Flowcilitation

"Flow Facilitation" - 8,210 results
"Flowcilitation" - 2 results
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If a concept is important then you really don't want to force people to wade through a swamp of irrelevant search results (ie tax choice vs pragmatarianism).  If you want somebody to find the needle, then don't put it in a haystack.  If the needle is already in a haystack, then endeavor to remove it by giving it a unique ID.

Is flowcilitation an important concept?  Yes, very yes.  Facilitating the flow of input improves the answer to the fundamental question... how should society's limited resources be used?

But not all input is equally valuable though.  I have to warn you that the following example might blow your mind.  On Reddit (a flowcilitator), in the econ subreddit, I saw this link that ellak12 shared...

The Huffington Post interview with the economist Ha-Joon Chang had received 897 upvotes and 219 downvotes.

Here's what I found when I read the interview...

So there is no economic theory that actually says that you shouldn’t have slavery or child labour because all these are political, ethical judgments. - Ha-Joon Chang

Was your mind blown?  It really should have been.

There were 897 people who freely gave their positive input to an economist who said that there's isn't an economic theory that defends people's freedom to give input.  Yeah...this is exactly why shallow input should never trump deep input.

Just because shallow input should never trump deep input doesn't mean that we should eliminate shallow input.  Shallow input is extremely useful.  In this case it highlights a huge problem: 80% of people who are interested in economics...and even some professional economists...don't know that there are very strong economic arguments against slavery.  This problem should really scare you because the moral arguments against slavery, by comparison, are extremely weak.  If we want to avoid slavery...then it would really behoove us to ensure that each and every member of each and every society knows the strongest arguments against slavery.

First, incentives matter.  Slaves lack the incentive to maximize their productivity...

Land occupied by such tenants is properly cultivated at the expence of the proprietor as much as that occupied by slaves. There is, however, one very essential difference between them. Such tenants, being freemen, are capable of acquiring property, and having a certain proportion of the produce of the land, they have a plain interest that the whole produce should be as great as possible, in order that their own proportion may be so. A slave, on the contrary, who can acquire nothing but his maintenance, consults his own ease by making the land produce as little as possible over and above that maintenance. - Adam Smith, Wealth of Nations

But if great improvements are seldom to be expected from great proprietors, they are least of all to be expected when they employ slaves for their workmen. The experience of all ages and nations, I believe, demonstrates that the work done by slaves, though it appears to cost only their maintenance, is in the end the dearest of any. A person who can acquire no property, can have no other interest but to eat as much, and to labour as little as possible. Whatever work he does beyond what is sufficient to purchase his own maintenance can be squeezed out of him by violence only, and not by any interest of his own. In ancient Italy, how much the cultivation of corn degenerated, how unprofitable it became to the master when it fell under the management of slaves, is remarked by both Pliny and Columella. In the time of Aristotle it had not been much better in ancient Greece. Speaking of the ideal republic described in the laws of Plato, to maintain five thousand idle men (the number of warriors supposed necessary for its defence) together with their women and servants, would require, he says, a territory of boundless extent and fertility, like the plains of Babylon. - Adam Smith, Wealth of Nations

...and it follows that they lack the incentive to innovate...

Slaves, however, are very seldom inventive; and all the most important improvements, either in machinery, or in the arrangement and distribution of work which facilitate and abridge labour, have been the discoveries of freemen. - Adam Smith, Wealth of Nations

More marionettes means less progress.

Second, input matters.  Slaves, by definition, are blocked from sharing their input on the question of how society's limited resources should be used.  The more input that's blocked, the less correct/valuable the answer will be.

Understanding the importance of incentives and input will help you understand why there's such a significant outcome disparity between command economies and market economies.

Here are a couple relevant comments on flowcilitation.  The first is one that I shared on Daniel M. Rothschild's article...How Uber and Airbnb Resurrect ‘Dead Capital’

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It's so much easier to comment on articles than it used to be. Just like it's so much easier to have articles published than it used to be. It's easier for input to flow. Flow is facilitated.

Command economies fail because input is blocked. Markets succeed because input is not blocked. But clearly, when it comes to facilitating flow, there's always room for improvement.

Crowdfunding isn't a recent phenomenon...but crowdfunding websites are. They make it extremely easy to share your deep input on commercial and civic endeavors. Therefore, they are flow facilitators.

What about creating a market in the public sector (pragmatarianism)? How much flow would be facilitated? It would be a flood of input. Yet, it only has 60 likes on facebook. Where's the bottleneck?

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Next comment was on this article...The Market: The Only Trustworthy Pollster by Donald Boudreaux...

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Excellent article! It's fundamentally important to help people understand this concept. But I'm thinking that it's only one half of the story...

First half: Votes don't accurately reveal what people actually want.
Second half: Voting for what you don't actually want can shift resources away from the things that you truly want. The genie might grant your wishes...but you'll be worse off if he does. The logical result of granting voters' wishes is that we end up with more of the things that we don't actually want and less of the things that we truly want.

If shallow input (voting) doesn't adversely impact the allocation of resources...then there's absolutely nothing wrong with it.

The first half of the story is essential...but the second half is far more compelling. It's the punch line. Unfortunately, perhaps it's not the easiest thing to illustrate.

We all voted for a Lexus and the result is a shortage of food? The resources required to provide everybody with a "free" Lexus had to come from somewhere. And it stands to reason that they were taken from the things that we value more than a fancy ride. So we're definitely worse off when our ballot votes (shallow input) are allowed to trump our dollar votes (deep input).

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Ballot voting, Reddit votes, Facebook likes and Youtube thumbs up/down are all examples of shallow flowcilitation.  These flowcilitators give us insight into people's opinions, feelings and sentiments.  This insight is extremely superficial.  It's the tip of the iceberg.  It's the cover of a book.  Dollar voting, on the other hand, is an example of deep flowcilitation.  It gives us insight into people's values.  This insight is extremely deep.  Therefore, when it comes to answering the fundamental question of how society's limited resources should be used...shallow input should never trump deep input.

The fact that people do not have the freedom to choose where their taxes go reflects the fact that the vast majority of people are not aware of the strong economic arguments against blocking input.

Shallow vs Deep Input

But when your leaders are chosen by popularity, whether through vote or product buying or social buzz, you then have a Cathedral that is of the bazaar. The great secret — this is what the Dark Enlightenment types are morally afraid to face — is not that our elites are bad, but that our elites are bad because they were chosen by our undifferentiated majority. The herd isn't brilliant; it's stupid. Worse than stupid, it's deceptive and dishonest. The bazaar is the enemy, not the cavalry come to save us! - Brett Stevens, The Redundancy of the Dark Enlightenment 

The other day I went to a bazaar. I saw a small rug that I really liked...

...so I asked the vendor whether he accepted votes.  For some strange reason he didn't.

Isn't that weird? The guy only accepted money. He wouldn't let me buy his rug with my words (opinion/sentiment/feeling).  I even tried offering him a thumbs up...both real life and youtube...but he said no deal.  Same thing with facebook likes. He did pause at a reddit upvote though.

See guy, your mistake is lumping markets and democracy together.

In a market...in order to get the rug, I have to sacrifice something that I personally own and value...like my money (blood/sweat/tears).  Spending is deep input.

With voting, on the other hand, I'm simply talking. Talk is cheap. Voting is shallow input.

Our system fails because shallow input trumps deep input.  Words are given more weight than actions.  It wouldn't be so bad if our political leaders were omniscient....but they really aren't.  This means that resources are diverted to less valuable uses.

NRxc (anorexic...no economics on their bones) people guess that the solution is to eliminate shallow input (voice).  No, the solution is to facilitate deep input on public goods. How? By creating a market in the public sector.  Giving people the freedom to exit within the public sector would clarify the demand for public goods.

Let me tweak Stephen Crane a bit...

Democracy, 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.

When you're ready to grow up, pragmatarianism has the meat you'll need.

Government: Larger, Smaller or Better?

So, I would think the solution would be smaller government, so the 1% have less they can control. A government that taxes less, spends less, and regulates less, offers fewer opportunities for cronyism. Alas, Stiglitz sees the solution as more government: higher taxes, more effective redistribution programs, and more effective regulation. - Randall Holcombe, Joseph Stiglitz: The Price of Inequality

shrinking government, which thus shrinks the power of politicians is the only way to stop cronyism. - Robert Wenzel, Bleeding Heart Libertarian: Koch, Soros and Adelson are Idiots for Spending Money Buying Politicians

If there were only two options on the table...

A. Larger government
B. Smaller government

...then I would certainly choose smaller government.  In other words, in the 2016 presidential elections...if I had to choose between voting for Elizabeth Warren or Rand Paul...then I'd certainly vote for Rand Paul.

On the one hand...everybody wants a free lunch...but on the other hand...consumer choice does have extremely beneficial consequences.  So whichever public goods Rand Paul kicked over to the private sector...I'd hope that the gain in quality/results/effectiveness would more than make up for any loss in volume.  A small volume of effective private welfare is certainly better than a huge volume of ineffective public welfare.
 
But it's so strange though when you think about it.  Rand Paul would kick certain public goods over to the private sector.  Why?  Because the invisible hand is better than the visible hand.  Except, it wouldn't be the invisible hand deciding which public goods were moved over to the private sector...it would be Rand Paul...the visible hand.  If we can trust Rand Paul to pick which public goods should be moved to the private sector...then that sort of defeats the purpose of moving public goods over to the private sector in the first place.

As far as I can tell...it would be far more logical to simply create a market in the public sector.  Doing so would allow the invisible hand to clarify the demand for public goods.  This means that the invisible hand would allocate resources in both sectors.  Therefore, pragmatarianism is economically consistent libertarianism.

Basically...my trust ranking looks something like this...

Elizabeth Warren < Rand Paul < Invisible Hand

Except, that really does not convey the intensity of trust.  I trust the invisible hand infinitely more than I would trust Rand Paul.

My question is...how long is it going to take before people acknowledge the existence of a third option?

A. Larger government
B. Smaller government
C. Better government

How many comments do I have to leave on other people's blogs before consumers are no longer forced between a rock and a hard place?

Perhaps one measure of effectiveness is to keep track of how many people make the argument that the government cannot or should not be run like a business.  So I'll conclude with a couple relevant passages...

If a government enterprise is funded through tax dollars, it does not face the same market test as a genuinely private business. The problem is all the more severe if the government grants an outright monopoly to the enterprise. The bureaucrats running it have little reason to cut costs or to please their "customers" if they receive a guaranteed level of funding regardless of their outcomes. In an extra twist of perversion, when a government agency botches its job, it often receives more funding. In this view, government officials waste money and offer shoddy output simply because they can. - Robert P. Murphy, Why Government Doesn't—and Can't—Manage Resources Like a Private Business

Government efficiency proponents make the mistake of viewing the cost of government in the same light as the cost of operating a private business. However, government cannot operate like a business because it isn’t a business.
[...]
Government is unconcerned with “profit.” The “cost” of government is equal to the taxes extracted from the private sector to pay for government activities, plus the economic damage caused by extracting resources from the private sector. Taxes are involuntarily obtained through compulsion and force. Regardless of the value a citizen assigns to the services provided by government, a citizen must pay for those services, and at a price set by government. The price one pays for government is primarily a function of political factors, which are only indirectly influenced by economic considerations. - Tad DeHaven, ‘Government Efficiency’

The Demand For Coercion

There are two roads that people can take to reach anarcho-capitalism.  People can take the economic road...or they can take the moral road.  The economic road is certainly the road less taken.

It's quite easy to identify whether somebody has taken the moral road.  When they invariably object to pragmatarianism...they use words like "rape", "theft", "coercion" and "violence".

Today I encountered this objection yet again.  It was the tipping point for me to create a blog entry for my reply.  Now I can simply link any future moral objectors to this post.

Well...ideally, if this post does its job, then I shouldn't have any reason to link to this post in the future.

There's always room for improvement though.  So I thought it might be interesting to track down a few of my replies over the past couple years.



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2016

No. This opacity is why we need to leave it to the free market. No central manager, not even one following the votes of a direct democracy, could ever replicate the compounded wisdom of hundreds of millions of people acting in their own interest with their own knowledge of what's best for them in their own circumstances. That's what the second Amendment is for. - erowe1, Are you confident in congress's competence?

It really sounds like you love and appreciate the market... which is a breath of fresh air.  But... I'm not sure if you truly do love and appreciate the market.

The question that we're all debating is whether taxation should be compulsory.

For nearly all of you the answer is a resounding "NO!!!!"

For congress the answer is a clear and definitive "Yes!"

For me, the only pragmatarian on this forum, the answer is "What's the market's answer?"

1. Should taxation be compulsory?

Anarcho-capitalists: No!!!!
Congress: Yes!
Market: ???

What's the market's answer?  We don't know.  Why don't we know?  Because we don't have a market in the public sector.  If we did have a market in the public sector then each and every taxpayer would be able to answer the question for themselves with their own taxes.  That's how a market works.  A market is the epitome of inclusive valuation.  This is why markets provide the most valuable answers.
For some reason you aren't very interested in knowing the market's answer.  It's as if you suspect that the market's answer will differ from your own.  Evidently you think that the market's answer will be "yes".... or even "YES"... or maybe even "YES YES YES YES!!!!!!"

Should I trust your answer or the market's answer?  Given that I love and trust the market.... I prefer to trust the market's answer.  This definitely does not mean that I'll agree with the market's answer.  It just means that it would be the epitome of hubris and conceit to try and bypass, skip or override the market's answer.  In other words... it's the epitome of hubris and conceit to choose for millions of other people.  Choosing for millions of other people is exactly what happens in a command economy.  I hate command economies.

If we create a market in the public sector and taxpayers overwhelming boycott the IRS and congress... then so be it.  The market has spoken.  But I'm open to the possibility that the market will say something else.  I'm a pragmatarian because I'm very interested in what the market has to say.

You seem to love and trust the market... but you don't seem very interested in creating a market in the public sector.  So I don't think that you genuinely love the market.  In other words, you're not a pragmatarian.

Engage in some soul searching.  Decide whether or not you truly love and trust the market.


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2014

What you're saying is that the victim could at least choose which person rapes them. No thanks, I'd rather not be raped in the first place. - Liberty_One, Government Success vs Market Success

What you're saying is that you don't want to boycott your rapist. If you don't want to boycott your rapist...then you must enjoy being raped.

Or maybe you think that the IRS is raping you for free? Naw, nobody's that stupid. Are they? Somebody would have to be a complete moron to fail to realize that congress pays the IRS to rape people.

Do you think that the amount of money that congress gives to the IRS accurately reflects the demand for coercion? If so, then you're a socialist. Because if you want to argue that the government supplies the optimal amount of coercion...then that means that you believe that it can supply the optimal amount of defense, milk, laptops and anything else.

Therefore, you're a socialist that enjoys being raped. Or maybe you're a libertarian that hasn't thought things through? Same thing.

In a pragmatarian system...it wouldn't be congress that determines how much money the IRS receives...it would be your neighbors. Do you think that your neighbors really want to pay the IRS to rape you? Do you think that the rape of "Liberty One" would be a high priority for them? If so, then what good would eliminating the government do? Getting rid of the government would be as useless as getting rid of guns. Guns don't kill people...people kill people.

Clearly you have no idea what Rothbard had to say about the subject...

A further point: in a profound sense, no social system, whether anarchist or statist, can work at all unless most people are "good" in the sense that they are not all hell-bent upon assaulting and robbing their neighbors. If everyone were so disposed, no amount of protection, whether state or private, could succeed in staving off chaos. - Murray Rothbard, Society without a State

Do you think that your neighbors are hell-bent on raping you? Do you think that there's a huge demand for coercion? If so, then getting rid of the government will simply create a huge vacuum. And markets, just like nature, abhor a vacuum.

Like I said before, pragmatarianism would clarify the demand for public goods. This would allow us to see the true demand for coercion. For all you know, you could simply be tilting at windmills.

First you look, then you leap. First you figure out which tree the cat is in, then you start barking.

The efficient allocation of resources depends on accurate information. Clarifying the demand for public goods would provide us with infinitely more accurate information than we currently have.


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2014

That's like saying you give money to your robber, or make love to your rapist. - LeeHyori, What Should The Government Do?

You're an anarcho-capitalist.  With the current system...the government is your enemy.  The government is the thief, rapist and murderer all rolled into one.  In a pragmatarian system...who would your enemy be?  Your enemy would be your neighbor.  If the IRS steals, rapes and murders you...then it would be because your neighbor paid them to do it.

So with the current system...you can shake your fist at the government...but in a pragmatarian system...you could have a talk with your neighbor.

The fact of the matter is...if your neighbor really wants to rape, murder and steal from you that much...then getting rid of the government would be about as effective as getting rid of guns.  Guns don't kill people...people kill people.  And people are pretty resourceful.

Sure, we don't need to implement pragmatarianism in order for you to talk to your neighbor.  But why waste your time talking to your neighbor if they have absolutely no interest in raping, murdering and stealing from you?

Here's the point that you really don't seem to appreciate: you have absolutely no idea what the demand is for coercion.  Well...unless you believe that the current supply of coercion perfectly matches the demand for coercion.  Is that what you believe?  If so, then you believe in socialism.  You believe that government planners can accurately divine exactly how badly your neighbors want to destroy you.


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2013

And pragmatarianism forces people to contribute to the tabs. Its just another form of coercion. - Sola_Fide, Nietzsche, Austrians and Creative Destruction

No no no. Pragmatarianism would reveal what the actual demand for coercion is. In other words, you have no idea how much of their taxes people would give to the IRS. If you did know the actual demand for coercion, then you would be omniscient and socialism would be a viable concept. But you are not omniscient, the preference revelation problem is a real problem, socialism is not a viable concept...we have no idea what the true demand for coercion really is.

But do you want to guess what the demand for coercion truly is? Is there a huge demand for coercion? If so, then so much for anarcho-capitalism. If not, then so much for your argument against pragmatarianism. If there's only a small demand for coercion, if only a few people give their taxes to the IRS, then the IRS could not be considered a legitimate public good. Why? Because enough of the people have to truly support (Willingness To Pay) a PUBLIC good in order for it to be considered a PUBLIC good.

So are you omniscient? Do you know what the actual demand for coercion really is? Or do you want to guess what the actual demand for coercion really is? Do you guess that there's a huge demand for coercion? Do you guess that it's the preference of most citizens to rob/eat their neighbors?

A further point: in a profound sense, no social system, whether anarchist or statist, can work at all unless most people are "good" in the sense that they are not all hell-bent upon assaulting and robbing their neighbors. If everyone were so disposed, no amount of protection, whether state or private, could succeed in staving off chaos. Furthermore, the more that people are disposed to be peaceful and not aggress against their neighbors, the more successfully any social system will work, and the fewer resources will need to be devoted to police protection. Murray Rothbard, Society without a State

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2012

Don't pay taxes for a year or two then and see how your quote-violence turns into non-quote-violence. - TheRobin, Can Economics Explain Human Sacrifice?

TheRobin, just like a liberal...you're not thinking things through.  If I stop paying taxes...the people who subject me to violence aren't going to do it for free.  They're going to do it because they are paid to do it.  Who pays them?  Obviously the government...but more specifically...government planners.  They are the ones who determine how much funding each government organization receives.

Everything we know about economics tells us that government planners cannot know the true values of millions and millions of people.  If they could...then all the socialist experiments would have been successful.  Given that they all failed miserably...we know that there's a disparity between how planners distribute public funds and how the market would distribute public funds.

What I'm advocating is that we allow taxpayers to choose which government organizations they give their taxes to.  This would create a market in the public sector.

So if you want to guess that the distribution of public funds would be exactly the same...if you want to guess that taxpayers would give the same amount of funds to the government organizations that engage in violent activity...then...you're indicating two things..

1. that you believe that socialism is a perfectly viable concept

2. that a stateless society would be just as violent as a state society

Modular Representation vs Monolithic Representation

Not only that, but elected politicians can honestly say that a large group of people chose them as a representative. The Kochs can't say that. - Noah Smith, How should Charles Koch use his power?

Wow.  The Kochs can't honestly say that a large group of people chose them as their representatives?  Seriously?  Is it really possible that Noah Smith, an economist, isn't familiar with the concept of dollar voting?  Or maybe he's familiar with the concept, but he thinks it's hogwash?

Personally, I think it's one of the most important economic concepts.  That's why I've written quite a few blog entries on the topic of representative economics...

• Public vs Private System of Representation
• Dollar Voting vs Ballot Voting
• Shopping is Communicating
• Congresspeople: Impersonal Shoppers
• Who Are Your True Representatives?

...but clearly some people still haven't gotten the memo.  There are certainly exceptions though...

Koch industries and its subsidiaries are expansive—their holdings include everything from gas stations to pipelines, paper products for everyday use, greeting cards, chemicals used to make materials, and the fabric that makes your clothing. 

With an interest in almost everything and status as the number two privately held company in the country–behind Cargill—Koch industries is a behemoth that is hard to avoid. 

But knowledge is power and your dollar is your vote. We can become informed purchasers and refuse to support their political agenda by refusing to purchase their wares. - Rachel Colyer, Sign the pledge: Don't buy these Koch products

Perhaps it might help Smith if we compared the Koch brothers to one of my "favorite" politicians...Elizabeth Warren.

In 2012...1,696,346 people in Massachusetts voted for Elizabeth Warren.  They wanted her to be their representative.  And that's exactly what occurred because Warren's opponent...Scott Brown...only received a measly 1,458,048 votes.

As you might have guessed...not everybody voted.  In 2012...the population size of Massachusetts was 6,645,303 people.  This means that 3,490,909 people didn't vote.  Some of them are were too young to vote (21%) which leaves us with 2,757,819 people who didn't think it was worth it to vote.

Let's break it down...

• 2,757,819 people didn't want either Elizabeth Warren or Scott Brown to be their representative
• 1,696,346 people wanted Elizabeth Warren to be their representative
• 1,458,048 people really didn't want Elizabeth Warren to be their representative
• 733,090 people were too young to have their voices count

In terms of dollar votes...Elizabeth Warren received $42 million of them.

Now let's take a look at the Kochs...

In 2012...how many people dollar voted for the Koch brothers?  I don't know.   But we do know how many dollar votes they received... $115 billion.  That's a lot of dollar votes.  It makes sense because they supply quite a few products that serve the interests of many people...

Koch Industry Gasoline: 

Chevron
Union
Union 76
Conoco

Koch Industry/Georgia-Pacific Products: 

Angel Soft toilet paper
Brawny paper towels
Dixie plates, bowls, napkins and cups
Mardi Gras napkins and towels
Quilted Northern toilet paper
Soft ‘n Gentle toilet paper
Sparkle napkins
Vanity fair napkins
Zee napkins

Georgia Pacific Building products: 

Dense Armor Drywall and Decking
ToughArmor Gypsum board
Georgia pacific Plytanium Plywood
Flexrock
Densglass sheathing
G/P Industrial plasters (some products used by a lot of crafters)-
Agricultural Plaster
Arts & Crafts Plaster
Dental Plaster
General Purpose Plaster
Glass-reinforced Gypsum (GRG),etc.

Koch Industry/Invista Products: 

COMFOREL® fiberfill
COOLMAX® fabric
CORDURA® fabric
DACRON® fiber
POLYSHIELD® resin
SOLARMAX® fabric
SOMERELLE® bedding products
STAINMASTER® carpet
SUPPLEX® fabric
TACTEL® fiber
TACTESSE® carpet fiber
TERATE® polyols
TERATHANE® polyether glycol
THERMOLITE® fabric
PHENREZ® resin
POLARGUARD® fiber and
LYCRA® fiber

Koch Fertilizer Company's AGROTAIN® nitrogen stabilizer fertilizer products are used around the world to improve nitrogen efficiency and enhance crop productions.

It turns out that I've dollar voted for the Koch brothers.  Therefore, they represent my interests...and the interests of millions and millions of other people.  How awesome would it be to know the actual number of people that dollar voted for the Kochs in 2012?

What's great about the private system of representation is that people don't have to dollar vote for the Koch brothers if they don't want to.  They can boycott them to their heart's content.  For example, Rachel Colyer can engage in ethical consumerism by putting her money where her heart is.  Clearly she doesn't want the Koch brothers to have her money...so she doesn't give it to them.  How absurd would it be if they could spend her money anyways?  Yet, that's exactly what Elizabeth Warren does.

Let's take a look at Massachusetts again.  Out of 6,645,303 people, 1,696,346 people wanted Elizabeth Warren to spend their money.  This leaves 4,948,957 who didn't want Warren to spend their money.  Yet, how many of these people dollar voted on a regular basis?  Nearly all of them.  The problem with our system is that it diverts a large portion of those dollar votes to Elizabeth Warren...despite the fact that most people didn't want her to have them.  How crazy is that?

If those 5 million people in Massachusetts wanted Warren to spend a good portion of their money...then why didn't they vote for her?  Why did they dollar vote for private representatives like the Koch brothers instead?

If the goal is for people's interests to be protected...then the private system of representation provides infinitely better coverage.  At any time, for any reason, you can replace any of your private representatives.  If you're not happy with how the Koch brothers are spending your money...then you can give your money to other representatives without having to convince millions of other people to make the same decision.  If you want to stop buying Brawny...then you stop buying Brawny.   If you want to stop buying every single product produced by the Kochs...then you have that option.

Our private system of representation is modular.  From the Wikipedia entry on modular programming...

This makes modular designed systems, if built correctly, far more reusable than a traditional monolithic design, since all (or many) of these modules may then be reused (without change) in other projects. This also facilitates the "breaking down" of projects into several smaller projects. Theoretically, a modularized software project will be more easily assembled by large teams, since no team members are creating the whole system, or even need to know about the system as a whole. They can focus just on the assigned smaller task (this, it is claimed, counters the key assumption of The Mythical Man Month—making it actually possible to add more developers to a late software project—without making it later still).

Modular representation facilitates marginal improvements.  Brawny can be replaced by Bounty...and paper towels can be replaced by alternative products.  Inferior components can be replaced with superior components.  A multitude of little improvements all add up to far greater progress than occurs with monolithic representation...

Since these policies are bundled together and voters cannot evaluate them individually, the election margin cannot reveal which of these interpretations is correct, nor can the election reveal the specific amount of resources voters want to devote to each of the three policy areas. Yet for political parties to allocate resources to satisfy social preferences, parties must determine which interpretation accurately describes voters’ preferences. For if a party were elected to power because voters wanted the party to alter foreign policy—but not any of the other policies—and the party did not realize this, the party could allocate resources in ways that did not reflect social preferences. - Samuel DeCanio, Democracy, the Market, and the Logic of Social Choice    

Who is more likely to allocate resources in ways that do not reflect social preferences...Warren or the Kochs?  Consider this bit from Warren's famous speech...

There is nobody in this country who got rich on his own. Nobody.  You built a factory out there—good for you! But I want to be clear.  You moved your goods to market on the roads the rest of us paid for.  You hired workers the rest of us paid to educate.  You were safe in your factory because of police forces and fire forces that the rest of us paid for.  You didn’t have to worry that maurauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. - Elizabeth Warren

Now consider this passage by Adam Smith...

When high roads, bridges, canals, &c. are in this manner made and supported by the commerce which is carried on by means of them, they can be made only where that commerce requires them, and consequently where it is proper to make them. Their expences too, their grandeur and magnificence, must be suited to what that commerce can afford to pay. They must be made consequently as it is proper to make them. A magnificent high road cannot be made through a desert country where there is little or no commerce, or merely because it happens to lead to the country villa of the intendant of the province, or to that of some great lord to whom the intendant finds it convenient to make his court. A great bridge cannot be thrown over a river at a place where nobody passes, or merely to embellish the view from the windows of a neighbouring palace: things which sometimes happen in countries where works of this kind are carried on by any other revenue than that which they themselves are capable of affording. - Adam Smith, Wealth of Nations

Who is more likely to spend our money on a bridge to nowhere...Warren or the Kochs?  Who is more likely to spend our money on supplying workers with the wrong education...Warren or the Kochs?  Who is more likely to spend our money on more police than is really necessary...Warren or the Kochs?

Who transports more goods...Warren or the Kochs?  Who employs more workers...Warren or the Kochs?  Who has more to lose from theft...Warren or the Kochs?

It stands to reason that the Kochs should be able to choose where their taxes go.  Compared to Warren... they have far more knowledge and incentive to try and ensure that the public sector supplies the balance of public goods that will maximize the number of dollar votes that consumers give to them.  If the Kochs get the balance of public inputs wrong...then it will be no different than if they get the balance of private inputs wrong.  Whether they misallocate their private dollars or their public dollars (taxes)...consumers will be able to easily replace the Kochs with better representatives.

In conclusion...here are some more passages on the topic...

What is the species of domestic industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can, in his local situation, judge much better than any statesman or lawgiver can do for him. The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. - Adam Smith, The Wealth of Nations

The man who employs either his labour or his stock in a greater variety of ways than his situation renders necessary can never hurt his neighbour by underselling him. He may hurt himself, and he generally does so. Jack of all trades will never be rich, says the proverb. But the law ought always to trust people with the care of their own interest, as in their local situations they must generally be able to judge better of it than the legislator can do. - Adam Smith, Wealth of Nations

It is thus that every system which endeavours, either by extraordinary encouragements to draw towards a particular species of industry a greater share of the capital of the society than what would naturally go to it, or, by extraordinary restraints, force from a particular species of industry some share of the capital which would otherwise be employed in it, is in reality subversive of the great purpose which it means to promote. It retards, instead of accelerating, the progress of the society towards real wealth and greatness; and diminishes, instead of increasing, the real value of the annual produce of its land and labour. - Adam Smith Wealth of Nations

All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society. - Adam Smith, Wealth of Nations

Value Signals

Just as I was about to publish this...I noticed Noah Smith's most recent blog entry...How should Charles Koch use his power?  It's a bit of synchronicity that we're both kinda answering the same question.  So I stuck a link to his entry here so you can compare our answers.

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The other day when I searched Google images for value signals...I didn't find any images that were even vaguely similar to the images that I had in mind.  So even though the photoshopped image above is pretty crappy...it's the best one of its kind.  Well...that I know of.  It's entirely possible that searching for other terms would yield similarly "instructive" images.  If you know of any...please share them.

What's a value signal?  A value signal is anything which indicates where there's value to be found.  If it helps highlight/reveal/locate value...then it's a value signal.  Prices, profits and wages are all value signals.   So is a treasure map.

Value signals are important because they help ensure that society's limited resources are put to their most valuable uses.  If value signals are distorted...then society, as a whole, will invariably be worse off.  This is because resources will flow in less valuable directions.  When resources flow in less valuable directions...the result is far less abundance of the things that we value most.

Using the image above...let's imagine that the true value signals are as follows...

$ = rescuing a cat from a tree
$$ = stopping a bank robber
$$$ = preventing Gotham's imminent destruction

Clearly society, as a whole, would be harmed if the Joker distorted the value signals...

$$$ = rescuing a cat from a tree
$$ = stopping a bank robber
$ = preventing Gotham's imminent destruction

Batman would respond to the wrong value signal.  As a result, his valuable skills would be wasted on saving a cat rather than saving Gotham.

Perhaps this might seem pretty obvious...but if it truly was...then I wouldn't have to write about it.

So how can we try and make the sanctity of value signals more obvious to more people?  Here are some of the things that crossed my mind.  In no particular order...

Bat signal - As you can see...the bat signal (Google images) was the option that I went with.  From Wikipedia...

The Bat-Signal is a distress signal device appearing in the various interpretations of the Batman mythos. It is a specially modified Klieg searchlight with a stylized symbol of a bat attached to the light so that it projects a large Bat emblem on the sky or buildings of Gotham City. In the stories, the signal is used by the Gotham City Police Department as a method of contacting and summoning Batman to their assistance in the event of a serious crisis and as a weapon of psychological intimidation to the numerous villains of Gotham City.

Flare - A flare is another type of distress signal.  We can imagine some people lost at sea during a stormy night.  They shoot a red flare to help rescuers find them.

Three kings (wise men) - The Bible story how three kings from the East followed an exceptionally bright star to find baby Jesus.  The Google images are quite relevant to the concept of a value signal.   From Matthew 2...

9 When they had heard the king, they departed; and, lo, the star, which they saw in the east, went before them, till it came and stood over where the young child was.
10 When they saw the star, they rejoiced with exceeding great joy.
11 And when they were come into the house, they saw the young child with Mary his mother, and fell down, and worshipped him: and when they had opened their treasures, they presented unto him gifts; gold, and frankincense and myrrh.

Treasure map - Helps people find where the treasure/value is.  Entrepreneurs are treasure hunters.  As a society, we benefit when they find things that we value.  A fake treasure map is a fake value signal.  As a society we really don't benefit when entrepreneurs...

1. go on wild goose chases
2. bark up the wrong trees
3. tilt at windmills
4. leap without looking (at the correct information)

Gold rush - Prospectors hurry to the same general location because they all saw the same value signal.  The brighter the signal...the larger the rush.  People need incentives to be at the right (most valuable) place at the right (most valuable) time.

Easter Eggs - Kids make the effort to find Easter Eggs because they perceive it's worth it to do so.

Painting the target - Military term for when a laser guidance system is used to help direct a missile to its target.  Markets allow the crowd to use their dollar votes to guide resources to their most valuable uses.  As a result, consumers get the most bang for their buck.

Sirens / flashing lights - They help communicate priority...and right of way.  A path is cleared for more valuable uses of society's resources.  Flow is facilitated.

Traffic signals - A green light signals for resources to flow in a certain direction.

Can anybody think of any others?

It's imperative that we figure out how to help the crowd easily understand the harm caused by distorting value signals.  As it stands there's plenty of popular support for higher minimum wages and stronger unions.  Just like there's popular support for putting a ceiling on how much CEOs can earn.  In the past there's been popular support for lowering the cost of rent...and lowering the price of gasoline.

Consumers, as utility maximizers, clearly want to pay less money for things that they value...but they don't grasp that distorting value signals will divert resources to less valuable uses.  The logical result?  Far less abundance of the things that we value most.

If the price of gas is artificially lowered...then this prevents entrepreneurs from accurately gauging the demand for energy.  If entrepreneurs don't know exactly how much society values energy...then they can't make informed decisions as to whether they should risk making the effort to find/improve alternative forms of energy.  So in the not-so-long run...distorting the value signal will result in an inadequate and inferior supply of homogeneous energy.  The people who argued for lower gas prices are the same people who then argue that the government should subsidize alternative forms of energy.  

Raising minimum wages might seem beneficial...but the future harm is far greater than the momentary benefit.  If the minimum wage is raised...then this is a green light for unskilled labor.  More kids are incentivized to drop out of school and more people are incentivized to immigrate to the US.  This results in a surplus of unskilled labor.  Higher rates of unemployment results in more poverty.  The people who shouted for higher minimum wages are the same people who then shout that there's a greater need for government welfare.

This isn't anything new.  Bastiat wrote about it...

There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen. 

Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil. - Frederic Bastiat, Seen vs Unseen

Adam Smith wrote about it as well.  Smith provided a very detailed description of the logical and harmful consequences of distorting value signals...

When the government, in order to remedy the inconveniences of a dearth, orders all the dealers to sell their corn at what it supposes a reasonable price, it either hinders them from bringing it to market, which may sometimes produce a famine even in the beginning of the season; or if they bring it thither, it enables the people, and thereby encourages them to consume it so fast as must necessarily produce a famine before the end of the season. The unlimited, unrestrained freedom of the corn trade, as it is the only effectual preventative of the miseries of a famine, so it is the best palliative of the inconveniences of a dearth; for the inconveniences of a real scarcity cannot be remedied, they can only be palliated. No trade deserves more the full protection of the law, and no trade requires it so much, because no trade is so much exposed to popular odium. 

In years of scarcity the inferior ranks of people impute their distress to the avarice of the corn merchant, who becomes the object of their hatred and indignation. Instead of making profit upon such occasions, therefore, he is often in danger of being utterly ruined, and of having his magazines plundered and destroyed by their violence. It is in years of scarcity, however, when prices are high, that the corn merchant expects to make his principal profit. He is generally in contract with some farmers to furnish him for a certain number of years with a certain quantity of corn at a certain price. This contract price is settled according to what is supposed to be the moderate and reasonable, that is, the ordinary or average price, which before the late years of scarcity was commonly about eight-and-twenty shillings for the quarter of wheat, and for that of other grain in proportion. In years of scarcity, therefore, the corn merchant buys a great part of his corn for the ordinary price, and sells it for a much higher. That this extraordinary profit, however, is no more than sufficient to put his trade upon a fair level with other trades, and to compensate the many losses which he sustains upon other occasions, both from the perishable nature of the commodity itself, and from the frequent and unforeseen fluctuations of its price, seems evident enough, from this single circumstance, that great fortunes are as seldom made in this as in any other trade. The popular odium, however, which attends it in years of scarcity, the only years in which it can be very profitable, renders people of character and fortune averse to enter into it. It is abandoned to an inferior set of dealers; and millers, bakers, mealmen, and meal factors, together with a number of wretched hucksters, are almost the only middle people that, in the home market, come between the grower and the consumer.   

The ancient policy of Europe, instead of discountenancing this popular odium against a trade so beneficial to the public, seems, on the contrary, to have authorized and encouraged it. - Adam Smith, Wealth of Nations

What I shared was just a small portion of Adam Smith's painstaking efforts to help people understand the importance of value signals.  Yet, more than 200 years later...it's painfully obvious that the "inferior ranks of people" still do not understand the sanctity/significance of "extraordinary profits".

Is the problem that people haven't read Adam Smith?  Or is the problem that they have read him but haven't understood him?  If the problem is the latter...then sharing relevant passages by Adam Smith will match Einstein's definition of insanity...doing the same thing over again but expecting a different outcome.

What am I doing differently?  I shared an illustration!  Look at the illustration and then read Adam Smith and then look at the illustration.  And then?  Read Adam Smith again.  And now?  Read Oskar Lange...

The system of free competition is a rather peculiar one. Its mechanism is one of fooling entrepreneurs. It requires the pursuit of maximum profit in order to function, but it destroys profits when they are actually pursued by a larger number of people. - Oskar Lange, On the Economic Theory of Socialism: Part Two

Read Smith again...

It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. - Adam Smith, Wealth of Nations

Look at the illustration again...

Read Lange again...

The system of free competition is a rather peculiar one. Its mechanism is one of fooling entrepreneurs. It requires the pursuit of maximum profit in order to function, but it destroys profits when they are actually pursued by a larger number of people. - Oskar Lange, On the Economic Theory of Socialism: Part Two

Read Smith again...

The increase of demand, besides, though in the beginning it may sometimes raise the price of goods, never fails to lower it in the run. It encourages production, and thereby increases the competition of the producers, who, in order to undersell one another, have recourse to new divisions of labour and new improvements of art which might never otherwise have been thought of. The miserable effects of which the company complained were the cheapness of consumption and the encouragement given to production, precisely the two effects which it is the great business of political œconomy to promote. - Adam Smith, Wealth of Nations

Look at the illustration again...

Read Lange again...

The system of free competition is a rather peculiar one. Its mechanism is one of fooling entrepreneurs. It requires the pursuit of maximum profit in order to function, but it destroys profits when they are actually pursued by a larger number of people. - Oskar Lange, On the Economic Theory of Socialism: Part Two

Read Smith again...

The establishment of any new manufacture, of any new branch of commerce, or of any new practice in agriculture, is always a speculation, from which the projector promises himself extraordinary profits. These profits sometimes are very great, and sometimes, more frequently, perhaps, they are quite otherwise; but in general they bear no regular proportion to those of other old trades in the neighbourhood. If the project succeeds, they are commonly at first very high. When the trade or practice becomes thoroughly established and well known, the competition reduces them to the level of other trades. - Adam Smith, Wealth of Nations

Look at the illustration again...

Read Lange again...

The system of free competition is a rather peculiar one. Its mechanism is one of fooling entrepreneurs. It requires the pursuit of maximum profit in order to function, but it destroys profits when they are actually pursued by a larger number of people. - Oskar Lange, On the Economic Theory of Socialism: Part Two 

Read Smith again...

When by an increase in the effectual demand, the market price of some particular commodity happens to rise a good deal above the natural price, those who employ their stocks in supplying that market are generally careful to conceal this change. If it was commonly known, their great profit would tempt so many new rivals to employ their stocks in the same way, that, the effectual demand being fully supplied, the market price would soon be reduced to the natural price, and perhaps for some time even below it. If the market is at a great distance from the residence of those who supply it, they may sometimes be able to keep the secret for several years together, and may so long enjoy their extraordinary profits without any new rivals. Secrets of this kind, however, it must be acknowledged, can seldom be long kept; and the extraordinary profit can last very little longer than they are kept. - Adam Smith, Wealth of Nations

Look at the illustration again...

Read Lange again...

The system of free competition is a rather peculiar one. Its mechanism is one of fooling entrepreneurs. It requires the pursuit of maximum profit in order to function, but it destroys profits when they are actually pursued by a larger number of people. - Oskar Lange, On the Economic Theory of Socialism: Part Two 

Did you cheat?  Did you just skim and glance rather than carefully read and seriously look?   If so, then try again.

We really don't fool batman, superman and wonder woman (political correctness...sigh) by honestly signaling what our true values are.  And we certainly stand to benefit when they endeavor to save Gotham rather than rescue a cat from a tree.

On the flip side...we really don't want batman, superman and wonder woman forming a cartel.  If there's one thing that Adam Smith wrote more about than the importance of value signals...it's that producers are only too happy to use the government to limit competition.  The solution is to clarify the demand for public goods.

But producers really aren't the only ones who want a free lunch.  This means that democracy fails for the same reason that taxation must be compulsory.  In case you missed it, the solution is to clarify the demand for public goods.

Can David Brin Cite Hayek And Smith?

Comment on: A Brincipiled take on things

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This was the first search result for "neoreaction "adam smith"". Turns out that if it wasn't for Brin...this post wouldn't have been a result.

I'm going to try and help both of you out...

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

The problem isn't with the masses being stupid sheep. Nope. It has to do with the fact that they all want a free lunch. They are only too happy to try and externalize the costs of their benefits. As a result of this very faulty input, resources are redirected from more valuable uses to less valuable uses.

Neoreactionaries correctly discern that there is a problem with democracy...but they lack the economics to correctly diagnose the problem. As a result, they end up barking up the really wrong tree. Brin should have, but didn't, point this out. Why didn't he?

The solution is simple...we create a market in the public sector. If Brin doesn't support this solution...can he still cite Hayek and Smith?

I have just summarized Hayek and Smith correctly. And dig this… neo reactionaries want to set up systems that will reduce the net number of deliberators, decision makers and allocators FAR below the requisite smart mob that Smith and Hayek recommend. Do not cite Smith or Hayek, you insult them.

Nope, if Brin doesn't support tax choice (many more "allocators and deciders")...then he can't cite Smith or Hayek either. Personally, I can cite both for days...

It is thus that the private interests and passions of individuals naturally dispose them to turn their stocks towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society among all the different employments carried on in it as nearly as possible in the proportion which is most agreeable to the interest of the whole society. - Adam Smith, Wealth of Nations

If government planners can't discern the "natural proportion" of milk, then clearly they can't discern the "natural proportion" of defense. By definition, you can't discern one without the other. If Smith could have stood on his own shoulders...then he certainly would have figured it out. Hayek missed it because Mises missed it. Rothbard caught it...but then his solution was to destroy the entire public sector. Errr...yeah. He missed the part where taxation and individual taxation are not mutually exclusive.

So...I'm just kidding about revoking Brin's citation rights. We need more, not less, people citing Smith and Hayek.

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In case anybody is curious...the reason I searched for "neoreaction "adam smith"" was because I was curious whether any neoreactionaries had shared this passage from Smith...

Even a bad sovereign feels more compassion for his people than can ever be expected from the farmers of his revenue. He knows that the permanent grandeur of his family depends upon the prosperity of his people, and he will never knowingly ruin that prosperity for the sake of any momentary interest of his own. - Adam Smith, Wealth of Nations

If any neoreactionary wants to cite Adam Smith in defense of monarchism...then I suppose that would be a pretty decent passage to use.  But if any neoreactionary wants to defend monarchism...then...errrr...perhaps they should do a "bit" more reading.