we need to deal with in the first place.  What we need is for voters to understand the value of allowing every single person to directly bear the costs of every moral and proper thing that they want the government to TRY and do.

It's fine if you think the government should be responsible for TRYING to save drowning kids.  But it's not fine if you don't understand the value of putting your own, individual taxes where your heart is.  Why isn't it fine?  Because it's one thing to make a mistake with your limited resources but it's another thing for you to make a mistake with my limited resources.  Scarcity+fallibilism = hedge our bets.  This is the same conceit vs humility concept you ignored last time.

So no, you're not at all familiar with Bastiat or Hayek if you think there's any value in pretending that there aren't price tags attached to every single good...moral or otherwise...that people want.  That means that, unless I'm mistaken, you're only making the problem worse.   If you do think I'm mistaken then for goodness sake just point out the error in  my logic.

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Zwolinski

Economics is the study of scarcity. I just made that problem up? Fallibilism is the understanding that everybody makes mistakes. I just made that problem up as well?

No. That's not what I said. The problem I said you made up was this:

The problem isn't just that there is a child drowning in a pool...the problem is that there is also a baby that a parent left in the car with the windows rolled up during summer. The problem doesn't end there. The problem is also that you only have $1 to spend correcting the problem. Does the problem end here? Of course not. You also have the option to spend that dollar on a procreation licencing program.

Like I said, you're free to make up whatever hypotheticals you want. But this one doesn't have anything to do with the hypothetical I presented. In that hypothetical, you have a choice between rescuing the child or not. Getting a baby out of a locked car or sending money to a parental licensing program isn't an option. So bringing them up is just dodging the issue.

Why would you want to separate morality from reality?

I have no idea what this means or why you think I'm trying to do it.

So no, you're not at all familiar with Bastiat or Hayek if you think there's any value in pretending that there aren't price tags attached to every single good.

For someone who talks so much about the value of humility, you display shockingly little of it.

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Xerographica

My hypothetical situation addressed morality, scarcity and fallibilism.  Your hypothetical situation only addressed morality.  That's why I asked you why you wanted to separate morality from reality.

Reality = morality + scarcity + fallibilism + + +

Yet...you have no idea what I meant when I asked you why you wanted to separate reality from morality.  You read my hypothetical situation but thought that I was just attempting to dodge the issue of morality by highlighting other extremely important issues that we HAVE to consider....scarcity and fallibilism.

So let me break my hypothetical situation down bit by bit and show you exactly where the scarcity and fallibilism are located.

Scarcity - In my hypothetical situation you only had $1.  This reflects that in real life you have limited resources.  Having limited resources forces you to prioritize how you spend your limited resources.    Do you spend that $1 on TRYING to rescue the drowning child or on TRYING to rescue the child in a car?  Having multiple options forces you to make hard decisions with your limited resources.

There is an opportunity cost to every thing you want in life.  If you spend that $1 on TRYING to save the drowning child then you forgo the opportunity to spend that $1 on TRYING to save the child in the car.  This is where partial knowledge comes into play.  Maybe you don't know how to swim.  Maybe the car is locked.  Your partial knowledge and opportunity cost decisions are unique to you.

Scarce resources are efficiently allocated when everyone makes opportunity cost decisions.  These decisions naturally incorporate people's  unique/partial knowledge.  This is how the invisible hand works.

Fallibilism - I keep typing TRYING in all caps to emphasize that there's no guarantee that A) your effort will be successful or B) your choice was the best possible use of your limited resources.  Maybe it would be a mistake to require that people obtain licences if they want to procreate.  Maybe it would be a mistake not to.

Reality - The problem with our current political system is that voting only deals with morality...much in the same way as your hypothetical situation.

For instance the private consequences of fulfilling "her duty" towards the poor will emerge with certainty if a rich woman votes for higher tax redistribution favoring the poor.  She can "consume" the "warm glow of fulfilling her duty" while her vote itself will be insignificant for whether or not she will indeed have to pay higher taxes. - Hartmut Kliemt, The Encyclopedia of Public Choice

If you want to help the poor...then  you need to put your own, individual, hard-earned taxes where your heart is.  This is the only way we can help ensure that scarce resources are efficiently allocated.  You need to decide what other valuable things that you are personally willing to forgo in order to help the poor...

Nevertheless, the classic solution to the problem of underprovision of public goods has been government funding - through compulsory taxation - and government production of the good or service in question. Although this may substantially alleviate the problem of numerous free-riders that refuse to pay for the benefits they receive, it should be noted that the policy process does not provide any very plausible method for determining what the optimal or best level of provision of a public good actually is. When it is impossible to observe what individuals are willing to give up in order to get the public good, how can policymakers access how urgently they really want more or less of it, given the other possible uses of their money? There is a whole economic literature dealing with the willingness-to-pay methods and contingent valuation techniques to try and divine such preference in the absence of a market price doing so, but even the most optimistic proponets of such devices tend to concede that public goods will still most likley be underprovided or overprovided under government stewardship. - Patricia Kennett, Governance, globalization and public policy

This is the opportunity cost concept..."When it is impossible to observe what individuals are willing to give up in order to get the public good, how can policymakers access how urgently they really want more or less of it, given the other possible uses of their money?"

This is why taxpayers should be allowed to choose which government organizations receive their individual taxes.  We need them to consider the opportunity costs of their tax allocation decisions.  We need all their partial knowledge to help determine what the public sector should produce.  Morality...and bleeding hearts are wonderful...but only when combined with a firm understanding of scarcity and fallibilism.  If we don't factor scarcity and fallibilism into the equation then we're divorcing morality from reality.  This is the equivalent of shooting ourselves in the feet.  Fairness is not worth failure.

Regarding humility...really?  I display shockingly little of it?  Look at my comments on  Kevin Vaillier's entries on contractualism.  I have no problem admitting when I don't understand a concept.  We would have resolved this issue long ago if you displayed the same willingness to admit when you don't understand a concept.  You're a philosophy guy.... no one expects you to understand economic concepts as well as you understand philosophical concepts. Yet you completely ignore me when I try and bring these essential economic concepts to your attention.  Maybe because you think you're familiar enough with them...but your posts sure indicate otherwise.

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Zwolinski

Go back and read this thread again, starting with my original post.Your original reply accused me of missing the point. But on closer examination it turns out that what that means is that I didn't discuss the point that you wanted to talk about.

And this is how it always is with you on this blog. You're a true believer. You've got your one idea about how to change the world, and the only thing you're interested in is convincing other people of its truth, usually with a healthy dose of links to your own blog. You can't approach a conversation with an openness to learning something new, to talking about something besides your own pet issue.

And this makes me tired. And I think it makes other people on this blog tired. Do you ever wonder why people aren't more responsive to pragmatarianism than they are? Do you wonder why people don't engage with your comments more than they do? Is it possible, in your mind, that perhaps the fault is not entirely with them?

At any rate, I'm tired of this. You've got your truth, and I wish you the best of luck with it. But please, preach it somewhere else.

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Xerographica


Read your post again.  Your point was that libertarians should support government efforts to help people in need.  How was my question to you not valid?  Why do you want to separate morality from reality?  All you had to say was..."here are my arguments for why we should only focus on the moral issues..."

You say that I'm not open to learning something new...but what did you try and share with me that I wasn't open to?  Can you list any concepts that I rejected or ignored?  Can you show me a single discussion between us where this occurred?

No, I don't wonder why more people don't engage with my comments.  Look at how you engaged with my comments.  You never once responded to a single economic argument that I made.  You couldn't respond because...obviously you lack an understanding of the economic concepts that I tried to share with you.

Let's take a walk down memory lane together...

Exhibit A - we discussed whether business owners should be allowed to discriminate
Exhibit B - we discussed if foreign intervention was ever justified
Exhibit B1 - this is the continuation of our discussion on foreign intervention
Exhibit C - I brought up my concern regarding the issue of conceit vs humility but your response was...

Believe it or not, not every book deals with your pet issue. Not every blog post on this site deals with it. And yet, sometimes, you can still learn something from them.

Exhibit D - you made a joke about pragmatarianism and I ran with it but no discussion followed

And that's it.  That's the extent of our interactions on your blog.  You were perfectly willing to discuss discrimination and foreign intervention with me but you never once discussed any economic issues with me.

So what do you do?  You block me from your blog.  But by blocking me from your blog you separate morality from reality even more!

Taxpayers With Scalpels

Here's my comment on Kevin Vallier's entry on contractualism...

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Nice write-up.  It's still not 100% clear to me but I'm getting there.  My favorite part of your post was the part about everybody and their moms.  My vote is for more informality in these blog entries...which is probably self evident from my own lack of formality.

Ok...so "justification".  Anybody ever watch the UK Office episode where David Brent is made redundant?  It's pretty awesome...which is why it really really sucks that there's no video clip to link to.  For those of you that are unfamiliar with the term...over there they say "you've been made redundant" instead of "you're fired".  In other words...there's no longer any justification for your employment with that firm.  Ah crap.

Justification goes along with the idea of "necessity".  In this discussion thread...good_in_theory brought up the pituitary gland and Gordon Sollars brought up how Washington's physicians bled him to death.  Is the pituitary gland necessary?  I'm pretty sure it is.  Is blood necessary?  Yeah...you gotta have enough blood.  Does it help for surgeons to know exactly which organs are necessary?  Yup

Unlike surgeons, congresspeople are not even required to have a high school diploma...though they all do.  Yet, just like surgeons...they are responsible for understanding the functions of every single part of the state.  Is congress itself truly necessary though?

What about the entire state?  Is it necessary?  In other words...is the state justified?  Well...Rothbard was certain that it wasn't.  In fact, if there was a button that would instantly abolish the state then he would have pushed that button until his thumb blistered.  Would you push that button?  Perhaps shemsky and 3cantuna would.

The state, like the human body, consists of multiple components that each serve a specific purpose.  This is the division of labor concept.  Unlike with the human body though...one person cannot truly comprehend the necessity of every single component of the state.  This is because what might be unnecessary for me might be necessary for you.

So the question is...why not just give each and every taxpayer their own scalpel?  Why not give them a button that they can push to deprive redundant government organizations of their own individual taxes?  Can you imagine 150 million taxpayers going after the state with scalpels?  For more info on this theory check out the Wikipedia entry on tax choice.

Tax Choice

Recently created an article for tax choice on Wikipedia.  It's not much...but it's better than nothing!  In the process I learned that the founder of Wikipedia, Jimmy Wales, based his idea largely on Hayek's partial knowledge concept.

Dude Where's My Ethical Consumerism?

My reply to Gary Chartier's reply to my comment on Matt Zwolinski's post on the New Student Libertarian Movement

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Dude, where's my ethical consumerism?  Yeah, all that stuff you mentioned is boringly clear to me so let's try a topic that you're evidently not familiar with...ethical consumerism.  What was so powerful about Charles Johnson's article?  Nothing.  Not a damn thing.  You know why?  Because he didn't even once mention ethical consumerism...and unfortunately neither did Rand Paul.

All Rand Paul had to do was ask Rachel Maddow if she would purchase goods/services from a business that engaged in discriminatory practices.  Obviously she would have said no.  Then he could have asked her if she would encourage a boycott of such a business.  Obviously she would have said yes.  Then he could have asked her, assuming that the business did not change its practices, if she would start a business to compete with the unethical business.  What would her response have been?  Obviously she can afford to start a business...so why wouldn't she have a responsibility to provide employment or products/goods to the people that were being discriminated against?

That would have been powerful.   But why would Rand Paul just stop there?

It's not hard to guess where you would have wanted the conversation to go..."by far the worst thing governments do is to make war"... Violence, Wars, and States

Clearly Rachel Maddow is a huge supporter of consumers being allowed to engage in boycotts...and obviously she's against wars.   So how would she have responded if Rand Paul had asked her whether taxpayers should be allowed to boycott wars?  Would she have said no?  Would she really argue that consumers should be allowed to boycott unethical businesses but taxpayers should not be allowed to boycott unethical wars?  Perhaps she would have asked how taxpayers could possibly boycott unethical wars.  Rand Paul's response would have been simple...by allowing taxpayers to directly allocate their taxes.

Rand Paul, Charles Johnson...and Gary Chartier...dudes, where's my ethical consumerism?  It sure wasn't evident in your own article.  Although you did recognize that war represents a misallocation of resources...but do you really think that taxpayers wouldn't also recognize that it represents a misallocation of their own hard earned money?  Do you really think that only you and Eisenhower grasp that war has opportunity costs?

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, 1953 

So here's my question to you, Gary Chartier. Do you support allowing taxpayers to engage in ethical consumerism?  In other words...do you support allowing taxpayers to directly allocate their taxes?

Why Is Your Partner Cheating on You?

The Analogy

For this analogy to work we have to assume that your partner is, for the most part, rational. This is because libertarians and anarcho-capitalists have to assume that taxpayers are, for the most part, rational...

Isn't that the central basis for the libertarian creed? The notion that educated free adults can be trusted with matches... not to mention their bank accounts and votes? If the masses are intrinsically stupid -- sheep -- then the paternalists are right and no future society of maximized freedom will ever be possible. - David Brin, Essences, Orcs and Civilization: The Case for a Cheerful Libertarianism

If you struggle with the idea that taxpayers (and your partners) are not sheep then please read this article by Paul Bonneau...The Problem With the 'People Are Idiots' Meme.

With that in mind...let's say that your woman...or man...is cheating on you. If you want them to stop cheating on you then it's absolutely essential for you to understand exactly why it is that they are cheating on you.

Given that your partner is probably not a sheep, we cay say with relative certainty that your partner is cheating on you because you are failing to meet their needs in one or more areas. If you can accurately identify exactly how you are failing to meet their needs...then you will be in a much better position to understand exactly what you have to to do in order satisfy their needs. If you can adequately satisfy their needs then you would eliminate their motive to cheat on you.

This entire process requires effective communication with your partner. You have to ask your partner..."what needs of yours am I failing to meet?"

• Am I not satisfying your physical needs?
• Am I not satisfying your emotional needs?
• Am I not listening to you enough?
• Am I not spending enough time with you?

The challenge is...you can't blame your partner for cheating. This is because your partner is, for the most part, not a sheep. That means that you have to be willing to honestly admit that you have inadequacies. If you're unwilling...or unable...to take an honest look at your inadequacies then you'll never be able to address them and your partner will continue to cheat.

If you want to completely eliminate the state...or reduce the heck out of the state...then you have to understand the needs of taxpayers. You can't just tell them over and over to stop cheating because cheating is wrong. Taxpayers aren't dumb...they aren't immoral...and they aren't sheep. So it's essential that you try and figure out why they are cheating. It's not that difficult...all you have to do is ask them..."which of your needs is the private sector not satisfying?"

• Is the private sector not satisfying your needs for national defense?
• Is the private sector not satisfying your needs for welfare?
• Is the private sector not satisfying your needs for education?
• Is the private sector not satisfying your needs for healthcare?

Allowing taxpayers to choose which government organizations receive their taxes would allow them to accurately and effectively communicate which of their needs are not being adequately met by the private sector. This information is priceless. Without it there's no way you'll be able to convince taxpayers to stop supporting the public sector.

The challenge is...this all depends on your ability to admit and acknowledge that the private sector is not perfect. Like every single one of us...it has its shortcomings. Are you willing to take an honest look at these shortcomings? If you can do so...then you will be able to take the necessary steps to address these inadequacies, failings and shortcomings of the private sector.

Let's Prove We're Not Sheep

Ok, let's spend a little bit more time considering the communication aspect of this analogy...because...this is where all the goodness is at. In technical terms we can refer to this as "revealing preferences". Do any of you remember those oldish commercials where people were asked what they would do for a Klondike Bar? That's a perfect example of revealing preferences. "Random" people on the street were asked if they would cluck and dance like a chicken for a Klondike Bar. Would you be willing to give up your dignity for a Klondike Bar? If you answered "yes" then you would be revealing your preference for the momentary enjoyment of a Klondike Bar over your momentary loss of dignity.

The question of whether you would forgo your dignity for a Klondike Bar is, in technical terms, known as an opportunity cost decision. Everything we want has opportunity costs. All the time/money we spend on one thing we value cannot also be spent on other things we value. This forces us to prioritize how we spend our time/money. The opportunity cost concept, which is arguably the most important economic concept, was first developed by Bastiat in his epic essay...What is Seen and What is Not Seen. Opportunity cost decisions help ensure the efficient allocation of limited resources. In other words...they help ensure that people who really want Klondike Bars are the ones who receive them.

If you've already read Bastiat's essay then you will of course know that Bastiat was considering the opportunity costs of taxes. We all stand to benefit as a society from lower taxes because you spend your money better than the government can spend your money. Spending your money allows your unique preferences to help determine the most efficient allocation of limited resources. If you can't reveal your preferences for a Klondike Bar then we can't really be certain if you should really have one or not.

Perhaps you're asking yourself..."but if he's such a big fan of Bastiat, then why doesn't he advocate for lower taxes or no taxes?" The thing is...if you understand the opportunity cost concept then you'll understand that there's absolutely no need to argue for lower taxes. By allowing taxpayers to reveal their preferences in the public sector...we'll be able to see what is missing from the private sector. If taxpayers spend their taxes on government Klondike Bars...then we'll understand that there is a shortage...or absence of...private Klondike Bars. With this information you'd be able to start a private organization dedicated to supplying Klondike Bars.

When it is impossible to observe what individuals are willing to give up in order to get the public good, how can policymakers access how urgently they really want more or less of it, given the other possible uses of their money? There is a whole economic literature dealing with the willingness-to-pay methods and contingent valuation techniques to try and divine such preference in the absence of a market price doing so, but even the most optimistic proponets of such devices tend to concede that public goods will still most likley be underprovided or overprovided under government stewardship. - Patricia Kennett, Governance, globalization and public policy

When it comes to the efficient allocation of limited resources...we can't rely on voting. Voting is good for a lot of things...but efficiently allocating resources is not one of them. This is simply because there's a huge information disparity between 1) asking somebody if they want a Klondike Bar and 2) asking somebody what they would do for a Klondike Bar. Given that you're the only one that knows what you would do for a Klondike Bar...we can begin to understand why congress can't even come close to accurately answering the question of how our taxes should be spent. This leads us to Hayek's concept of partial knowledge. Here's a great passage from his epic essay on The Use of Knowledge in Society...

The problem is thus in no way solved if we can show that all the facts, if they were known to a single mind (as we hypothetically assume them to be given to the observing economist), would uniquely determine the solution; instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge. To assume all the knowledge to be given to a single mind in the same manner in which we assume it to be given to us as the explaining economists is to assume the problem away and to disregard everything that is important and significant in the real world. - Friedrich Hayek, The Use of Knowledge in Society

Part of the answer is in your hand, part of the answer is in my hand...and everybody's partial answers are in the invisible hand. If we truly want to answer the question of what the public sector should supply then all we need to do is to allow taxpayers to choose which government organizations receive their taxes.

Ok ok, so my cheaters analogy is far from perfect. But if anybody wants to criticize it then you might as well go ahead and criticize a few of my other analogies while you're at it...

Aikido, Dune and Taxes
The Real World - Pragmatarian Rules

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When I posted this on the Ron Paul forums a member, AquaBuddha2010, twice asked me if there should be taxpayers..."You can know the answer by revealing what you believe at a fundamental level. Should there be taxpayers?"

This was my second response...


Do you think I'm God? That perhaps I've got the whole world in my hands? Do you know that song? I had to sing it all the time when I was growing up.

Not only do I not have the whole world in my hands...but I don't even have the United States in my hands...and I don't even have California in my hands...and I don't even have Southern California in my hands...and I don't even have Glendale in my hands...and I don't even have my neighborhood in my hands...and I don't even have my next door neighbors in my hands...

What's in my hands? My own unique but extremely limited perspective. Having served over in Afghanistan...where I witnessed people living without taxes...and having attended a public university which was partly paid for by the GI Bill...and having sat through way too many horror stories shared by my girlfriend who gets paid by taxpayers to give therapy to abused kids...then yeah...there should be taxpayers.

But given my awareness of how extremely limited my perspective is...then I'm very willing to concede that I might be wrong. The question is...why aren't you willing to concede that you might be wrong as well? Why aren't you willing to allow taxpayers to decide whether the public sector is indeed unnecessary?

Socialism failed because the people in charge were unable to admit that they might be wrong. If you can't admit that you might be wrong...then how are you any different?

Another Milestone - Anti-Pragmatarianism Propaganda

It's another hard-times milestone!  But beggars can't be choosers...right?  Over on the Ron Paul forums I started this thread... Why Shouldn't the Government Engage in Aggression?  In that thread, noneedtoaggress shared the very first anti-pragmatarianism propaganda...

"Can't allocate taxes toward propaganda.  Forever Pragmatarian."

What do you think?  Not bad eh?  If this had been the olden days then a copy with the typo would have been priceless.  So much for the olden days.  Well...if you do print it out...feel free to mail it to me and I'll sign it for you.  You could sell it on ebay for at least $400 for sure.

The state would allow people to allocate their taxes to some type of propaganda.  Yeah...because who knows where advertisement ends and propaganda begins.

It was a good thing I saved the image because a second later he replaced it with this version...

"The State won't allow me to allocate taxes to propaganda.  Forever Pragmatarian."

You have my thumbs up to widely disseminate this anti-pragmatarian propaganda around the internet.

Now...stare at this propaganda and listen to Natural Anthem by the Postal Service.

Pragma-socialism

Socialism is basically public ownership of the means of production.  Not quite sure what percentage of the means of production have to be publicly owned before a system qualifies as "socialist"...but as my scope of government diagram demonstrates...socialism is a continuum...



The fatal flaw with socialist systems is conceit.  This idea of a fatal conceit, which was popularized by Hayek, basically refers to a situation where you are so confident in the value of your idea that you use your  neighbor's home as collateral to help fund your idea...but you don't bother asking for their permission to do so.

Socialists by no means have a monopoly on conceit.  If we look throughout history...all the man made disasters boil down to conceit. Whether it was Hitler mortgaging Germany to pay for war or Mao mortgaging China to pay for industrialization...the root cause of all man made disasters has been, and continues to be, conceit.

When Obama made the analogy of Republicans driving the car (the economy) into the ditch...it should be clear to us that the car ended up in the ditch because Republicans were driving while under the influence of conceit.  When Democrats and Republicans hand the keys back and forth over and over and over...it should be painfully clear that neither party has a monopoly on conceit.

The opposite of conceit is humility.  As Socrates said,  "...it seems that I am wiser than he is to this small extent, that I do not think I know what I do not know."  In more recent times, Milton Friedman said, with very strong emphasis, "If we can't persuade the public that it's desirable to do these things, then we have no right to impose them even if we had the power to do it."

Would it be possible to have a socialist system based on humility?  In other words...what would happen if the public owned a majority of the means of production...but taxpayers were allowed to directly allocate their taxes?  If you wanted your neighbor to allocate his taxes a certain way...then you would have to try and persuade him to do so.

In the thread I posted on How the Invisible Hand Works, I tried to flesh out this type of socialism based on humility.  Pragma-socialism, as I've labeled it, becomes increasingly more difficult to imagine as you increase the percentage of public ownership.  Imagining 50% public ownership isn't too difficult....but what about 80%...or 90%...or 100% public ownership of the means of production?  Can you imagine a pragma-socialist system where the tax rate was 100%?  I sure can't.

Here's my comment that provides the basis for imagining a pragma-socialist system.

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TNAR, heh, you're sure interested in debunking a socialist system where taxpayers could directly allocate their taxes. Let me address the compromises first though and see if that doesn't help put the socialist system in context.

So the compromises. My goal is to try and come up with a reasonable compromise that both you and the liberals would accept. You're willing to accept Compromise A while liberals perhaps might be willing to accept Compromise C. Therefore...my challenge is to convince both sides to consider the merits of Compromise B.

Part of the value for your side is that offering Compromise B to liberals would force them to consider how the invisible hand works. This, in my opinion, would be priceless. Many people think they understand how the invisible hand works but when asked whether taxpayers should be allowed to directly allocate their taxes then we quickly discern the truth of the matter...Unglamorous but Important Things. Given that we live in a Democracy...we should really consider the value of helping voters understand how the invisible hand really works.

Your critique of Compromise B is that it wouldn't allow competition between the public and private sectors. Is this really the case though? How could somebody's spending decisions in the private sector not influence their spending decisions in the public sector? If you donate money to the Red Cross...would you also allocate any of your taxes to FEMA? If you pay for private healthcare...would you also allocate any of your taxes to public healthcare? If you pay for private education...would you also allocate any of your taxes to public education? If you donate money to Greenpeace...would you also allocate any of your taxes to the EPA?

As I'm sure you're aware...we can't just say that Democrats would do this and Conservatives would do that. People are more complex than party stereotypes. So what would happen if more and more taxpayers allocated their taxes to public healthcare? At some point the demand for private healthcare would decrease. Let's say that for some reason private healthcare failed to compete and went out of business. This is very unlikely but we're just engaging in a mental exercise. Now...libertarians wouldn't be able to say that the government did anything wrong...given that this was an act of the invisible hand. The consumers made their decisions.

The consumers' decisions would represent a step towards socialism. In other words...the invisible hand would have led us towards a greater percentage of public ownership of the means of production. If the invisible hand also decided that the public sector, rather than the private sector, should be responsible for education then we would have taken another step towards socialism. To be clear...I'm not saying that these steps will necessarily happen...right? That's because there's no way that anybody could truly predict the outcome of allowing the invisible hand to determine the proper division of labor between the private and public sectors.

The question is...how far down this path towards socialism could the invisible hand feasibly take us?

Let's say that enough people voted for the establishment of a government organization that was dedicated to supplying free cheese. Maybe people that wanted to work for the Dept of Free Cheese would genuinely care about giving free cheese to people who needed free cheese the most. Maybe these employees would work longer hours for less money and fewer benefits. Maybe they would cut overhead costs as much as possible. Maybe they would hold regular fundraisers to remind the American public why free cheese is important. It's kind of hard to think of government organizations behaving like non-profits isn't it?

What if the Dept of Free Cheese happened to stumble upon a cheese formula that was even tastier, healthier and more cost effective than any cheese you could buy on the private market? The demand for free cheese would skyrocket...more and more people would allocate their taxes to the Dept of Free Cheese and less and less people would buy private cheese. This would represent another step towards socialism.

Again...we're not looking at likelihoods...we're just considering how far down the path towards socialism the invisible hand could possibly take us. Conversely...we could also consider how far down the path towards anarcho-capitalism the invisible hand could possibly take us. We could consider a scenario where more and more people donated money towards a national militia and less and less taxpayers allocated their taxes towards the Department of Defense.

Songs with Platonic Relevance

A few of my favorite songs that have some relevance to Plato.

Indie Rock

O How I Enjoy the Light - Palace music
Where Is My Mind - The Pixies
Goin' Against Your Mind - Built to Spill
Waiting Room - Fugazi

Indie Pop

Geppetto - Optiganally Yours

New Wave

Ship of Fools - World Party
Caught In My Shadow - The Wonder Stuff
Always the Sun - The Stranglers
Two Worlds Collide - Inspiral Carpets

Chill Indie

Half Asleep - School of Seven Bells
Camino del Sol - Isabelle Antena

Chill Electro

Heaven's Gonna Burn Your Eyes - Thievery Corporation
Flowers Become Screens - Delirium
Sunshines Better [Talvin Singh] - John Martyn

Electro Rock

Staring at the Sun - TV on the Radio
Higher Than the Sun - Primal Scream
Out from the Deep - Enigma

Electro

Visions - Slam
Sunlight - Dj Sammy

Metal

Where Hope And Daylight Die - Summoning

Libertarianism and the Free-rider Problem

Over at the Bleeding Heart Libertarian blog, Damien S perhaps misinterpreted a comment of mine and warned me about the free-rider problem that would occur if people had the option to put their taxes back in their pockets.  His concern was misplaced though because as I mentioned in my post on Pragmatic Ethics vs Deontological Ethics, the free-rider problem is partly what led me to reject libertarianism.

Here are a few of my other blog posts where I mention the free-rider problem...

• The Free-Rider Problem
• Libertarianism
• The Blind Men and the Scope of Government
• Economic Fairytales?

It's an important topic though so figured it's worth another entry or two.  This entry will focus on considering the liberal spectrum on A) the free-rider problem and B) the following compromises...

• Compromise A:  People would be able to directly allocate their taxes among any organizations in the public sector and among qualified organizations in the non-profit sector.  For example...people could give their taxes to either the Red Cross or FEMA.  
• Compromise B (pragmatarianism):  People would be able to directly allocate their taxes among any organizations in the public sector.  For example...people could give their taxes to the Dept of Defense and/or the Dept of Education.
• Compromise C: The same thing as pragmatarianism...but people would only be able to directly allocate a certain percentage of their taxes...the rest of their taxes would be allocated by congress.

Anarcho-capitalists 

Anarcho-capitalists want to get rid of the government because they believe that taxes are theft and/or the private sector can do everything as good as...or better than...the public sector can.  Those that believe that taxes are theft support the idea of full self-ownership (see Self-Ownership Survey) while those that believe in the superiority of the private sector support the idea of the invisible hand (see Unglamorous but Important Things).

For those that believe in full self-ownership...there's absolutely no need for them to address the free-rider problem...given that property rights trump all.  That being said...I have yet to run across a proponent of full self-ownership that hasn't made some consequentialist arguments.  Here are a couple examples...

1. Kent's perspective of the free-rider problem
2. Stefan Molyneux's perspective of the free-rider problem...Unglamorous but Important Things (the video)

In terms of the invisible hand crowd...perhaps the best way to understand their perspective on the free-rider problem would be to read Bastiat's essay on the Seen vs the Unseen.

Compromise A

The strongest evidence that I have that anarcho-capitalists would accept this compromise is that it was proposed by Neville Kennard on an anarcho-capitalist website....If You Could Choose to Whom You Paid Your Tax.  Given the expanded options...it seems reasonable that anarcho-capitalists would choose this compromise over pragmatarianism.

Compromise B 

Full self-ownership crowd - Many have considered this compromise but probably all of them have rejected it.  For a perfect example check out Kent's critique of pragmatarianism.  For a less clear cut example check out the discussion that I had with the Benjamin Marks...the author of this anarcho-capitalist challenge... One Question that People Are Scared to Answer

Invisible hand crowd - This group seems to be a really small minority among anarcho-capitalists.  But there's no doubt in my mind that they are more open to pragmatarianism than the self-ownership crowd.  For a good example check out my discussion with James E. Miller in the comment section of this entry...My Reply to Jeffrey Sachs

Compromise C

Given the relative lack of interest in pragmatarianism...there's no reason to believe that there would be any real interest in a watered down version of pragmatarianism.  

Libertarians

Libertarians do not want to abolish government...they just want to reduce the scope of government.  Like anarcho-capitalists they can roughly be grouped into those that strongly support property rights (but not full self-ownership) and those that lean more towards the invisible hand (consequentialists).

Most academic libertarians are aware of the free-rider problem...

The primary line of justification that has been advanced for the power to tax is the problem of free ridership. If taxes were replaced by voluntary contributions, it would be impossible for anyone to claim that the state was involved in expropriating private property. At the same time, it is argued, people would have strong incentives to take free rides on the contributions of others. As a result, services such as civil order and national security, which we all value, are likely to be underfunded. - Ronald Hamowy, The Encyclopedia of Libertarianism 

In essence..libertarians have a free-rider problem double standard.  Libertarians basically tell liberals...we're willing to gamble on the things that you value (welfare)...but we're not willing to gamble on the things that we value (national security).

There are always exceptions to every rule though.  Unfortunately, Jeffrey Miron seems to be the only libertarian that I know of that has acknowledged this double standard...Poverty and Libertarianism.  If you know of any other exceptional libertarians in this regard then please share a link to where they acknowledge this double standard.

Compromise A

Tad DeHaven made an argument...Charitable Donations to the Government...that was in the same general vicinity as Neville Kennard's proposal.  Even closer to Kennard's proposal was Arnold Kling's proposal...

I think that allowing taxpayers to allocate their taxes would be an improvement, but why stop with government organizations? Why not allow them also to choose from competing charitable organizations? That is what I propose in Unchecked and Unbalanced. - Arnold Kling, My Version of Race Against the Machine

So we wouldn't be going too far out on a limb to say that libertarians would choose Compromise A over pragmatarianism.

Compromise B

Libertarians have shown very little interest in this compromise.  The most notable exception is probably Lupis42...yet he certainly has his concerns...Lupis42's Critique of Pragmatarianism.  One academic libertarian, who shall go unnamed, expressed great concern at the thought of allowing taxpayers to decide how much funding the department of defense would receive.  This would seem to give credence to the free-rider problem double standard.

Compromise C

Pretty much the same situation as anarcho-capitalism.  Given the lack of interest in pragmatarianism...there's no reason to believe that there would be any interest in a watered down version of pragmatarianism.

Liberals

Or, in other words, the ironic prospect that it might only be due to the presence of libertarians that we need a coercive state. - Declan, The Logic of Collective Action

Compromise A

So far I don't have any direct evidence with regards to liberals' stance on this compromise.  It seems logical though that if they reject pragmatarianism then they will also reject this compromise.

Compromise B

Liberals, by far and large, primarily reject pragmatarianism on the basis of coordination problems...which indicates that they lack a basic understanding of how the invisible hand works...Unglamorous but Important Things.

Compromise C

Here's an article that the progressive Cait Lamberton wrote on this compromise...Your Money, Your Choice.  In her article she offers evidence that it would be beneficial to allow taxpayers to have control over even a small percentage of their taxes.

Pragmatarians

We can see that anarcho-capitalists and libertarians are considerably more inclined to accept Compromise A while liberals are considerably more inclined to accept Compromise C.   As a pragmatarian I would be inclined to accept any of these three compromises...but it seems logical that Compromise B presents the most realistic compromise because it is roughly mid distance between libertarianism and liberalism.

In order to make progress towards a reasonable compromise we need more libertarians like Jeffrey Miron to acknowledge the free-rider problem double standard and more liberals like Cait Lamberton to recognize the value of tax choice (the invisible hand).  Personally, I'd be really interested in listening to a discussion between Jeffrey Miron and Cait Lamberton.