Open Borders Day - Run or Repair?

Today is Open Borders Day.

Even though I fully support open borders...Bryan Caplan has dedicated far more blog posts to the subject than I have.  This is because I'm fairly confident that tax voting (pragmatarianism) is a far more pressing concern than foot voting.

Maybe this might help shed some light on our priority disparity...

When you vote, the chance that you tip the outcome is near 0%, so you might as well just scream about your identity.  When you move, in contrast, the chance that you tip the outcome is near 100%, so you'd better consider cost and convenience. - Bryan Caplan, Expressive Voting, Emigration, and Alsace-Lorraine

Perhaps Caplan perceives that people really only have two options...

A. Ballot voting
B. Foot voting

Ballot voting won't change the outcome...but foot voting definitely will.  Well...for yourself.

If a house is burning...then certainly people should be free to flee.  But running away doesn't put the fire out. Running away doesn't make the space habitable again.  Running away doesn't help prevent future fires. The freedom to run away is absolutely essential...but it does absolutely nothing to solve the problem(s) that people are running from.

Personally, I think that people should have a third option...

C. Tax voting

If you perceive that immigrants pose a problem to the US...then you could...

A. Ballot vote for closed borders
B. Foot vote for a country with closed borders
C. Tax vote for the construction of a great wall

But the fact of the matter is...if we allowed taxpayers to choose where their taxes go...then proponents of closed borders wouldn't be able to complain about immigrants using public services that they weren't paying for.  This is because if a proponent of closed borders didn't want to spend their taxes on welfare...then rather than exit from the US...they could simply exit from welfare by spending their own tax dollars on other public goods.

Overall, government action seems likely to reduce the robustness of institutions and to exacerbate collective-good problems because removing the ‘exit’ option prevents individuals from judging how their personal contributions affect outcomes.  When taxpayers who fund failing programmes cannot exit with their own money, then the only form of accountability left is that of democratic voice.  Yet, given the minuscule chance of affecting the result of a large-number election it is rational for voters to remain ignorant about the relative effectiveness of specific programmes.  It is precisely this ignorance that may allow opportunistic behaviour to go unchecked. - Mark Pennington, Robust Political Economy

There are numerous failing government programs that we are forced to fund.  They are failing because, unlike in the private sector, consumers aren't free to use their own money to define "success".

In order to try and help drive the point home that foot voting is a very distant second best option...imagine if we applied our current system to the private sector.  Let's say that you perceive that Britney Spears is a problem.  Your only options would be...

A. Ballot vote against her
B. Foot vote for another country

How defective would our private sector be if dollar voting wasn't an option?   It would be just as defective as our public sector.  Not just our public sector...but every country's public sector.

How much do you value not being forced to purchase a Britney Spears CD?  How much would you value not being forced to fund an atrocious government program?

Am I missing something?  Why does Bryan Caplan believe that opening borders between countries is more important than opening borders within countries?  Isn't it a far more pressing concern that taxpayers aren't free to shop in the public sector?  Aren't command economies the primary reason why people flee in the first place?

Basically, why is Caplan attacking the symptom rather than the disease?

Congresspeople: Impersonal Shoppers

There are 28 mostly irrelevant search results for "Impersonal Shoppers"

Discussion on tax choice facebook page

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Xero

All of us would agree that it would be an improvement if taxpayers could allocate even just 1% of their taxes. And maybe all of us would agree that 10% would be an improvement. What about 50%?

Where should the line be drawn? Why should it be drawn there?

If we ever set up a tax choice non-profit...would we ever turn away a donation because it was too big? "No, you don't really value the cause that much!"

I've tried to flesh out the relevant concepts in terms of block (limiting input) vs flow (facilitating input)...

Block vs Flow

Cait Lamberton 

In my studies, the psychological benefits actually dissipate at high levels (50%) because skepticism is generated. Not saying that shouldn't happen from a policy standpoint, but it'd be a tough sell practically and may have some weird negative consequences...

Xero

Very interesting.  I'm guessing they're skeptical of the accuracy of their allocation decisions?  If the allocation level was 100%...does this mean that taxpayers would allocate 10% of their taxes and then just give the rest to their personal shoppers (congress)?  "You go ahead and order the main course for me...I'll just order my drink...and maybe dessert".  I think if there was any real value created by the employment of infinitely removed personal shoppers...then there would be plenty of companies in the private sector capitalizing on the demand. LOL...I said "infinitely removed personal shoppers".  I should have just said "impersonal shoppers".

This ties into the work by Joel Waldfogel...

Consumers fare better [at identifying their own preferences] than all types of givers except significant others and possibly grandparents...it seems unlikely that an alternative chooser would do better than friends, siblings, and parents, all of whom have substantial amounts of information about the ultimate consumer's preferences. - Does Consumer Irrationality Trump Consumer Sovereignty?  

We say "representative democracy"...but I think it's more accurate to say "representative economics"...or maybe "proxy economics".  It's pretty much just a command economy.

Block vs Flow

Discussion (context) on:  3 Things That Make Libertarian Heads Explode by Lynn Stuart Parramore

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Xero

Which is better?

A. moving public goods over to the private sector
B. creating a market in the public sector (pragmatarianism)

ajaxthegreat

I'd go with the second one if I had to choose, hands down. But I'm not quite sure just how pragmatic that would be in reality. And this is coming from a strong supporter of direct democracy.

Xero

How pragmatic is it for you to choose which articles you allocate your time to?

Here we are, typing and typing away. What we type gets stored in a disqus database/server. More comments require more servers. More servers require more space.

Your comments help determine how space in Timbuktu is used.

1. You derive value from discussing this topic
2. You sacrifice the less valuable uses of your time
3. Space is allocated accordingly

Basically, your input influences the output. If your input is somehow blocked...then the output will not reflect it. The supply will shift away from your preferences (demand). Shifting away from demand is the destruction of value. Shifting towards demand is the creation of value.

So it's block vs flow.

If you're an American environmentalist...and Brazil is going to vote on whether to conserve or develop its rainforest...should your vote flow accordingly...or should it be blocked? What if the Brazilian EPA (BEPA) is doing an excellent job protecting the rainforest...should your tax dollars flow accordingly...or should they be blocked?

If any taxpayer in any country could freely flow their input (tax dollars) to the BEPA...how much influence would the BEPA have over how space was used in Brazil? Can you imagine BEPA having too much influence? What would that look like? They'd buy all the commercial property and restore it to its natural state? What's wrong with that? They wouldn't be taking the property...they would be buying it. If the owner of some property sold it then we have to surmise that it was a mutually beneficial exchange. What's really important to really appreciate is that it's a mutually beneficial exchange that wouldn't have occurred if the input of taxpayers had been blocked by arbitrary borders.

Of course it's a given that sometimes people will enter the "wrong" input. But if you perceive that somebody is entering the wrong input...then it must be the case that you have some information that influences your perception. If you have pertinent information...then the responsibility is on you to share it. Because people can't be responsible for sharing information that they don't have.

Right now, here I am sharing my information with you. Persuasion is a priceless process.

Are there times when blocking is appropriate? Sure, killing people is block worthy. Why? Because killing people is the ultimate block. No input can flow from dead people. Just like no input can flow from marionettes. But every appropriate block has an optimal allocation. It clearly wouldn't be an optimal allocation for every individual in this world to have as much protection as the American president. So determining the optimal block requires free flow. People's input (tax dollars) should be able to freely flow to any police departments.

The manufacturers first supply the neighbourhood, and afterwards, as their work improves and refines, more distant markets. - Adam Smith, Wealth of Nations

When the buyer goes to the market, he wants to find it abundantly supplied. He wants the seasons to be propitious for all the crops; more and more wonderful inventions to bring a greater number of products and satisfactions within his reach; time and labor to be saved; distances to be wiped out; - Frédéric Bastiat

What would Bastiat say about today's distances? Yet, we still groan at the thought of "long" plane rides. Clearly we still have plenty of distance wiping to do.

But it's really not distance that prevents me from giving my taxes to the Brazilian EPA...it's you...ajaxthegreat! Oh wait, it's not you...it's me...Xero! I'm the one with the information... which is why I'm sharing it with you. Does my work need to be refined and improved? Of course...there's always room for improvement.

Where in the world are public goods being improved? Only in the US? The US has a monopoly on improvements? That makes as much sense as believing that elected representatives have a monopoly on identifying improvements. There's nothing pragmatic about nonsense.

The Value Of Internalizing Costs

There is exactly one search result for "The Value Of Internalizing Costs"

Reply to reply on: Wars on Everything

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Hah, thanks. That truly would be an awesome superpower! It's kind of easy to have a general picture of a world where incentives aren't perverse. We just work backwards...

Right now we have the invisible hand in the private sector. If we replaced it with the visible hand...what would happen to private goods?

1. Variety? Plummet
2. Quality? Plummet
3. Cost? Skyrocket

In the public sector we have the visible hand. If we replaced it with the invisible hand...what would happen to public goods?

1. Variety? Skyrocket
2. Quality? Skyrocket
3. Cost? Plummet

If we want people to internalize costs...then we have to help them understand that they will be better off if they do so. We have to show them that "lunches" only increase in value when consumers can clearly see the (opportunity) costs and choose accordingly.

One image that comes to mind is a long line of people waiting to go inside a restaurant to get a "free" lunch. The people walking out of the restaurant are smiling and oblivious to the fact that they are wearing only their underwear. Chances are good that they wouldn't have thought the deal was so great if they could clearly see what it would cost them.

The fact of the matter is...deals are never great when costs are externalized. If people can't shop around for the best deals...then there's absolutely no incentive for producers to offer better deals.

Another image has two candy stores. One candy store says "Internalized Costs" and the other says "Externalized Costs". There's a kid in each candy store. Which kid is happier? The kid in the EC store walks out with one "free" candy corn. The kid in the IC store paid $.25 and walks out with a huge bag of candies.

Lots of superpowers are nearly impossible to develop. I really hope that showing people the value of internalizing costs isn't one of them.

Ensuring The Relevance/Efficiency Of Government Action

Comment on: The Paradox of Modern Individualism by Mark S. Weiner

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The government isn't so bad...as long as it's efficiently supplying the tools that individuals need to successfully complete their missions? Yes, this is true. Maybe I skimmed too fast though...but did you mention anything about the mechanism by which we ensure the relevance/efficiency of government action?

Government: Here's some war on drugs
Bob: *reviews his recipe* Nope, my recipe doesn't call for any of that ingredient
Sam: *reviews his recipe* Neither does mine
Sally: *reviews her recipe* Same here

If taxpayers' money is not being spent on the efficient production of the ingredients that they need most...then the state is simply obamerating society. How do we ensure that the state does not become a massive obamertine? That's the fundamentally important question which it really doesn't seem like you even attempted to answer.

My answer is to create a market in the public sector. This would solve the preference revelation problem.

Do you have a better answer? Or is the question not really that important?

Opinions (Shouting) vs Values (Spending)

Comment on: Wars on Everything by Anthony Gregory

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It's probably not intentional but, unfortunately, you give the impression that shouts accurately convey demand. People will shout for all types of things...they'll shout for more regulations...they'll shout for more assistance for the poor...they'll shout for walls to be built to keep immigrants out...they'll shout for free lunches. It doesn't cost anything for people to shout or shake their fists...so how can these things accurately convey demand?

The efficient allocation of resources doesn't depend on opinions...it depends on values. Cheap talk surveys...and polls...and voting...communicate people's opinions...not their values. In order to accurately determine what people truly value, they have to be free to put their own money where their mouths are. Therefore, spending, not shouting, accurately conveys demand.

Creating a market in the public sector would solve the preference revelation problem. Clarifying the demand for public goods would show us that the vast majority of people, when confronted with the alternative uses of their own tax dollars, would decide that war wouldn't be worth the cost.

Replacing The Visible Hand With The Invisible Hand

There are six search results for "Replacing The Visible Hand With The Invisible Hand".  All the results are mine.

Reply to GovtIsASuperstition: What Should The Government Do?

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In a pragmatarian system, taxpayers will be able to choose which government organizations they give their taxes to.  Congress is a government organization, therefore...taxpayers will be able to choose how much money they give to it.  If you're not happy with the tax rate that congress has chosen...how many tax dollars are you going to give to them?  A lot?  Some?  None?

If you want to make govt like a business, then you should probably stop insisting that consumers be forced to pay the business. - GovtIsASuperstition

Nobody would force you to pay congress.  If you're critiquing a system that would force you to give any amount of your tax dollars to congress...then you're really not critiquing pragmatarianism.

Right now you're saying, "oh no, poor taxpayers, they really hate shopping in the public store...they detest being ripped off..." but you're entirely missing the part where taxpayers are the ones who decide exactly how much money congress, the government organization in charge of the tax rate, receives.

If you want to effectively critique pragmatarianism, then you can't ignore this detail...because it's really not just a minor detail.  So please incorporate this fact into your analysis.  And if I'm failing to adequately explain this fact to you...then please tell me.

This blog entry of mine...preference revelation problem...provides a relatively concise overview of the problem/solution.

As you can tell from that overview...another fact that you've neglected entirely is one of our opponents' strongest arguments for government.  If you scroll down a bit...haqshenas does a pretty decent job of sharing the argument.  Please read it.  It's the free-rider problem.  This argument is applicable to libertarianism and anarcho-capitalism...but it's not applicable to pragmatarianism.

Right now you're attacking government...but you're not going to make much progress because you're not listening to the people who are defending it.  If you actually want people to have more freedom...then please do us all a favor and familiarize yourself with the very best economic defense of government.  And by "best" I mean most widely cited.  Please carefully read...Incentivizing Honest Preference Revelation for Public Goods.

Another deficiency in your analysis is that clearly you haven't thoroughly read, or understood Israel Kirzner.  Which one is it?

In buying the resources needed to produce any one good, an entrepreneur has succeeded in competing away these resources from other possible uses.  When a producer, not enjoying protection against competitive entry, finds himself as sole producer he still has to worry about the activities of competing entrepreneurs. They are channeling their energies and their alertness into producing other products, which are competing for consumers' attention also.  Inter-product competition will not guarantee horizontal demand curves facing each producer. But it offers assurance that errors made in the identification of the most urgently needed consumer products (and/or of the most easily accessible resources) will tend rapidly to be noticed and exploited by alert, competing entrepreneurs. - Israel M. Kirzner, How Markets Work

You asked me about David Friedman...not sure if you noticed but my blog links to his.  As awesome as he is...pragmatarianism is far superior to his anarcho-capitalism.  Just like Rothbard, who wasn't quite as awesome, Friedman doesn't recognize that taxation and individual valuation are not mutually exclusive.  Unlike with Rothbard though...you can ask Friedman to explain why he prefers anarcho-capitalism over pragmatarianism.  I've asked him directly and indirectly numerous times and this is all I've got in return...

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

What are the fundamental problems of government?  There's only one...the visible hand.  That's the only problem with government.  Pragmatarianism would replace the visible hand with the invisible hand.

Except, here you are telling me that you're really not that enthusiastic about the consequences of replacing the visible hand with the invisible hand.  You're like "meh".  That's what you're like.  Why?

Right now we have the invisible hand in the private sector.  What if we replaced it with the visible hand?  Would the consequences be insignificant?  Maybe you'd also be like "meh"?

Perhaps you need me to help you understand what the consequences would be...

Private goods...

1. Variety?  Plummet
2. Quality?  Plummet
3. Cost?  Skyrocket

"meh" "meh" "meh"?

Maybe, from your perspective, those consequences aren't very significant?  Perhaps this is why you're not very enthusiastic about replacing the public sector's visible hand with the invisible hand?
 
Public goods...

1. Variety?  Skyrocket
2. Quality?  Skyrocket
3. Cost?  Plummet

"meh" "meh" "meh"?

Please go ask David Friedman to explain what the fundamental problems of government are that wouldn't be solved by replacing the visible hand with the invisible hand.  Let me know what he says.