Markets maximize the exchange of information by maximizing the rationality of persuasion

Another reply to Adam Gurri

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Language isn't subjective... it isn't objective... it's conjective!  Yeah!  Thanks to our exchange I now know this!  And I'm sure it's relevant to our disagreement... but I'm not quite sure just how relevant it is.

Personally I've invented quite a few words.  But I'm not much of a wordsmith so I would be really surprised if any of them caught on.  One word that I invented is "linvoid".  It's a word for a word that needs to be invented.  McCloskey spotted a linvoid and she channeled her inner wordsmith and voila!  Now we have "conjective"!

I think that, when it comes to the topic of persuasion... there are quite a few pretty big linvoids.

Frank the salesman knocks on the Smith's door.  Billy Smith answers the door.  Billy's just a kid.  Does Frank try and persuade him to buy his product?  No.  Why not?  Because Billy's just a kid!   So Frank doesn't try and persuade him to buy his product.  Instead, Frank tries to persuade Billy to go get his mom or dad.

Billy runs to get his dad.  Bob Smith comes to the door and Frank introduces himself and tries to persuade Bob to buy what he's selling.  What's Frank trying to sell?  Something tangible like a vacuum?  Ok.  Something intangible like religion or vegetarianism?  Sure.

If Frank successfully persuades Bob to become a vegetarian... then Bob will choose to stop buying meat.  The choice is Bob's to make.  So we wouldn't be very surprised if Frank does try and persuade Bob to stop buying meat.  It's entirely rational for Frank to take the time and make the effort to share his information about the benefits of vegetarianism with Bob.  Why is it rational?  Because if Bob sees the merit/truth/validity of Frank's information... then Bob is entirely free to act on it.

Would it be rational for Frank to try and persuade Bob to become a pacifist?  Kinda!  Bob can certainly buy the idea of pacifism... but it's not like he can very easily act on this idea.  It's a lot harder to boycott war than it is to boycott meat!  Clearly it's not impossible to boycott war.  Bob could certainly stop paying taxes and risk going to jail.  He could also stop earning money... then he wouldn't have any taxes to pay.  Given that there's a much higher (transaction?) cost for boycotting war than boycotting meat... it becomes that much less likely that Frank would take the time and make the effort to persuade Bob to become a pacifist.

What comes to mind is locus of control (LOC).  Choosing to boycott meat is a decision that Bob is entirely free to make.  So the locus of control is internal.  Choosing to boycott war is a different story.  Bob is not entirely free to make this decision.  So the locus of control is more external.  The terminology doesn't work perfectly though because LOC is primarily an issue of perception.  But in the case of boycotting war... the cost of doing so is real rather than imagined.

Another thing that comes to mind is modular versus monolithic.  In terms of persuasion... vegetarianism is modular while pacifism is more monolithic.  Each time a person becomes a vegetarian... marginally less meat is purchased/produced.  But each time a person becomes a pacifist...  marginally less war is not purchased/produced.  Modularity allows for small and incremental improvements to be made.  Modularity facilitates the exchange of less desirable traits for more desirable traits.  In other words... modularity facilitates evolution/progress.

In some cases the "product" being sold has to be monolithic.  For example... when the product is mutually exclusive.  Like in the example of the confederate flag.  Other examples include gay marriage and the legality of drugs.  These are yes/no issues rather than matters of degree.

What would happen to persuasion if we replaced voting with spending?  Well... we would clearly see the intensity of people's preferences.  This would allow us to make far more informed decisions with regards to persuasion.

From my perspective... society works better when more, rather than less, information is exchanged.  We maximize the amount of information that's exchanged by maximizing people's freedom to act on information.  This is how and why markets work.  This is how and why it's a problem wherever and whenever markets are missing.

So how many linvoids did you spot?  In theory... creating words for all the biggest linvoids would facilitate a far more productive discussion on the topic of persuasion.

Tax Choice on Facebook

I took the liberty of creating a page on facebook for tax choice.  If you like the idea of allowing taxpayers to choose where even just a small percentage of their taxes go...then hopefully you'll "like" the concept on facebook.

The Psychology of Political Change

[Update 25 Nov 2011] The Crooked Timber liberals finally decided to publish this comment.  They published plenty of later comments before publishing my comment so now I'm even more curious what their hesitation was.

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Those cheeky Crooked Timber liberals.  They are "cheeky" because they are over in the UK and because they deem it necessary to block a few of my comments.  Here's the first comment of mine that they blocked...Crooked Timber Liberals and now they've gone and blocked another comment of mine.  Here's my comment which I tried to post on their entry on Fatalism, Polling Data and Experimental Philosophy.

It's really no big deal that they block some of my comments...but I can't help but be curious how they rationalize their decisions to do so.

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Locus of control, which has already been mentioned, is the first thing that comes to mind...but Self-efficacy and Maslow's Hierarchy of Needs are two relevant psychological concepts that haven't been mentioned yet. Well...then the debate probably just boils down to nature versus nurture.

Obama promised everybody "change" but certainly the OWS protesters don't seem to feel like any real change was delivered. Does anybody feel like Obama followed through with his promise of real change? What would qualify as real change?

In the Bible "miracles" were possible if people had enough faith... "Jesus answered and said unto them, Verily I say unto you, If ye have faith, and doubt not, ye shall not only do this which is done to the fig tree, but also if ye shall say unto this mountain, Be thou removed, and be thou cast into the sea; it shall be done." Mathew 21:21

How many people have lost faith in the current political system? How pervasive is political alienation? Who has the real power?

In ancient times people believed that the king had "divine authority". Then some Barons lost faith in the king and took the power of the purse away from the king. Did that qualify as real change? Since then we've learned how scarce resources are efficiently allocated. Yet...parliament still maintains the power of the purse.

If we truly want real change...if we truly want to empower people...then we should allow taxpayers to directly allocate their taxes...aka pragmatarianism. Your ability to genuinely consider the validity of this idea reflects the degree to which your thinking has conformed to traditions. Conforming your thinking to traditions restricts your ability to think outside of the box.

Contrary to the bible...real change is not the result of faith...it is the result of doubt.

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

There is no logical or rational basis for 535 congresspeople allocating people's taxes. The only way to ensure the efficient allocation of taxes is to allow taxpayers to directly allocate their taxes. This would force taxpayers to consider the opportunity costs of their taxes. Millions and millions of taxpayers deciding whether they wanted to have their cake OR eat their cake would reveal their true values and guarantee the best possible use of limited public funds.