Ouch, My Most of Me!!

When I was growing up I faithfully read the comic strip section in the Los Angeles Times.  I remember my grandfather once asked me if they were funny.  I responded that they were...and he asked, "so how come you're not laughing?"

For some time now I've been faithfully reading the Crooked Timber Liberal blog.  So far there have been only two instances where something that I've read has made me actually laugh out loud.  Well...perhaps more like chuckle out loud.  Nothing too maniacal.

Both instances revolved around David Graeber's book on Debt.  The first instance occurred when I read Daniel Davies making a point regarding a wife swapping economy and the second instance occurred today when I read David Graeber's response to all the Crooked Timber Liberals that reviewed his book.  Seminar on Debt: The First 5000 Years – Reply.  Here's the punchline from his response to Henry Farrell's critique (see my post on Economic Fairytales)...

Again—I’m sorry to be rude, but I didn’t start this thing—one really wonders what this has to say about Prof. Farrell’s professional qualifications. After all, he is a Professor of Political Science and International Relations. Prof. Hudson’s work falls under his supposed area of expertise, not mine. Yet I, a lowly anthropologist, managed to figure out pretty easily what Hudson is saying, and Farrell, the man who receives a salary based on his presumed understanding of such matters, comes up with interpretations of Hudson that make the man himself laugh in disbelief.

Did Henry Farrell say "Ouch, my most of me!!" when he read this?  It's probably what I would have said...in reference to Episode 8 of Teen Girl Squad.  "Ouch, my most of me!!" is what you say when your bass guitar turns into a shark and then chomps off more than half of your body...or when somebody lobs a decent insult at you.

Over on the Ron Paul Forums I have my own critics to deal or not deal with.  Probably my most enthusiastic and creative critic is noneedtoaggress.  Here's what he posted in the thread with a decent amount of consequentialist discussion...

"Ouch, my most of me?"...yeah, not so much.  To drive the point home he created a new account on the Ron Paul Forums ("Pragmatarian") and then pretends to be my first follower..."We're All Pragmatarians Now": My Journey to Pragmatarianism.  Interestingly enough...David Graeber's lengthy response had this somewhat relevant tidbit...

This I guess is why I’m a radical, and not a liberal. Don’t get me wrong. Liberals have made magnificent contributions to the world. I might be an anarchist, but I have no desire to see anyone privatize the NHS—nor, interestingly, do any other anarchists I am aware of (though granted, I don’t know many anarcho-capitalists. I suspect it’s because they largely don’t exist, except on the Internet, which is crawling with them.)

This point is a bit confusing isn't it?  David Graeber says he might be an anarchist...but then he goes on to say that he doesn't want to privatize the NHS...unlike the anarcho-capitalists...who only exist on the internet.  Here's the rest of the paragraph...

But this is because as an anarchist, I see states as bureaucracies of violence, and make a distinction between state institutions, and public or better, common institutions, that happen to be run by the state because states rarely allow anyone but themselves to manage collective resources (unless it be for private profit.) There are collective institutions that cannot be run without recourse to violence—where you need to be able to call up the guys with sticks and guns or it all wouldn’t work. There are collective institutions—and I suspect large communal health arrangements are one—that could. I tend to see a collective health system as falling into the latter category so it never occurs to me it should be eliminated, even if currently run by the state.

What does David Graeber think the large majority of anarcho-capitalists crawling around the internet are actually saying?  Perhaps he should read my post on anarcho-capitalism and pragmatarianism.  Here's his conclusion...

What’s important to me is how to do it with as broad an alliance as possible—as anarchists such as myself who have been involved with OWS have consistently tried to do. How to find a common ground to push things further towards a free society, without any sort of consensus of just how far we can ultimately go?

After he reads my post on anarcho-capitalism then he should definitely read this post...Tax Choice - A Strategy for the Occupy Movement.

Pragmatarianism Disproved?

A couple guys from the libertarian forum just started an anarcho-capitalist blog.  Their blog is off to an auspicious start given that their first post was an in-depth critique of pragmatarianism...Pragmatarianism Disproved.

They cover many of the relevant economic concepts...with graphs even!  But what's really funny is that they based most of their critique on a 100% tax rate!!  Ouch...my most of me!  As I mentioned in my entry on pragma-socialism...try as I might...it's impossible for even me to imagine a pragmatarian system with a 100% tax rate.   I just can't wrap my mind around it.

My bottom line rebuttal doesn't directly address their points.  It addresses the fact that they used a 100% tax rate as their example.  That's what's really fascinating.  The Magna Carta Movement gave taxpayers the keys to the car and for some reason they decided to drive us from our current tax rate all the way over to a tax rate of 100%.  How do the guys from the LibertarianAnarchy blog explain the taxpayer's behavior?  

The most universal economic principle is that everybody wants the most bang for their buck.  This is what Adam Smith considered "self-interest".  The neoclassical economists refer to this as "maximizing utility" and the Austrian economists refer to this as "people acting purposefully".   

If we somehow ended up at a 100% tax rate then....as far as I can tell...there are only two possibilities... 

1. All those economists were wrong...people do not want the most bang for their buck

2. A tax rate of 100% would give taxpayers the most bang for their buck

I can argue for days and days against a government committee setting a tax rate of 100%...but I've got absolutely no argument against millions and millions of self-interested...utility maximizing ...individual taxpayers acting purposefully to set a tax rate of 100%.  

At this point it might help for me to explain how taxpayers would indirectly determine the tax rate.  Basically...the tax rate reflects how much the government does.  The more things the government does...the greater the justification for a higher tax rate.  The less things the government does...the greater the justification for a lower tax rate.  In a tax choice system...people could vote for things that they wanted the government to do...but it would be up to taxpayers to use their own, individual, hard-earned taxes to indicate exactly what the government should do.  

For example...if taxpayers chose not to allocate any of their taxes to the drug war...then the scope of government would narrow....and people would pressure congress to decrease the tax rate.  If taxpayers chose to allocate their taxes to public healthcare...then the scope of government would expand...and people would pressure congress to increase the tax rate.  This is assuming of course that enough taxpayers allocate enough of their taxes to congress to maintain its existence.  

Regarding the moral arguments...

He truly doesn't care--at all--about the infringement of Natural Rights and libertarian ethic.

Here's what the anarcho-capitalist David Friedman has to say on the topic of moral/deontological arguments versus consequentialist arguments.  

The short version...

I generally prefer consequentialist arguments. I think I understand economics better than I understand moral philosophy, and possibly better than anyone understands moral philosophy. - David Friedman

The long version...

I guess the first thing is that it offers arguments which don't require that people already share your religion...using the term "religion" broadly. That as far as I can tell, nobody, whether deontological libertarians or communists or anyone else really has a really convincing argument to show that their moral views are right. Many people believe that they do but I don't think that they do. Ayn Rand, at least, presented an argument. Ayn Rand claimed in effect to have defeated David Hume's is ought problem. Hume argued that you couldn't derive on ought from an is. I have a discussion up on my webpage of the holes in Rand's arguments. As far as I can tell she simply didn't do it. I don't think it can be done as far as I know. So in order to persuade people by a natural rights argument there has to be some reason why they believe in natural rights to start with because you don't have any good arguments to show that they ought to believe it. Whereas my argument...it claims to show...it hopefully shows...that my system would be better in terms of the value that almost everybody already has. So I'm really saying if you regard natural rights to be really important...well look...in my system rights will rarely be violated. If you regard people being happy and being healthy and living long lives...look in my society people will be in effect wealthier than in societies with governments, therefore you should like the results of those things...and so forth and so on. So I think that I have an argument which does depend on convincing people that economics is relevant to human behavior but doesn't depend on convincing them of your particular right and wrong beliefs.

Now the further problem with at least the versions of deontological libertarianism that I'm familiar with is that in the form in which people often state them they lead to conclusions that nobody believes. I spend a chapter in Machinery and Freedom going through that and if you really believe that the solution to polution is to say that nobody is allowed to pollute anybody else's property without their permission well you can't really exhale because carbon dioxide is a pollutant and you can be sure that some of the carbon dioxide you exhale will go onto somebody else's property. And similiarly you can't turn on a lightbulb because your photons will trespass. And once you start trying to make a more sophisticated version of the theory which deals with those...pretty quickly you start running into the kind of arguments that you run into in the consequentialist defense of libertarianism. - David Friedman, Legal Systems Without Government

In my post on the opportunity costs of public goods...I shared a few videos of Rachel Maddow arguing for more spending on public goods.  In one of her videos she says...

Not every idea that is good for the country, is a profit making idea for some company somewhere.  It's never going to be a profitable venture for some company to come up with this idea and build it on spec.  That's not going to happen!  We need some government leadership, frankly, to get something done in common that's going to benefit the country as a whole. - Rachel Maddow, Lean Forward

Rachel Maddow was making a consequentialist argument.  Her goal is for the government to do things that "benefit the country as a whole".  The thing is...Rachel Maddow and I are not going to have a very productive discussion if she makes consequentialist arguments and I respond with deontological arguments.  It's like if she says something in English and I respond in Chinese.  If her target audience understands English...then why would I argue in Chinese?  If her target audience cares about benefiting the country as a whole...then why would I argue for property rights? 

Sure you could argue that property rights actually do benefit the country as a whole..but that would of course be a consequentialist argument.  If property rights do have any sort of measurable value/benefit...then why wouldn't the tax allocation decisions of millions and millions of taxpayers reflect this truth?

Here's what else the guys at the LibertarianAnarchy blog have to say about morality...

By analogy, the founder of pragmatarianism plays the role of a sort of amoral deity: concerning morality, he says that we ought to make no judgement.

Pragmatarianism is neutral on morality because everybody already has their own morals.  Pragmatarianism isn't a religion.  With regards to making judgments though...

Yesterday on Fox....Bill O'Reilly had Lt. Col Ralph Peters on his show.  During their discussion on Afghanistan...Peters said, "When we invest our blood and treasure I expect a positive return".  This is of course the universal "maximizing utility" concept that I discussed in the beginning.  Compare it to this quote that the guys at LibertarianAnarchy blog shared...

There is always open to each actor the prospect of improving his lot, of attaining a value higher than he is giving up, i.e., of making a psychic profit. What he is giving up may be called his costs, i.e., the utilities that he is forgoing in order to attain a better position. Thus, an actor’s costs are his forgone opportunities to enjoy consumers’ goods. - Rothbard

Coincidentally...David Henderson, over at the Econlog Blog, also saw the same show on Fox....Sunk Costs in War.  Here's a bit of my comment...

It's been a few years since I was stationed in Afghanistan, but looking through my photos in the folder which I dedicated to "crops"...I see figs, grapes, pomegranates, wheat, eggplant, etc...but by far the most common crop was the opium poppy. If a small village only had one crop then it would invariably be the opium poppy.

Whether it's a retired Colonel expecting a positive return from his taxes...or Rothbard discussing psychic profits...or Afghan farmers selecting the most lucrative crops...it should be self-evident that everybody wants the most bang for their buck.  This is the universal economic principle.

If we allow taxpayers to directly allocate their taxes...then we can be all but certain that they would behave according to this universal economic principle.  The question then becomes...why do so many supposed proponents of this principle struggle to recognize the value of pragmatarianism?  What am I missing?  Why wouldn't we want to give the taxpayers the keys to the car?  What are we afraid of?

That's the mystery!  The proof is in the pudding but neither side is willing to taste the pudding.  

OR...maybe I'm the one that is missing something obvious!  It kind of makes more sense that I'm the bonehead....versus everybody else being the boneheads.  Well...keep the critiques coming!  Eventually we'll solve the mystery.

Lupis42's Critique of Pragmatarianism

Lupis42 offered the following really great critique on my entry...A Taxpayer Division of Labor

I've been reading a bunch of your stuff over the last couple of days, because while I wanted to like it, I keep coming back to a series of fundamental problems: 

1st - Complexity. Imagine for a moment that, in a moment of sanity, Congress passes this measure for the 2012 tax year on. Because of the way congressional accounting currently works, allocating your tax dollars would be immeasurably difficult. For example, if a farmer allocates his money to farm subsidies, effectively lowering the taxes he should have paid in, does he get a refund check? What about all those people who, through deductions and credits, would pay effectively no income tax - do they need to allocate the income tax they pay to those credits then receive it back at the end of the year? Also, how granular can they get? Can they pick and chose (for example) which military projects get backed?

At anytime throughout the year people would pay their taxes directly to the various government organizations (GOs) of their choice.  They would receive a receipt and the GO would automatically send a receipt to the IRS.  The IRS would just make sure that everybody had paid the proper amount of taxes for the previous year.

It's pretty straightforward that if the government is just wasting your taxes...then everybody would want a refund.  Kind of along the same vein...if you're a pacifist and the government is spending your money on war then...chances are good that you'd want a refund.  Now...I'm not quite sure what happens to the refund concept when people are directly responsible for funding GOs that they value.  Do we see people asking for refunds from non-profit organizations?  Would an environmentalist ask for a refund from the EPA?  Why directly allocate your taxes in the first place if you're just going to want a refund?  If somebody wanted a refund then wouldn't they just give their taxes to the IRS as normal?

The granularity issue would be between the GOs and their supporters.  Well...perhaps it is primarily an issue with the military.  My mother was very much against the war...but as I was her only child...she definitely would have wanted to allocate her taxes...and then some...to try and ensure that my unit had adequate funding to purchase kevlar plates and the such.  In this case, the military would have received funding that it wouldn't have otherwise received.  So I guess we can imagine that the families of soldiers would actively try to ensure that the units that their loved ones were in had adequate funding.

For the people who don't have family members in the military, yet still value national defense, would they be inclined to allocate taxes to the Marines rather than the Army?  Or would they just allocate their taxes to the DoD?  This is an issue that the DoD would have to try and figure out...how it could maximize revenue without compromising its effectiveness.

The military projects issue is an interesting one.  I remember liberals criticizing the government for doing absolutely nothing to stop the genocide in Darfur.  But what if we had a non-profit peace keeping force that was capable of stopping genocide and/or ethnic cleansing?  Kind of like the A-Team but more substantial.  In other words...it would have a heart, brains...and muscle.  An army of liberals.  Personally, I could see myself donating to such an organization.  What would happen if more and more people donated their money to this non-profit while less and less people allocated their taxes to the DoD?

2nd - Inequality. Right now, around 50% of the populace pays income tax, and the top 10% pays more than 40% of the incoming revenue. Economics will encourage them to divert all of it to programs that, in one way or another, directly benefit their firms (i.e. Raytheons CEO will direct money to military programs that involve Raytheon projects, Solyndra's CEO will send his money to the line item "loan to Solyndra", etc.) 

If self-interest promotes the general interest in the private sector...then why wouldn't self-interest promote the general interest in the public sector?  Why do corporations engage in philanthropy?  Is it philanthropy if a company that sells products to the Red Cross makes a donation to the Red Cross?  Does doing so guarantee that the Red Cross will continue to purchase products from that same company in the future?

Here's a passage from my very first poli-sci textbook...A Delicate Balance by Paul Light...

Roughly one out of every six Americans currently works for a private firm that receives federal contracts. Roughly two-thirds of those contracts came from the Department of Defense, which accounted for over $120 billion in 1997, and roughly two-thirds of those defense dollars went to just five firms: Lockheed Martin (airplanes), McDonnel Douglas (airplanes), Northrup Grumann (airplanes), General Motors (tanks and trucks), and Ratheon (weapons systems). 

The textbook was published in 1999...so...feel free to come up with updated stats if you feel they are pertinent.  The point is...who would complain if Lockheed Martin or McDonnel Douglas or Northrup Grumann or General Motors or Ratheon allocated their taxes to the DoD?  Surely none of their employees would complain.  Surely none of the people who valued national defense would complain...well...unless they believed that those corporations were somehow overcharging the DoD.

How would it help the environmentalists to complain that the DoD was "overfunded"?  How would criticizing the DoD help people understand the value and importance of the EPA?  The same concept applies to people who value public education, public healthcare, infrastructure, etc.

What about tax repatriation holidays?  If it would be economically sound for corporations to allocate their taxes to the GOs that they directly benefit from...then what incentives would they have to hide their profits overseas?

3rd - Choice. Whoever (Congresscritters, I assume) is responsible for determining what line items are available for taxpayer choice, and how they are worded will have a huge amount of power. Previously, the way a Congresscritter got a pork project funded was to agree to support another Congresscritter's project. Now all they have to do is write good copy.

Right now you have 0% control over how your taxes are spent.  We'll always disagree with how other people spend their taxes...but at the end of the day we'll have to recognize that other people will disagree with how we spend our taxes.  This is the essence of political tolerance.  Clearly though you can't be the only one to define something as a "public good".  Sure..I could make the argument that it's a "public good" for me to take a vacation to Madagascar...but the positive externalities are negligible.  For the most part I've said that voters would determine the functions of government and taxpayers would determine which functions to fund.

4th - Law Enforcement. Theoretically, the public can now defund unacceptable forms of law enforcement (e.g. the war on drugs), but this does nothing for the actual criminality of the laws on the books. This will lead to highly selective enforcement, which is even worse than consistent enforcement because it allows corrupt, bigoted, or agenda driven targeting of people. Even more problematically, if the taxpayers were to defund prisons while funding enforcement, for example, it would be impossible for even fair-minded, honest, diligent enforcement officers to actually apply the law. If some programs are made contingent on 'end-to-end' funding, then we're back at problem 3, but with more of a vengeance.

When I was pulled over for my speeding ticket...(see my post on the Opportunity Costs of Public Transportation) I asked the officer if it was a coincidence that I always drive the same speed in my old Toyota Tundra...and have had cops right behind me several times...but I end up getting a ticket the one time I borrowed my friend's Mercedes.  Heh...like the cop would admit that he pulled me over because I was driving a Mercedes.  I also asked him why he didn't give everybody who was driving over the speed limit a ticket.  He literally passed people who were breaking the law to give me a ticket.  Here in Los Angeles nearly everybody drives over 65 mph on the freeway.

If people want to pass a law...then they should have to put their money where their mouths are.  It's not enough for people to say that something should be illegal...they need to understand that if they want something to be illegal...then they will be the ones responsible for ensuring that the law is enforced.  As I mentioned in my post...it's a sign of maturity to accept responsibility for one's decisions.  If people aren't mature enough to accept responsibility for the laws that they voted for...then it's not a bad thing if those laws are not properly enforced.

This of course ties into the opportunity cost concept.  If you want people to purchase your product...then it's your responsibility to convince them to forgo the other products that they value.  If you want other people to pay for your law to be enforced...then you should have to convince them to forgo the other public goods that they value.  This is how we ensure the best possible use of scarce resources.

What you're saying in essence is that...the current method of dealing with crime is the best method of dealing with crime.  How could anybody truly know that?  What you're doing is blocking heterogeneous approaches to crime.  Personally, I believe that an ounce of prevention is worth two of cure.  My grandfather was always fond of saying that idle minds are the devil's workshop.  Or something like that.  If I only have a limited amount of money to spend on the problem of crime...which is certainly the case...then I'd spend it on sponsoring activities that offer at-risk youth with more choices besides joining a gang.  Is this the best approach?  Again, I can't know that.  What I do know is that the only way we can truly discover the best approach is if we allow people to support multiple approaches.

Is there a demand to solve the problem of crime?  Yes.  Should organizations have to compete for the  resources to solve this problem?  Yes.

The rest aren't a per se objection to Pragmatarianism wholesale, because they could be applied to our current systems too, but they are relevant when considering it as an alternative to Libertarianism. 

5th - Rate Setting. There's still no good feedback mechanism on what the size of government should be, just it's role. Fundamentally, your objection to Liberals and Libertarians is that each claims to know the optimal size of government, which you want to let the market decide, but unless you propose to allow taxpayers to allocate up to 100% of their taxes to their own tax rebates, Pragmatarianism offers no alternative but to elect either Liberals or Libertarians to set the tax rates.

If I'm an environmentalist...and I want people to allocate more of their taxes to the EPA...does raising the tax rate mean that non-environmentalists will somehow become environmentalists?  Probably not...it just means that I end up paying more of my own money to the EPA.  If I want other people to allocate more of their taxes to the EPA then I have to convince them of the value of the EPA.

6th - Rights. There's nothing in here that addresses the ability of, say, congress interfere in other ways, e.g. criminilaizing activities that have no non-consenting victim (drug use, gambling, prostitution, home-brewing, prayer, free speech, etc. 

True.  Coming from libertarianism...I have my own views regarding rights...and those views won't change if a pragmatarian system was implemented.  Pragmatarianism is all about KISS....Keep it Simple Stupid.  By keeping it completely nonpartisan...it helps to focus the debate.

Ultimately, I like the general idea and it makes a lot of sense in conjunction with a smaller, more limited government, but I have a hard time seeing it work without a much more Libertarian state than we have now.

As a web programmer I spend a lot of time looking for bugs in the code.  It's really frustrating when something should work...but it's just not working.  I'm always like...hmmm...why isn't this working?   To find the bug in the code I have to test each portion of the code separately.  This allows me to narrow down the search.

If you take a look on my page on libertarianism you'll see I created a timeline of prominent libertarians' perspectives on the scope of government.  All those guys were/are brilliant...so why aren't their arguments working?

Pragmatarianism is a method of debugging libertarianism.  It removes the debate over the tax rate and it removes the debate over whether something is a genuine "public good" or not.  The only thing remaining is whether congress can allocate public goods more efficiently than taxpayers can.  It is my firm opinion that this is where the bug is located.

Can resources truly be efficiently allocated by proxy?  Well...parents purchase things for their kids.  That's one or two adults representing the interests of one or two kids.  Well...what about Christmas?  Santa Claus is responsible for giving gifts to all the kids of the world...right?  Well...what about Jesus?  Jesus died for all of our sins...right?  Well...what about congress?  Can 538 congresspeople truly represent the public interests of 300,000,000 people?  Well...as I argued in my post on the divine disparity...it's certainly progress in comparison to having one king represent the public interests of all his subjects.

Kids want to believe in Santa Claus?  Fine...no problem.  People want to believe in God?  Again...no problem.  People want to believe in congress?  Sure...no problem...as long as they respect my beliefs and allow me to directly allocate my taxes.

In other words...the bug in the political system is intolerance.  Why haven't more people come to the same conclusion?  As I argued in my post on the The Devil's Advocate for Public Goods...we think we are all "civilized" aka "all grown up" but we're really not...we're always in the process of growing up.

When I was a child, I spake as a child, I understood as a child, I thought as a child: but when I became a man, I put away childish things. - 1 Corinthians 13:11

Tradition, thou art for suckling children,
Thou art the enlivening milk for babes;
But no meat for men is in thee.
Then --
But, alas, we all are babes. - Stephen Crane

It might be a mistake to implement pragmatarianism...and it might be a mistake not to implement pragmatarianism...but I'm pretty sure it's a mistake not to seriously consider the idea.  So... kudos for seriously considering the idea!

Kent's Critique of Pragmatarianism

Kent "The Hooligan Libertarian"...recently dedicated an entire blog entry to his evaluation of pragmatarianism.  Lot's of good criticisms from a very strong "rights" based perspective.

Kent and I have had quite a few surprisingly reasonable exchanges.  Here's our first discussion...Abortion: This Libertarian/Anarchist's position.  The discussion started off addressing abortion from the perspective of property rights and then transitioned into a discussion on taxes.

My position was that abortion was unethical from a strict interpretation of property rights.  As soon as unique  DNA is created the individual has the right not to have their property violated in any way.  The concept of property is only meaningful when there is some way to differentiate what I own from what you own.  When a woman is pregnant it becomes a situation where the woman can do whatever she wants with her body right up until the point her actions harm the individual within her.

From a pragmatic perspective though I believe that abortion should be legal.

For a couple other exchanges between Kent and I you can check out these search results.

For a critique of pragmatarianism from a revolutionary communist's perspective check out A "Hard Times" Milestone.

A "Hard Times" Pragmatarian Milestone

BBQs are pretty much the best.  Eggplant, zucchini, Portobello mushrooms, hot dogs, steak and ribs are the items that my friends and I typically BBQ.  But every once in a while we get lazy and just BBQ steak...or just hot dogs.  We've come to refer to these sparse BBQs as "hard times" BBQs.  The "hard times" meme quickly dispersed and we use it in a broad variety of situations.

For example...here's a "hard times" milestone for pragmatarianism.  It's the first blog entry that somebody besides me has dedicated to the concept.  What makes it a "hard times" milestone is that the blog entry is a criticism of pragmatarianism.  heh.

Opportunity Cost - The Barefoot Bum

As criticisms go it's not bad.  It's definitely worth taking a look at if you're vaguely interested in the possibility of applying market principles to government organizations.

[Update]  Hmmm...guess I should have realized that The Great Leap Forward is a touchy subject for revolutionary communists.