Prioritizing Public Goods

It's always interesting to juxtapose how various people respond to the same thing.  Take for example the Sandra Fluke - Rush Limbaugh controversy.

• Noah Smith's response: In which Steve Landsburg makes me lose my lunch
• Ira Stoll's response: Sandra Fluke's Amazing Testimony

My response, which I posted on Smith's blog, is probably pretty easy to guess.  If you've read my post on the Ostrich Response to Pragmatarianism...then it should also be pretty easy to guess that Smith has not responded to my response.  But...another reader choose to.  Here's our exchange...starting with my response to Smith...

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Public goods are wonderful...but it's just so bizarre that you never talk about opportunity costs.

Do you think this stems from receiving your college degree in physics rather than economics? It's been so long since I took Econ 101 but I'm pretty sure it covered the part about how economics is the study of scarcity.

Do you think that just because the government can print as much money as it wants that this somehow means that the government can just buy voters whatever they want? Or do you think that if we taxed the rich at a higher rate then the idea of scarcity would somehow lose its relevance?

Who cares if Rush Limbaugh said something that was politically incorrect. What I care about is understanding your perspective on how scarce resources are efficiently allocated.  Please make an economic argument that explains exactly why I should trust congress with my taxes.  Help me understand why they can spend my taxes better than I can.

You could even just critique my own perspective on the efficient allocation of scarce resources...Partial Knowledge and Opportunity Costs. Where am I going wrong?

The bottom line is...if you can't explain how scarce resources are efficiently allocated then Steve Landsburg and Rush Limbaugh will always have the upper hand.  No matter how politically incorrect they are...I'll stand by their argument that less taxes are ALWAYS better than inefficiently allocated taxes.

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JohnR said...
@xeographica: I'm genuinely impressed by your ability to define Limbaugh's (and his enthusiast's) remarks as "politically incorrect". My speculations on your upbringing and socialization success would not serve to advance the discussion so I'll keep them to myself. I do wonder idly what you would regard as "morally repugnant" or "offensive", but of course those are such subjective and indeed loaded terms. At any rate, with regard to your argument, I intend to simply disregard it. Anything that is proposed by someone whose moral structure is so malformed becomes highly suspect to me. It's similar in my opinion to the sort of argument that you hear people propose who find Ayn Rand to be an exciting and important philosopher. In other words, it's like listening to 12-year-olds discuss whether BloedSnaeke or MegaSplatterDethKult was the Greatest Band Of All Time - there's a very strong likelihood that it will be a near-complete waste of time, and God knows I'm already too far behind on things that are important.

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JohnR, obviously I was raised to focus on substance rather than style. Why don't I find what Limbaugh said to be "morally repugnant"? Well, in an Afghan village a distraught woman told us that the Taliban had recently beat her husband to death because he refused to give them his family's meager supply of food. In my book that's what qualifies as "morally repugnant" behavior. Limbaugh's behavior, in comparison, only qualifies as politically incorrect.

"there's a very strong likelihood that it will be a near-complete waste of time, and God knows I'm already too far behind on things that are important."

Oh the irony. If you had gotten off your moral high horse you might have understood that your point forms the basis of my argument. God knows your priorities...and you know your priorities...but does congress have any idea what your priorities are?

Does congress listen to your prayers like God listens to your prayers? Do you think that you are the little sparrow that congress has its eyes on?

Help me understand why you have such strong faith that public funds will be efficiently allocated when congress has no idea what any of our priorities are. In case anybody wasn't aware of this...in economic terms the "opportunity cost" concept helps reveal what our priorities are. Whether you decide to have or eat your cake reveals your priorities. Putting your time/money where your mouth is reveals your priorities. Allowing people to reveal their priorities is what helps ensure the efficient allocation of scarce resources.

Given that you value your limited time...and I'm guessing that you also value your limited money...it might be worth it to at least understand my argument regarding partial knowledge and opportunity costs.

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That's what makes pragmatarianism pretty darn awesome.  If somebody says..."I have better things to do with my time than debate pragmatarianism"...then they automatically prove your point regarding opportunity costs.

The guy who most frequently comments on my blog, Black Flag, likes to remind me that taxes are theft.  Are taxes theft?  Is that really the debate we need to be having?  Maybe it truly is?  But how long has that debate been around for?  Let's try a new debate!  Let's debate how public funds are efficiently allocated.

Sandra Fluke...for some reason...had the opportunity to tell congress what our priorities should be.

Because this is the message that not requiring coverage of contraception sends: a women's reproductive healthcare isn't a necessity...isn't a priority. - Sandra Fluke, Opening Statement

Is this how public funds are efficiently allocated?  One random lady gets to tell congress what our priorities should be?  That wouldn't be a very efficient allocation of public funds if congress decided to spend all of our taxes on women's reproductive healthcare.  So...let's say that Noah Smith also had the opportunity to tell congress what our priorities should be.  If you subscribe to Smith's blog then you could probably guess that he would tell congress that our priorities should be education, research, infrastructure, transportation, healthcare, the environment, national defense and so on and so on.  Perhaps it would save time for Smith to just tell congress what they should't spend our taxes on.

Do you get the sense that public funds would be more efficiently allocated each time somebody else testified in front of congress?

But before you line up for your turn to give congress a piece of your mind...let's consider how effectively Fluke and Smith communicated their priorities.  We know that Fluke cares enough about women's productive healthcare to take the time to testify in front of congress...but...she also argued that she shouldn't be forced to choose between education and healthcare.

Huh.  I guess Fluke didn't read my post on an economy based on wife swapping.  In that entry I argued that  taxpayers should be forced to decide whether they spend their taxes on public healthcare or public education.  Why force people to decide whether they spend their individual taxes on public healthcare or public education?  In other words...why force taxpayers to consider the opportunity costs of their tax allocation decisions?  Because that's exactly how resources are efficiently allocated.

Does anybody have any arguments against the efficient allocation of public funds?  That's the thing about pragmatarianism...it's really not much of a debate.  What's somebody going to say?  Are they going to say, "In these circumstances it's a good idea to flush your money down the toilet."?

That being said...just because I can't think of any good reasons why we would want to waste scarce resources doesn't mean that they do not exist.  Just because I don't believe in god doesn't mean that he doesn't exist.  The moral of the story is tolerance.  You spend your taxes on your priorities and I'll spend my taxes on my priorities.

Crooked Timber Liberals - Monopolizing the Facts

The Crooked Timber Liberals posted this new entry...Renouncing the facts in the name of method (Mankiw channels Lukacs).  Here was Chris Bertram's conclusion...

I’ve never had sympathy for what Lukacs says here, and don’t know the context for the Keynes quote. But I’m struck by the way that both Mankiw and Lukacs implicitly endorse the idea that they can just keep on keeping on, whatever happens in the actual world.

What happens in the "actual world"?  Are liberals the only ones who live in the "actual world"?  Here was my comment...

"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 August Hayek, The Use of Knowledge in Society

Are any of you guys ever going to respond to my challenge that taxpayers should be allowed to directly allocate their individual taxes? Or are you just going to keep on pretending that you have a monopoly on facts? Perhaps you enjoy arguing like blind men touching different parts of an elephant?

Why not genuinely consider what The Devil's Advocate of Public Goods has to say? Why not recognize, respect...or at least tolerate other people's values?

Unlike some of my other comments on the Crooked Timber blog...they didn't have moderation enabled so I managed to post the comment.  It didn't last long though.  When I revisited the entry here's what I saw in place of my comment...

[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]

I got shooed away.  Wasn't my comment relevant?  They were talking about "renouncing" facts so I shared Hayek's perspective on who owns the facts.  Then I offered a compromise and suggested political tolerance.

Sure, I'm self-aware enough to recognize that pragmatarianism could certainly qualify as an obsession.  And yes...I can't argue with the fact that I'm promoting my obsession.  But it's obviously not a private obsession...and aren't the Crooked Timber Liberals also promoting their own obsession?  

What was so harmful about my comment that they couldn't just allow other readers to form their own opinions on the relevance of my comment?  Aren't we all quite adept at that?  Do you really want other people to do that for you?  I sure know I don't.

Is it really that bad though to be obsessed with a reasonable compromise?  Pragmatarianism doesn't advocate getting rid of taxes or reducing the scope of government...but not once did the Crooked Timber liberals bother to address my compromise.  Yup...yet another ostrich response to pragmatarianism.

The Ostrich Response to Pragmatarianism?

[Update] Noah Smith responds...Noah Smith's Critique of Pragmatarianism.

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People respond to pragmatarianism in different ways.  On occasion people have responded very negatively...which was the topic of my previous entry.  Very rarely do people respond positively.   For the most part people choose not to respond at all.  For example, over at the Bleeding Heart Libertarians blog I've brought up pragmatarianism multiple times to the various contributors of the blog.  The first, and only, contributor to respond thus far has been Andrew Cohen on his recent post "States Must Do Bad".

Here's a "case study" of one economist that has refused to respond.  It should go without saying that people have the prerogative not to respond...just like it's my prerogative to analyze and consider the different possible explanations for their refusal to respond.

This is my reply to Barry, a reader who "responded" to my comment on noahpinion's economic blog...

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Barry, the topic of the thread is American stagnation. My comment addressed that topic.

A while back I brought up pragmatarianism to Noah...Neoclassical-Economics 2.  He didn't respond to my comment... but then a year later I noticed that he posted an entry on the value of government spending.  Clearly he either didn't understand my first comment...or he didn't agree with it. So I posted another comment to try and clarify my first comment.

As an economist he should, in theory, appreciate the value of efficiently allocating resources. He should also appreciate the negative unintended consequences of misallocated resources.

Maybe he knows something that I don't. Maybe he has a rational explanation for the divine disparity. Maybe he already knows the flaws of Hayek's concept of decentralized knowledge and the flaws of Bastiat's concept of opportunity cost.

If he does though...why hasn't he just shared what he knows already?  When a reader of his blog asked if public education was really a public good he had no problem creating a new entry to address the question.

His response to the reader's question again didn't indicate an understanding of pragmatarianism. The pragmatarian response would have been that each and every taxpayer values each and every public good differently. What might be a public good for one person might not be a public good for another person.  It would be absurd if we all had to purchase the exact same private goods just like it's absurd that we each have to purchase the exact same public goods.

Perhaps Noah just doesn't want to consider the possibility that he might be missing something. Personally, as I mentioned in my entry on political tolerance, when I was a libertarian it sure wasn't enjoyable to seriously and genuinely consider the flaws of my ideological foundation.

To quote Oliver Wendell Holmes, Jr..."to have doubted one's own first principles is the mark of a civilized man."

If reasonable men like Noah refuse to doubt their first principles...then perhaps we can understand why our civilization might be in trouble. I understand that he has his thesis to work on...but what a misallocation of time and effort if his thesis is based on a flawed understanding of basic economic theory.