Are Congresspeople Omniscient?

[Xerographica]

Values are dependent on the valuer, certainly, but surely you agree that each person has a utility function? I was proposing a set of utility functions that, even if they were known to the market actors, would still not be optimized by your tax choice system. If you cannot prove that a set of such functions does not exist, then you cannot prove that tax choice is optimal (and, indeed would be in some cases suboptimal).

Individuals do not act so as to maximize utilities described in independently existing functions. They confront genuine choices, and the sequence of decisions taken may be conceptualized, ex post (after the choices), in terms of "as if" functions that are maximized. But these "as if" functions are, themselves, generated in the choosing process, not separately from such process. - James M. Buchanan, Order Defined in the Process of its Emergence

Like I said, if your utility function was fixed, constant, static...under a rock somewhere...and it could be found and known along with everybody else's utility functions, then sure, great, Samuelson was right on. No need to allow people to shop for themselves anywhere at anytime...because planners have them covered.

But in real life, your choices are so complex that it's not even funny. All that complexity is lost and wasted when we allow 300 personal shoppers to shop for an entire country. The consequences are going to be infinitely negative...but this will only be known and understood and grasped by those who can sense the alternate reality where all that complexity is integrated.

It really should't be that difficult though to pin down the cause of the allocation disparity between China under Mao Zedong and China under Deng Xiaoping.

Excellent, so you would agree that a society that inefficiently (say at 75%) allocates a $10 value of goods and services is preferable to one that perfectly allocates $5 worth of goods and services?

Eh, the size of the pie absolutely depends on the efficiency of the allocation. Right now our pie is still bigger than China's (not for much longer though). So China with pragmatarianism is infinitely better than the US with socialism.

1) No it's not. It need not be to be utilitarian, as I have shown.

You can't know people's utility functions.

2) Ok, now we must show that this has negatives and no positives. Unless we have some credible evidence of the orders of magnitudes of these effects.

There can't be any positives to limiting input. You just perceive positives because you're failing to see the alternate reality where input is not limited.

3) Do you deny that crashes would occur in the absence of state participation in the market (see: bitcoins)?

Again, markets facilitate heterogeneous activity. The more centralized the economy...the more homogeneous the activity...the greater the frequency and magnitude of the crashes. You're putting far too many eggs in one basket. You're gambling way too much on way too few ideas. The consequence are a given. You're going to have massive failures WITHOUT even moderate successes to balance them out.

The market is not the epitome of a group effort. If it were, then there would be no incentive to lie, and negotiations would consist of honest, accurate accountings of how the total resources of both parties could best be split. The market is merely the only way we have to enforce any amount of cooperation for many goods. Again, do you deny that failures would occur absent government intervention? If you cannot say yes to this question, then you must accept that the market is not perfect (which is what I assume you mean by definitive).

It's a group effort in the sense that the most people can give feedback on how well other people are using society's limited resources. People just don't give positive feedback to uses of society's limited resources that don't make sense to them. Therefore, we minimize nonsensical uses of society's limited resources.

Again, the market is a vetting process. Resources cannot be efficiently allocated without people's freedom of entry and exit. Forcing people to board trains and preventing them from exiting assumes that some people are omniscient. But contrary to popular belief nobody can do enough homework to guarantee the success of any endeavor. And if they are guaranteed funding then it's a given that they won't do even the smallest fraction of the homework that an entrepreneur will do whose funding depends on how well he can persuade others of the potential value of his idea.

First off I have explicitly and repeatedly not assumed that congress people are omniscient, and I would appreciate you refraining from characterizing my argument as such.

How can I not characterize your argument as such? If you're willing to skip the part where you persuade people to invest in your idea...then clearly that degree of certainty implies omniscience. And omniscience is the most charitable characterization for this type of behavior/mindset.

It's not that this information is wholly worthless (though, it's I don't think it's worth as much as I suspect you imagine it is). Rather, it's that a group of independent actors choosing where to put there money aren't going to pick the option with the most total good. Even if they know that that collective choice is optimal. Are you denying that people will try to maximize their own value?

It's a given that people will try and maximize their own value...and this is the only way to determine which option provides the most good/value. I don't know how, in the absence of everybody's spending decisions, you can feel mildly comfortable saying that an option provides the most good. Again, the only way you could be that confident is if you assumed that congresspeople are omniscient. Because you can never never never do enough homework to be that certain.

So we give people the freedom to shop for themselves. Just like in the private sector, they'll give their money to whichever organizations provide them with the most value at that point in time. The government organizations that provide more value will gain funding...while the government organizations that provide less value will lose funding...and we'll derive far more value from the public sector.

Imagine a candy store 500 years ago. It would have provided x amount of value to children. Does a candy store today provide the same exact amount of value? Obviously not. It's a given that it's going to provide infinitely more value. This is simply because in those 500 years...billions and billions of kids gave their money to whichever candy producers came up with more valuable candies. Consumer sovereignty incentivized producers to innovate and come up with better uses of society's limited resources.

A candy maker could never "know" beforehand which candy would produce the most value. This is because nobody is omniscient. Yet through our entire exchange you've held on to the idea that it's reasonable to assume that congresspeople can "know" beforehand which public good will produce the most value. If you drop that assumption then taxpayer sovereignty is the logical conclusion. You really don't want taxpayer sovereignty to be the logical conclusion so you cling to your assumption with all your life.

A collective entity with full control of the purse strings would (assuming pure motivations) pick the options that bring the most value everywhere. Even if that failed to pick what an omniscient actor would pick, the gains from collective action could easily outweigh their small misteps.

Given that we're talking about the public sector...every action should be collective in nature. Therefore, in order to maximize the gains from collective action, we have to allow taxpayers to choose whichever collective action provides them with the greatest gains.

An example: It might have been optimal if I-64 were built exactly 15ft to the north of where it is. The difference in value between that and it's current location, however, is probably much smaller than the difference between it's current location and many small intermittently maintained roads instead of the highway across the country.

If taxpayers were willing to forego the I-64...then it's a given that they had more valuable collective actions to spend their limited tax dollars on. There's a difference in value between a new highway and additional funding for cancer research. Is it possible to compare the potential gains from the two different uses of society's limited resources? Of course, and it's absolutely essential to give people the freedom to do so if we are going to maximize the value we derive from society's limited resources.

I'm saying that even if I could prove beyond any sane doubt that it was a recipe for 1000 years of war (i.e. would be the most valuable possible option), the DoD would not be funded sufficiently. Upon further consideration, I'm not even sure it would be rational for any individual to do so. If I' m part of the 30%, I can fund my favorite program while still reaping the benefits of the DoD being funded.

There's a calculus here. Let's say that you value the EPA and DoD equally. If the DoD is at 100% funding while the EPA is at 10%...well...it's a no brainer how to allocate your taxes. If the DoD is at 90% and the EPA is at 20%...then it's still a pretty easy choice. But obviously as the DoD goes down in funding...and the EPA goes up in funding...then you become more concerned with the safety of the country...and less concerned with the safety of the environment.

So you prioritize your spending decisions to address your biggest concerns...and everybody else does the same...and we minimize concern and maximize prosperity. And this is exactly what happens in the private sector.

Let's say you were convinced of that this was the case on Syria, but you also had the option to give money to "The Xero relief fund." Which would you choose?

Obviously I'd choose the Xero relief fund. You know why? Because in order for that to be an option enough voters would have wanted me to be on the menu. Clearly they derive collective action value from whatever it is that I'm doing with society's limited resources.

Your own page with a few quotes is not really a source. And your rule is based on the assumption that you are infallible. Considering that you have yet to reduce your logic to an axiomatic system whose logic can be check devoid of context, I consider this assumption suspect.

I know that the "logic" of basic economics is seductive, but it is based on a large variety of (not universally valid) assumptions.

The rate of progress has to have an explanation. I'm as certain as I'll ever be that my explanation is correct. If you have a better explanation then I'm all ears.

Did you know that you provide me with more value than any other participant in this thread? If I could only pick one person to exchange with...it would be you. But this can't be known beforehand. And there's no guarantee that another member won't come along and provide me with more value. The point is that it's the Truth that we maximize value when we give people the freedom to choose who they exchange with. Given that it's the Truth it's relevant whether we're talking about this forum or the public sector. Limiting who people trade with limits value. Right now we prevent people from trading in the public sector. If we eliminate this barrier to trade, the result will be infinitely valuable.

[Deutsch South Pacific]

*facedesk times 2*

[Australasia]

Who on Earth has ever assumed that?!

[Nebraska]

Omniscient? I'm not even sure they're sentient!

[Bundesdeutschland]

I think we all know the answer to that.

[Rainbows and Rivers]

Question to the OP: since you insist that crowdsourcing works, how would you feel about a modified system in which the tax money is collected, then distributed equally between all of the country's citizens and then each person allocates it? It would better represent the ideal of tax money being spent on behalf of all of the country's citizens, while also disabusing you that the money that goes to taxes is in any way 'yours.'

[Free Soviets]

In short this is just another hare-brained idea from the idiot idea factory that is modern libertarianism. It can't work — and worse still, any government that employs such an approach won't survive.

the thing i find fascinating is that their 'moderate' ideas are no less ridiculous than their principled ones. hell, sometimes they're even worse. how does that even happen? and so consistently...

[Tekania]

The fact of the matter is...as a group, millions and millions of taxpayers have infinitely more insight/foresight than 300 congresspeople do. That's why we'd be infinitely better off by allowing taxpayers to decide for themselves exactly how much positive feedback (tax dollars) they give to government organizations.

Frankly I do not think foresight grows with population.... if anything I think people get dumber and dumber the larger the groups they are in.

[Tekania]

Despite the the ridiculous burning strawman at the beginning of the thread that I originally mistook for the Yosemite fire, I think I actually might agree with you. I'm not sure though.

Yosemite fire? you thought it was that small a fire? I've seen stellar plumes smaller than the burning strawman in the OP.

[Tekania]

Our current system is based on the assumption that congresspeople are omniscient. (True/False)

Where the fuck did you get this nonsense?

I could post the source, but posting pornographic images tends to be frowned upon in this establishment.

[Xerographica]

Why do you want a small clique of ultra-wealthy persons, many of whom inherit their wealth rather than even pretending to earn it and many more of whom "earn" the money shuffling numbers on sheets of paper to maximise short-term profits even though it means their employers will go bankrupt in 5 years, to decide what level of taxation I should pay, and what should be done with the money?

Why do you want Paris Hilton to have a greater say in how the public finances work than, say, Paul Krugman?

This is pretty great. LOL. I love it. Paris Hilton versus Paul Krugman? That's a really tough one. Is Paris Hilton an idiot? Is Paul Krugman all that? How would Paris Hilton allocate her taxes? How would Paul Krugman allocate his taxes? How much taxes do they each pay? I think you really have to come up with some credible theories regarding their allocation decisions.

What would you consider to be a huge allocation mistake on the part of Paris Hilton? What public goods are so bad that we'd all be worse off if she spent her tax dollars on them? Maybe the war on drugs? Doesn't she do drugs? Does Paul Krugman do drugs? Maybe they both wouldn't spend their tax dollars on the war on drugs?

Who has more loyal followers...Paris Hilton or Paul Krugman? If Paul Krugman tweets that the EPA is underfunded...how much money would would the EPA receive as a direct result? If Paris Hilton tweets that a wall need to be built between us and Mexico...how much money would the INS receive as a direct result?

Paul Krugman has a 1,072,031 followers on twitter while Paris Hilton has 11,939,304 followers. But I'm sure that Krugman's followers pay far more taxes than Hilton's followers. Right? So I think he would have far far far more influence than she would.

Personally, I've shared this article by Krugman...In Praise of Cheap Labor...far more times than I've ever shared anything written by Hilton. Well...I haven't shared anything written by Hilton...so maybe it doesn't say much. But that article by Krugman is pretty excellent. Especially the part where he argues that liberals fail to think things through.

I think if you could manage to think things through in an open minded fashion...then you would see the value of allowing people to shop for themselves in the public sector.

You're assuming that people are (a) economically irrational, (b) utterly altruistic and (c) not short-sighted.

Is giving up all your material possessions and becoming a monk a mistake? Most people would consider it to be a huge mistake. But monks don't pay a lot of taxes. Therefore, their mistake simply limits their influence. People who make more mistakes will have less influence over how taxes are spent than people who make less mistakes.

To be sure, Congress is often not much better - see, for example, the Bush tax cuts of 2001 and 2003, which every serious economist knew would plunge the budget into the red but were done anyway to please the wealthy donors - but at least there are mechanisms for accountability as far as Congress is concerned.

And there wouldn't be mechanisms for accountability in a pragmatarian system? You wouldn't be able to boycott congress? Of course you'd be able to boycott congress...and the president...and the DoD...and any other government organization. You can't have ethical consumerism if you can't shop for yourself.

There is nothing "pragmatic" about your suggestions. Wildly impractical on a practical level, yes (after all, how does one apportion the votes in a consumer-sovereignty political system? Should we present our shopping receipts for votes?). Utterly reprehensible on a moral level, that too. Completely asinine in its unthinking assumptions of benevolent omniscience on the part of a handful of heirs and heiresses, as well. It's also, incidentally, doomed to fall apart within a decade of implementation.

But "pragmatic"? No, nothing of the kind.

So let's have donors to PETA and donors to the NRA pool their donations and elect representatives to divvy up the pool between the two organizations. Because that would be so practical.

If you don't think shopping for yourself is at all practical, then please show me one place where you've promoted allowing congress to spend all our money.

In regard to the italicised, it's nice to see that you subscribe to the essence of Ayn Rand's philosophy, in which there are two classes of people - the heroic makers who know best what to do with everything, and the greedy takers who should be grateful that the makers let them live.

Consumer sovereignty isn't a difficult concept. You know how I know that? Because even Michael Moore gets it...

I'm a millionaire, I'm a multi-millionaire. I'm filthy rich. You know why I'm a multi-millionaire? 'Cause multi-millions like what I do. That's pretty good, isn't it? - Michael Moore

Please tell me that, at least in this one regard, that you're as smart as Michael Moore.

Here it is in more economical terms...

Within the market society each serves all his fellow citizens and each is served by them. It is a system of mutual exchange of services and commodities, a mutual giving and receiving. In that endless rotating mechanism the entrepreneurs and capitalists are the servants of the consumers. The consumers are the masters, to whose whims the entrepreneurs and the capitalists must adjust their investments and methods of production. The market chooses the entrepreneurs and the capitalists, and removes them as soon as they prove failures. The market is a democracy in which every penny gives a right to vote and where voting is repeated every day. - Ludwig von Mises Omnipotent Government

Michael Moore isn't "Atlas" because he's the only one who wants him to be Atlas...he's Atlas because so many other people value how he is using society's limited resources. They build him up because he effectively serves him. And he who can create a thing can destroy a thing. He's at their mercy...they aren't at his mercy. He caters to their preferences...they don't cater to his preferences. He dances to the beat of their drum...they don't dance to the beat of his drum. Why? Because they have the money that he wants.

It would be absurd if the relationship was reversed. But this is exactly the type of absurdity that you support in the public sector. You want consumers to be the subjects rather than the rulers. It's the epitome of counter-productive.

Ashmoria did not claim that Congress should be peoples' "personal shoppers", and no-one - except perhaps yourself - is sufficiently deluded as to believe that this is the function they fulfil.

Congresspeople aren't our personal shoppers? If not, then they are only shopping for themselves. Your interpretation is far less charitable than my own.

[Blakk Metal]

OH MY GOD, WHEN WILL SOMEONE START APPLYING CHEMOTHERAPY!?! WE HAVE A SEVERE MEMETIC CANCER!

Question to the OP: since you insist that crowdsourcing works, how would you feel about a modified system in which the tax money is collected, then distributed equally between all of the country's citizens and then each person allocates it? It would better represent the ideal of tax money being spent on behalf of all of the country's citizens, while also disabusing you that the money that goes to taxes is in any way 'yours.'

Poor people aren't real people.

HEIL RAND! GLORY TO THE FREE MARKETS!

Where the fuck did you get this nonsense?

I could post the source, but posting pornographic images tends to be frowned upon in this establishment.

It isn't even that hot.

[Quackquackhonk]

Our current system is based on the assumption that congresspeople are omniscient. (True/False)

decidely false.

If congresspeople can know, better than society itself, exactly how much benefit society derives from public education...

congresspersons don't, and no assumption has ever been made.

[Quackquackhonk]

"Elected representatives aren't omniscient, therefore representative democracy is bad!"

Elected representatives aren't omniscient, therefore we need a way to determine exactly how much the public values a military strike against Syria, the war on drugs, environmental protection, a wall between the US and Mexico, public healthcare and so on.

...

don't we have a representative democracy? i always thought that was why we elect, reelect, and don't reelect congresspersons?

don't we usually complain to them whenever we want something to happen (or not happen)?

[Xerographica]

Question to the OP: since you insist that crowdsourcing works, how would you feel about a modified system in which the tax money is collected, then distributed equally between all of the country's citizens and then each person allocates it? It would better represent the ideal of tax money being spent on behalf of all of the country's citizens, while also disabusing you that the money that goes to taxes is in any way 'yours.'

It would be great, as long as you first collected everybody's talents, skills, abilities, intelligence, insight, foresight and distributed these things equally between all of the country's citizens. Except, if you did this, then money would already be equally distributed.

Because we can't equally distribute skills...then you'd be royally screwing everybody by distributing money with complete disregard to how well people use society's limited resources.

Of course I'd love a surgeon's money...but arbitrarily giving me half his money implies that what I'm doing with society's limited resources is equally valuable. If it truly was equally valuable then I would already have the same amount of money as he does.

Spend a week evenly distributing your money and let me know whether you're better off or worse off as a result. You won't do it though. You know why? Because you're not crazy. You know very well that no two people provide you with the same exact amount of value...and your shopping decisions reflect this.

Even in this thread no two people are going to provide you with the same exact amount of value. How much value am I providing you by spending my time typing this? I can't know that. Only you can know that. If you don't value this exchange, then you're free to find another member who does provide you with value.

The process of shopping around for more value is priceless. Redistributing wealth destroys value that people made an effort to find.

If I provide you with maximum value...then how would you like half of the time you would have spent on me to be given to another member who doesn't provide you with any value? Clearly you wouldn't. But that's exactly what redistribution is. The incredibly valuable distribution results of millions and millions and millions of shoppers are disregarded by congress who've been given a mandate by voters to come up with a more valuable distribution. The system is beyond absurd. It might take a while but eventually people are going to come to their senses and realize this.

[Rainbows and Rivers]

Question to the OP: since you insist that crowdsourcing works, how would you feel about a modified system in which the tax money is collected, then distributed equally between all of the country's citizens and then each person allocates it? It would better represent the ideal of tax money being spent on behalf of all of the country's citizens, while also disabusing you that the money that goes to taxes is in any way 'yours.'

It would be great, as long as you first collected everybody's talents, skills, abilities, intelligence, insight, foresight and distributed these things equally between all of the country's citizens. Except, if you did this, then money would already be equally distributed.

Because we can't equally distribute skills...then you'd be royally screwing everybody by distributing money with complete disregard to how well people use society's limited resources.

Of course I'd love a surgeon's money...but arbitrarily giving me half his money implies that what I'm doing with society's limited resources is equally valuable. If it truly was equally valuable then I would already have the same amount of money as he does.

Spend a week evenly distributing your money and let me know whether you're better off or worse off as a result. You won't do it though. You know why? Because you're not crazy. You know very well that no two people provide you with the same exact amount of value...and your shopping decisions reflect this.

Even in this thread no two people are going to provide you with the same exact amount of value. How much value am I providing you by spending my time typing this? I can't know that. Only you can know that. If you don't value this exchange, then you're free to find another member who does provide you with value.

The process of shopping around for more value is priceless. Redistributing wealth destroys value that people made an effort to find.

If I provide you with maximum value...then how would you like half of the time you would have spent on me to be given to another member who doesn't provide you with any value? Clearly you wouldn't. But that's exactly what redistribution is. The incredibly valuable distribution results of millions and millions and millions of shoppers are disregarded by congress who've been given a mandate by voters to come up with a more valuable distribution. The system is beyond absurd. It might take a while but eventually people are going to come to their senses and realize this.

I think you may have misunderstood me. The money that would be distributed would be the money that is already collected in taxes. Since it is meant to be spent on behalf of the citizens of a country rather than on behalf of its taxpayers, you should have no problem including all the citizens' value preferences. After all, however successful a millionaire may be, there is no way he can know someone else's preferences, right? Or at least your own argument goes like that.

[Condunum]

Despite the the ridiculous burning strawman at the beginning of the thread that I originally mistook for the Yosemite fire, I think I actually might agree with you. I'm not sure though.

I giggled.

[Xerographica]

I think you may have misunderstood me. The money that would be distributed would be the money that is already collected in taxes. Since it is meant to be spent on behalf of the citizens of a country rather than on behalf of its taxpayers, you should have no problem including all the citizens' value preferences. After all, however successful a millionaire may be, there is no way he can know someone else's preferences, right? Or at least your own argument goes like that.

Imagine that your preferences are a giant diamond with a billion different facets. A successful millionaire isn't successful because he knows all your facets...he's successful because he shines one of your facets better than anybody else does. That's why you choose him to give your money to.

So there he is shining one of your facets. But obviously he's not a alone. There are a billion other people swarming your giant diamond and each one is focusing on shining the facet that you paid them to shine.

Shopping is the process by which you find the people who can shine one of your facets better than anybody else can. Right now you're shopping for economic discussion. And here I am trying to shine this particular facet of yours. But I'm completely oblivious to all your other facets. I have no idea whether you have an artichoke facet or a Paris Hilton facet.

But in the public sector...rather than having a billion representatives each focused on shining a different facet...you have one representative who is trying to shine all your facets. Given that the public sector is half our economy, it behooves us to understand which method is more productive/effective/efficient/valuable.

I think maybe the person closest to you might know quite a few of your facets...but nobody can know your facets better than you can. Nobody can know how you rank the importance of each of your facets. Therefore, everybody would be infinitely better off if taxpayers could choose where their taxes go. Even if you don't make enough money to pay taxes...you're still going to get infinitely better/accurate/customized/tailored representation from your billion representatives who do have to pay taxes.

If the artichoke farmer is one of your representatives then he's going to spend his taxes on the public goods inputs he needs to successfully output artichokes. If Hot Chip is one of your representatives then they are going to spend their taxes on the public goods inputs they need to successfully output awesome music.

The moral of the story is...shine on you crazy diamond. Don't let them put a bushel over your brilliance.

[Keronians]

Our current system is based on the assumption that congresspeople are omniscient. (True/False)

If congresspeople can know, better than society itself, exactly how much benefit society derives from public education...then it has to be true that congresspeople can know, better than society itself, exactly how much benefit society derives from milk. So if we're better off allowing congresspeople to determine how much public education should be supplied, then we're also better off allowing congresspeople to determine how much milk should be supplied.

The fact of the matter is...as a group, millions and millions of taxpayers have infinitely more insight/foresight than 300 congresspeople do. That's why we'd be infinitely better off by allowing taxpayers to decide for themselves exactly how much positive feedback (tax dollars) they give to government organizations.

Diseconomies of scale. Millions of taxpayers may be more knowledgeable than a few hundred congressmen, but they're not going to be better coordinated.

[Alien Space Bats]

Imagine that your preferences are a giant diamond with a billion different facets. A successful millionaire isn't successful because he knows all your facets...he's successful because he shines one of your facets better than anybody else does. That's why you choose him to give your money to.

So there he is shining one of your facets. But obviously he's not a alone. There are a billion other people swarming your giant diamond and each one is focusing on shining the facet that you paid them to shine.

Shopping is the process by which you find the people who can shine one of your facets better than anybody else can. Right now you're shopping for economic discussion. And here I am trying to shine this particular facet of yours. But I'm completely oblivious to all your other facets. I have no idea whether you have an artichoke facet or a Paris Hilton facet.

But in the public sector...rather than having a billion representatives each focused on shining a different facet...you have one representative who is trying to shine all your facets. Given that the public sector is half our economy, it behooves us to understand which method is more productive/effective/efficient/valuable.

I think maybe the person closest to you might know quite a few of your facets...but nobody can know your facets better than you can. Nobody can know how you rank the importance of each of your facets. Therefore, everybody would be infinitely better off if taxpayers could choose where their taxes go. Even if you don't make enough money to pay taxes...you're still going to get infinitely better/accurate/customized/tailored representation from your billion representatives who do have to pay taxes.

If the artichoke farmer is one of your representatives then he's going to spend his taxes on the public goods inputs he needs to successfully output artichokes. If Hot Chip is one of your representatives then they are going to spend their taxes on the public goods inputs they need to successfully output awesome music.

The moral of the story is...shine on you crazy diamond. Don't let them put a bushel over your brilliance.

This doesn't even begin to make sense.

None of the people I give my money to in the marketplace understand whether or not I have a preference for roads without potholes, frequent police patrols within my neighborhood, or a globalist foreign policy aimed at preventing world wars before they happen.

Worse, because none of them are experts in highway engineering, community policing, or geopolitical grand strategy; none of them are inherently any more capable of judging what is best for America than I am.

Indeed, it's quite likely — given the amount of time and energy that they spend trying to do nothing else with their lives save for making lots and lots of money, let alone the fact that they probably live in different neighborhoods than I do (and thus understand neither how potholes nor crime are a problem where I live, or because their attachment to multinational corporations makes them indifferent to the question of whether the nation in which I live gets conquered and enslaved by another [they'll probably just move to some other country, or maybe even collaborate with the aggressors if offered any money to do so and sell me out for a cut of my slave labor]) — that these people are less qualified than I am to make such decisions.

You've made the usual libertarian mistake of failing to realize that some services can't be delivered through the marketplace — especially if we don't even correctly identify who the "consumers" of those services are to begin with (HINT: They're not the taxpayers, especially as individuals; rather, they are the citizenry-at-large, as a collective body with collective interests).

[Infactum]

I'll be snipping some of the quotes to try and keep this post length manageable. I'll try not to remove salient points that haven't been made elsewhere.

Edit: Wow, that got really long. If you are pressed for time/space, I believe your responses to the direct questions I posed along with the final bit about assumptions would be most productive to the discussion.

Individuals do not act so as to maximize utilities described in independently existing functions. They confront genuine choices, and the sequence of decisions taken may be conceptualized, ex post (after the choices), in terms of "as if" functions that are maximized. But these "as if" functions are, themselves, generated in the choosing process, not separately from such process. - James M. Buchanan, Order Defined in the Process of its Emergence

I don't think this quote applies here. Note the bolded. It appears that he is merely presenting a mathematical approximation to try and get some handle on economics. You could take the political/philosophical step and assert that these approximations are reality, but I do not think that is valid. For a utilitarian, I would think it is self evident that utility functions exist independently of making choices (Though they are, in principle, a function of the entire state of the universe). This fact is true whether or not we can understand them at all. Do you agree the utility functions exist independent of choices and our ability to understand them?

That first statement is a problem, as it directly contradicts the notion of a self interested actor, which is required for the market to be a worthwhile way of maximizing value in most places we assume it can. How can an actor be self interested if they do not have interests?

Like I said, if your utility function was fixed, constant, static...under a rock somewhere...and it could be found and known along with everybody else's utility functions, then sure, great, Samuelson was right on. No need to allow people to shop for themselves anywhere at anytime...because planners have them covered.

But in real life, your choices are so complex that it's not even funny. All that complexity is lost and wasted when we allow 300 personal shoppers to shop for an entire country. The consequences are going to be infinitely negative...but this will only be known and understood and grasped by those who can sense the alternate reality where all that complexity is integrated.

They do not have to be known. Actors in the market itself do not know their own utility function (see framing effect wiki). They can be approximated relatively well in many cases. As an extreme example I can guess the relative value that a starving person places on food versus, say headphones. Even if we assert that a person who hasn't eaten for 10+ days and still will sacrifice food for headphones isn't mentally ill, we can be pretty sure that 99+% of such people won't.

Also, the idea of this complexity is not hard to grasp. I understand what you are saying, I believe. I merely think that you are generalizing some concepts inappropriately.

It really should't be that difficult though to pin down the cause of the allocation disparity between China under Mao Zedong and China under Deng Xiaoping.

I will certainly agree that for goods that are non public, non essential (highly elastic), and a have a few other properties required for efficiency, that utility seems to be maximized by the market. I suspect that china benefited markedly from this sector of the market, and that it is an oversimplification to attribute an entire ~30-40 year history of one of the most populous countries on Earth to one sector of public policy.

Excellent, so you would agree that a society that inefficiently (say at 75%) allocates a $10 value of goods and services is preferable to one that perfectly allocates $5 worth of goods and services?

Eh, the size of the pie absolutely depends on the efficiency of the allocation. Right now our pie is still bigger than China's (not for much longer though). So China with pragmatarianism is infinitely better than the US with socialism.

The size of the pie also absolutely depends on concentration of decision making. A person with $1 Billion dollars to spend has more economic and real power than 10,000 people with $100,000 dollars each have total. Do you agree with this statement? I believe I can prove it if not.

And it's the power that matters because it's the power that provides utility.

1) No it's not. It need not be to be utilitarian, as I have shown.

You can't know people's utility functions.

2) Ok, now we must show that this has negatives and no positives. Unless we have some credible evidence of the orders of magnitudes of these effects.

There can't be any positives to limiting input. You just perceive positives because you're failing to see the alternate reality where input is not limited.

3) Do you deny that crashes would occur in the absence of state participation in the market (see: bitcoins)?

Again, markets facilitate heterogeneous activity. The more centralized the economy...the more homogeneous the activity...the greater the frequency and magnitude of the crashes. You're putting far too many eggs in one basket. You're gambling way too much on way too few ideas. The consequence are a given. You're going to have massive failures WITHOUT even moderate successes to balance them out.

1) Yes, but you can certainly approximate them. In many cases very accurately.
2) I see the benefits of gaining input. I also see the downsides of decentralizing power. I think these things balance differently on a case by case basis.
I could say something similar of you: You just perceive positives of gaining input because you fail to see how concentrating power can gain total benefit.
3) The market has it's own inefficiency problems that I believe can be eliminated by government intervention. Natural monopolies/barriers to entry, inefficiencies in the low wage labor market, and enforced information asymmetry come to mind. It doesn't change the fact that crashes imply that the market failed to properly value things (whether it is the "best" way we have to value things or be prosperous is another story).

The market is not the epitome of a group effort. If it were, then there would be no incentive to lie, and negotiations would consist of honest, accurate accountings of how the total resources of both parties could best be split. The market is merely the only way we have to enforce any amount of cooperation for many goods. Again, do you deny that failures would occur absent government intervention? If you cannot say yes to this question, then you must accept that the market is not perfect (which is what I assume you mean by definitive).

It's a group effort in the sense that the most people can give feedback on how well other people are using society's limited resources. People just don't give positive feedback to uses of society's limited resources that don't make sense to them. Therefore, we minimize nonsensical uses of society's limited resources.

Again, the market is a vetting process. Resources cannot be efficiently allocated without people's freedom of entry and exit. Forcing people to board trains and preventing them from exiting assumes that some people are omniscient. But contrary to popular belief nobody can do enough homework to guarantee the success of any endeavor. And if they are guaranteed funding then it's a given that they won't do even the smallest fraction of the homework that an entrepreneur will do whose funding depends on how well he can persuade others of the potential value of his idea.

Oh I agree it's a group effort, it's just far from the epitome of one.

First off I have explicitly and repeatedly not assumed that congress people are omniscient, and I would appreciate you refraining from characterizing my argument as such.

How can I not characterize your argument as such? If you're willing to skip the part where you persuade people to invest in your idea...then clearly that degree of certainty implies omniscience. And omniscience is the most charitable characterization for this type of behavior/mindset.

No, my repeated assertion is that centralized spending decisions give more power than decentralized actors and that, in some cases, this makes up for the inefficiency in allocation of the power created. The whole point is that you don't need to be as informed as the market to have a net benefit.

It's not that this information is wholly worthless (though, it's I don't think it's worth as much as I suspect you imagine it is). Rather, it's that a group of independent actors choosing where to put there money aren't going to pick the option with the most total good. Even if they know that that collective choice is optimal. Are you denying that people will try to maximize their own value?

It's a given that people will try and maximize their own value...and this is the only way to determine which option provides the most good/value. I don't know how, in the absence of everybody's spending decisions, you can feel mildly comfortable saying that an option provides the most good. Again, the only way you could be that confident is if you assumed that congresspeople are omniscient. Because you can never never never do enough homework to be that certain.

You can't be certain that the market centered on the best case either. There are plenty of sets of plausible utility functions (i have provided several now) for which it will certainly not (except by random chance or through misinformation). Lack of complete certainty is not a scathing indictment of a system for no system is certain. Understanding uncertainty and expectation is required for comparing systems.

So we give people the freedom to shop for themselves. Just like in the private sector, they'll give their money to whichever organizations provide them with the most value at that point in time. The government organizations that provide more value will gain funding...while the government organizations that provide less value will lose funding...and we'll derive far more value from the public sector.

But by forcing people's interest's to compete, you lose the cooperative benefits. In some cases it seems plausible that this out weighs efficiency gains.

<snip>

A candy maker could never "know" beforehand which candy would produce the most value. This is because nobody is omniscient. Yet through our entire exchange you've held on to the idea that it's reasonable to assume that congresspeople can "know" beforehand which public good will produce the most value. If you drop that assumption then taxpayer sovereignty is the logical conclusion. You really don't want taxpayer sovereignty to be the logical conclusion so you cling to your assumption with all your life.

I've addressed the notion of approximation above, so I'll focus on the latter accusation.
? If you could convince me that tax choice would lead to a better world, I would certainly support it whole heartedly. I would also be glad to be certain of something in economics - rarely does one encounter a field with such complexity and political muddling of the messages.

A collective entity with full control of the purse strings would (assuming pure motivations) pick the options that bring the most value everywhere. Even if that failed to pick what an omniscient actor would pick, the gains from collective action could easily outweigh their small misteps.

Given that we're talking about the public sector...every action should be collective in nature. Therefore, in order to maximize the gains from collective action, we have to allow taxpayers to choose whichever collective action provides them with the greatest gains.

But they still have to ACT collectively. My $100 to the highway system does not provide the same amount of value as the next $100 to the system and there is no way to know how much it will be funded.

An example: It might have been optimal if I-64 were built exactly 15ft to the north of where it is. The difference in value between that and it's current location, however, is probably much smaller than the difference between it's current location and many small intermittently maintained roads instead of the highway across the country.

If taxpayers were willing to forego the I-64...then it's a given that they had more valuable collective actions to spend their limited tax dollars on. There's a difference in value between a new highway and additional funding for cancer research. Is it possible to compare the potential gains from the two different uses of society's limited resources? Of course, and it's absolutely essential to give people the freedom to do so if we are going to maximize the value we derive from society's limited resources.

But it is my assertion that market actors would not build I-64 despite it being globally better (and demonstrably so) than a patchwork of locally maintained roads. It is the continued problem of local rationality not producing global rationality.

I'm saying that even if I could prove beyond any sane doubt that it was a recipe for 1000 years of war (i.e. would be the most valuable possible option), the DoD would not be funded sufficiently. Upon further consideration, I'm not even sure it would be rational for any individual to do so. If I' m part of the 30%, I can fund my favorite program while still reaping the benefits of the DoD being funded.

<snip>
So you prioritize your spending decisions to address your biggest concerns...and everybody else does the same...and we minimize concern and maximize prosperity. And this is exactly what happens in the private sector.

I could value a highway system 100X more than anything else, but if I know it's going to be funded, I should dump my cash into the next best thing. It is terribly irrational to prioritize you spending decisions based on what you value most. Do you agree with the last sentence?

Let's say you were convinced of that this was the case on Syria, but you also had the option to give money to "The Xero relief fund." Which would you choose?

Obviously I'd choose the Xero relief fund. You know why? Because in order for that to be an option enough voters would have wanted me to be on the menu. Clearly they derive collective action value from whatever it is that I'm doing with society's limited resources.

Poor choice on my end. I did neglect the collective veto you include in your tax choice system. Lets say, instead, that you value the Department of Education, but not as much as you value a millennium of peace and prosperity. Also assume that as long as at least 70% of the budget goes to the military, these 1000 years will be wonderful, but nothing will be different from 71-100%. The Department of Education has a positive return on every dollar you give it (but is still not as valuable as having at least 70% go to the military).

Which would you choose to fund?

Your own page with a few quotes is not really a source. And your rule is based on the assumption that you are infallible. Considering that you have yet to reduce your logic to an axiomatic system whose logic can be check devoid of context, I consider this assumption suspect.

I know that the "logic" of basic economics is seductive, but it is based on a large variety of (not universally valid) assumptions.

The rate of progress has to have an explanation. I'm as certain as I'll ever be that my explanation is correct. If you have a better explanation then I'm all ears.

I suspect strongly that progress is much more related to the exponential rate of technology (especially in the farming and communication sector). We could argue in a whole 'nother thread about how much the market incentived that innovation.

Did you know that you provide me with more value than any other participant in this thread? If I could only pick one person to exchange with...it would be you. But this can't be known beforehand. And there's no guarantee that another member won't come along and provide me with more value. The point is that it's the Truth that we maximize value when we give people the freedom to choose who they exchange with. Given that it's the Truth it's relevant whether we're talking about this forum or the public sector. Limiting who people trade with limits value. Right now we prevent people from trading in the public sector. If we eliminate this barrier to trade, the result will be infinitely valuable.

Well, thank you for the compliment .

I think you've explicitly stated your invalid assumption here, however. Let's take the following as a given (I think it's a decent approximation, but I definitely wouldn't call it the capital Truth - that is reserved for theorems and properly qualified physical laws):

"We maximize value when we give people the freedom to choose who they exchange with."

This statement does not follow:

"Given that it's the Truth it's relevant whether we're talking about this forum or the public sector."

You are conflating dissimilar goods and markets with no reason to assume that these things behave in exactly the same way. It is my contention that you cannot by any means prove that they do (indeed, I believe that they do not), and the examples and situations I have proposed exist to show that this conclusion is incorrect.

[Forsher]

As you've been told many times, there's no apparent reason for a person in location A to help pay for a bridge in location B. Person A possibly doesn't even know where location B is. The government and Person B, however, are aware that a bridge is needed in Location B. The govt. is probably aware because of people like Person B (this is where that division of labour point comes up, govt. is compartmentalised and ultimately there are far more than 300 people in charge of how money is spent in the US, frankly it's naive to think that's true) that a bridge is needed (what is the point of electing representatives that don't represent your interests?). They take money from persons alphabet and then distribute it so that the bridge gets better. The multiplier effect says that this then benefits even Person A.

If the bridge doesn't get built because taxpayers can't be persuaded that it's worth the alternative uses of their tax dollars...then what happens to their money? Their money just disappears? It vanishes? Obviously not...it's put to uses that they value more than the bridge. Is it really so difficult for you to understand and comprehend that perhaps people value something more than the bridge you love so much? Or is it impossible for you to imagine a world where a bridge isn't always going to be the most valuable use of society's limited resources?

You really don't grasp the concept of opportunity cost...

That is not the point. The point here is that for the bridge that you need my money is required. The problem is that I don't care about your bridge. As a result, no bridge, and you're stuck.

Obviously the money would go somewhere else or, alternatively, it'd get spent and wasted because it was used to, say, clear the land in preparation for the bridge but the money dried up before work on building the bridge could start. Either is possible. Doesn't make it the point and that does make this part of your post as irrelevant as yet another quote.

But, no matter whether a particular society has a capitalist price system or a socialist economy or a feudal or other system, the real cost of anything is still its value in alternative uses. The real costs of building a bridge are the other things that could have been built with the same labor and material. This is also true at the level of a given individual, even when no money is involved. The cost of watching a television sitcom or soap opera is the value of the other things that could have been done with that same time. - Thomas Sowell , Basic Economics 4th Ed: A Common Sense Guide to the Economy

Wow, if opportunity cost was actually relevant to the criticism this would have been relevant. That's a first. However, his understanding is somewhat flawed. Opportunity Cost is about the next best... not all the rest.

But, let's be clear, the point was that A has no reason to fund B's bridge but B still needs that bridge.

How many other things could have been built with the same labor and materials? Do you think it's a small list? Do you think that at any given point in time that something on this list of alternative uses might provide more value than your bridge would? Is it really so hard for you to imagine the possibility?

When people can shop for themselves, they evaluate the alternative uses of their money and determine which use provides them with the most value. If they can't shop for themselves then you can't know which use of their money provides them with the most value. Except, clearly you're under the impression that you can. Which is exactly why our current system is based on the assumption that congresspeople are omniscient.

Again, no. The issue is that you're really struggling to grasp the concept that different people have different needs but the only way to actually cover those needs in the case of things like bridges is by pooling resources... and your "idea" gets in the way of that.

You also ignored the other two points. The first was my initial point: your model of government is irredeemably flawed. The second is the apparent contradiction that your stated positions create (final paragraph).

[Forsher]

Degree? I have large degree of difficulty believing that the OP has had any formal education in the subject given that he's disagreed with very basic definitions/concepts such as (but not limited to) opportunity cost and the market itself. However, I've never seen him claim to have had either. As far as I can tell from his post "economics" is his hobby.

dunno about that his posts seem to me like an exited 18 year old who has just started uni a week ago, has skimmed his reading list and now thinks he knows the workings of the universe.

I may be completely wrong in my speculation however.

When I said that Xerographica doesn't make any claim to formal economic education I was quite possibly wrong. It looks more like Xerographica will not talk about the subject at all. I strongly suspect that he has none, has read maybe one paper back in his formative years (hang on, how old are you Xero, these could be his formative years you know) and then followed it up with some highly suspect hobby reading.

I mean, he says he's not a Liberatarian (possibly with a small "l") but there's little practical difference and, in many ways, one is truly categorised by others who usually use the word "libertarian". This is one reason why I don't say I follow any particular school of any particular are (whether philosophy, politics, economics or something else). The other reason is that self-assessment is usually a poor tool.

That's funny... I don't see Paul Samuelson's name on the list of people who helped write the Constitution.

<pause>

Are you laboring under the delusion that Congress is a recent addition to our system of government?

The theory used to be that the king should have the power of the purse because he had divine authority. That theory was trashed. Now the theory is that congresspeople should have the power of the purse because they are omniscient. If you think there's a better public finance explanation for our current system then feel free to share it.

What King? The usual model is that I'm king because daddy said so and daddy killed a couple of people to make himself king because by killing people, other people followed him. Then, later on, someone decides that having God appoint you is a good idea for making people follow you with less effort.

His paper...The Pure Theory of Public Expenditure...has been cited over 5000 times.

I've been quoted about 9000 times (used to be more times than I had posted but I did have quite a few ET posts).

The point? Not everyone agrees with me. The point? Even if people agree with me, that doesn't make me right. The point? Saying this really doesn't demonstrate anything other than the fact I've been quoted a couple of thousand times.

What ASB is trying to make you understand is that the ideas that underpins how your government works have to come from the time when your government was built.

It's like saying that the world's first aeroplane was jet powered because someone wrote a paper explaining how jet engines work.

Hell to the fucking no. That said, they are way more omniscient than a teenager who claims to be more American than those living in the USA despite living in Finland.

Anyways, as for us proposing where our money goes, how about we could get one person from every state/province, and two from every territory (for the USA, it'd be 82 people (32 from the territories and 50 from the states) and in Canada, it'd be 16 people (10 from the provinces and 6 from the territories), chosen to the average person in that region (or people) and describe what they want to see funded, in a commission.

I disagree.

Fundamentally, tax choice exists because you vote for someone who represents your ideas about the national stage (i.e. macro not micro stuff). That's representative democracy and it's a good idea. Your MPs (or senators or congressmen, whatever they're called, let's stick with MPs because we all live in NZ) get your vote because you think, fundamentally, their ideas for the big picture are the same as yours. They don't get your vote because you think they're the best MP to do your groceries (as Xero would have us believe). That MP then helps make government policy (or oppose it if they end up in opposition) and that's where the Budget and stuff come into it with the govt. saying where it's going to spend stuff.

Reality is infinitely preferable to Xerographica's apparently one-man Crusade for tax choice.

[Forsher]

You're talking about the foundation of our system, and in particular where we got the idea that Congress should have the power of the purse.

Nearly 1000 years ago some barons stole the power of the purse from the king because they were fed up with him wasting their money on war after war. I'm really not talking about this.

If you had any understanding of that system, you'd know that the power of the purse belongs to Congress because that's what we arranged in our Constitution.

So again I ask: Did Paul Samuelson write our Constitution? Yes or no?

Right, because I'm going to really want to debate the economic rationale of the constitution instead of the economic rationale of the preeminent liberal economist. Are you serious? If you want to talk about the economic value of the constitution...then be my guest. But don't try and argue that it's something that I find value in discussing.

It doesn't matter that you don't think that they're a particularly valuable avenue of discussion because they're still ideas that make your assertions wrong. To an extent, the criticisms I mentioned last time still apply now.

[Xerographica]

"We maximize value when we give people the freedom to choose who they exchange with."

This statement does not follow:

"Given that it's the Truth it's relevant whether we're talking about this forum or the public sector."

You are conflating dissimilar goods and markets with no reason to assume that these things behave in exactly the same way. It is my contention that you cannot by any means prove that they do (indeed, I believe that they do not), and the examples and situations I have proposed exist to show that this conclusion is incorrect.

Goods can't behave at all. People behave. And you either value their behavior or you do not. A market is a bunch of people going around deciding how much they value other people's behavior.

Public goods are dissimilar though in the sense that people can benefit from them without having to contribute to them. For example, let's say that Bob values my efforts to share basic economics with others. But he strongly suspects that I'm going to continue to do so whether or not he gives me some positive feedback (money). So he doesn't chip in...and because of a lack of positive feedback...I discontinue my efforts and Bob is worse off (by his own standards) as a result. But if Bob was forced to set aside $40 a month for "public goods"...then why wouldn't he give me some money if he valued my efforts more than he valued the alternative uses of these "tax dollars"?

However no decentralized pricing system can serve to determine optimally these levels of collective consumption. Other kinds of "voting" or "signalling" would have to be tried. But, and this is the point sensed by Wicksell but perhaps not fully appreciated by Lindahl, now it is in the selfish interest of each person to give false signals, to pretend to have less interest in a given collective consumption activity than he really has, etc. I must emphasize this: taxing according to a benefit theory of taxation can not at all solve the computational problem in the decentralized manner possible for the first category of "private" goods to which the ordinary market pricing applies and which do not have the "external effects" basic to the very notion of collective consumption goods. - Paul A. Samuelson, The Pure Theory of Public Expenditure

False signals. Sure, people are utility maximizers. Everybody wants the most bang for their buck. If taxes were voluntary...and people understood that their tax obligation depended on the answers they gave...then obviously they would have an incentive to lie about how much benefit they derived from any particular public good...in order to pay less taxes. They would have a monetary incentive to lie.

But what happens if their tax obligation was a given? If they have to pay $10,000 in taxes no matter what, then what incentive could they possibly have to give false signals? If the $10,000 is a foregone conclusion, given that people are utility maximizers, they'll have an incentive to shop around and try and get the most bang for their buck.

Millions of taxpayers shopping around trying to get the most bang for their buck will incentive producers to give taxpayers the most public goods for their tax dollars.

So yes...public goods are dissimilar to private goods. But once we incentive people to give true signals, then in both situations we simply have people going around deciding how much they value other people's behavior.

Thus, considered in themselves, in their own nature, in their normal state, and apart from all abuses, public services are, like private services, purely and simply acts of exchange. - Frédéric Bastiat, Private and Public Services

You exchange $5 for a haircut because you value the haircut more than you value the alternative uses of those $5 dollars. You exchange $300 for environmental protection because you value the environment more than you value the alternative uses of those $300 dollars. Opportunity cost is relevant and essential no matter whether we're talking about private goods, club goods or public goods.

Once a tax obligation is a foregone conclusion, then heck, you might as well get the most bang for your buck...

Under most real-world taxing institutions, the tax price per unit at which collective goods are made available to the individual will depend, at least to some degree, on his own behavior. This element is not, however, important under the major tax institutions such as the personal income tax, the general sales tax, or the real property tax. With such structures, the individual may, by changing his private behavior, modify the tax base (and thus the tax price per unit of collective goods he utilizes), but he need not have any incentive to conceal his "true" preferences for public goods. - James M. Buchanan, The Economics of Earmarked Taxes

We cannot provide efficient levels of public goods without knowing people's true preferences for public goods. Samuelson's theoretical model assumes that people's preferences are given...but most public finance economists understand the necessity of determining people's true preferences.

This is the best "nutshell" description...

Nevertheless, the classic solution to the problem of underprovision of public goods has been government funding - through compulsory taxation - and government production of the good or service in question. Although this may substantially alleviate the problem of numerous free-riders that refuse to pay for the benefits they receive, it should be noted that the policy process does not provide any very plausible method for determining what the optimal or best level of provision of a public good actually is. When it is impossible to observe what individuals are willing to give up in order to get the public good, how can policymakers access how urgently they really want more or less of it, given the other possible uses of their money? There is a whole economic literature dealing with the willingness-to-pay methods and contingent valuation techniques to try and divine such preference in the absence of a market price doing so, but even the most optimistic proponents of such devices tend to concede that public goods will still most likely be underprovided or overprovided under government stewardship. - Patricia Kennett, Governance, globalization and public policy

"Given the other possible uses of their money"...opportunity cost. If we create a market in the public sector and allow taxpayers to shop for themselves, then it's a given that they will evaluate the alternative uses of their tax dollars. The result will be the optimal provision of public goods.

Poor choice on my end. I did neglect the collective veto you include in your tax choice system. Lets say, instead, that you value the Department of Education, but not as much as you value a millennium of peace and prosperity. Also assume that as long as at least 70% of the budget goes to the military, these 1000 years will be wonderful, but nothing will be different from 71-100%. The Department of Education has a positive return on every dollar you give it (but is still not as valuable as having at least 70% go to the military).

Which would you choose to fund?

Why am I assuming that defense, rather than education, will be the key to future peace and prosperity? If I could truly know that then yeah, you should really want me to be a dictator. But I can't know that so we infinitely increase our chances of success by allowing people to invest in different solutions to the same problem...

A second point of broad consensus among critics stresses that publicness in consumption must not necessarily mean that all persons value a good’s utility equally, Mendez (1999), for example, illustrates this point by examining peace as a PG. Some policy-makers might opt for increased defense spending in order to safeguard peace. However, this decision could siphon off scarce resources from programmes in the areas of health and education. Other policy-makers might object to such a consequence and prefer to foster peace through just the opposite measure -- improved health and education for all. Especially under conditions of extreme disparity and inequity, the first strategy could indeed provoke even more conflict and unrest, securing national borders by unsettling people’s lives. - Inge Kaul, Public Goods: Taking the Concept to the 21st Century

I could value a highway system 100X more than anything else, but if I know it's going to be funded, I should dump my cash into the next best thing. It is terribly irrational to prioritize you spending decisions based on what you value most. Do you agree with the last sentence?

If what I value most isn't at all feasible then maybe I should focus on investing in plausible endeavors. But nothing ventured nothing gained. If people could choose where their taxes go...then there are going to be as many different investment strategies as there are people.

But it is my assertion that market actors would not build I-64 despite it being globally better (and demonstrably so) than a patchwork of locally maintained roads. It is the continued problem of local rationality not producing global rationality.

In a pragmatarian system, I don't think it would be unreasonable for taxpayers to have the option to give their taxes to foreign governments...A Global Free-trade Agreement for Public Goods. That's infinitely more global than our current system.

I've addressed the notion of approximation above, so I'll focus on the latter accusation.
? If you could convince me that tax choice would lead to a better world, I would certainly support it whole heartedly. I would also be glad to be certain of something in economics - rarely does one encounter a field with such complexity and political muddling of the messages.

Scarcity means that you can either choose x or y...

It is through the gaze of my extinguished self that I realize the limitations that make scarcity necessary. Through this gaze into my own limitedness - a limit always established by the impending cessation of space and time for me - through this gift of death, I discover in nature the best way to be efficient. Thanks to death I must choose x rather than y. This has become a feature of 'nature' - a demystified 'nature' that bears no possibility of participation in the eternal. This is consistent with capitalism. - D. Stephen Long

Yeah...no participation in the eternal...but definitely participation in building a better world.

Basically you have an idea of...heaven...but on earth. So you choose whichever option (x or y) will result in the shortest distance between you and your utopia. Should you give your tax dollars to the EPA...or the DoD...which decision will bring you closer to a better world?

Each taxpayer could be contributing to a community which would become more reflective of the kind of world in which he or she would like to live. Gaudeat Emptor! - Daniel J. Brown, The Case For Tax-Target Plans

But by forcing people's interest's to compete, you lose the cooperative benefits. In some cases it seems plausible that this out weighs efficiency gains.

Given scarcity...people's interests are always competing...

By preferring my work, simply by giving it my time, my attention, by preferring my activity as a citizen or as a professional philosopher, writing and speaking here in a public language, French in my case, I am perhaps fulfilling my duty. But I am sacrificing and betraying at every moment all my other obligations: my obligation to the other others whom I know or don’t know, the billions of my fellows (without mentioning the animals that are even more other others than my fellows), my fellows who are dying of starvation or sickness. I betray my fidelity or my obligations to other citizens, to those who don't speak my language and to whom I neither speak or respond, to each of those who listen or read, and to whom I neither respond nor address myself in the proper manner, that is, in a singular manner (this is for the so-called public space to which I sacrifice my so-called private space), thus also to those I love in private, my own, my family, my son, each of whom is the only son I sacrifice to the other, every one being sacrificed to every one else in this land of Moriah that is our habitat every second of every day. - Jacques Derrida, The Gift of Death

God I love that passage. Here's the same thing in economic terms...

The concept of opportunity cost (or alternative cost) expresses the basic relationship between scarcity and choice. If no object or activity that is valued by anyone is scarce, all demands for all persons and in all periods can be satisfied. There is no need to choose among separately valued options; there is no need for social coordination processes that will effectively determine which demands have priority. In this fantasized setting without scarcity, there are no opportunities or alternatives that are missed, forgone, or sacrificed. - James M. Buchanan

No, my repeated assertion is that centralized spending decisions give more power than decentralized actors and that, in some cases, this makes up for the inefficiency in allocation of the power created. The whole point is that you don't need to be as informed as the market to have a net benefit.

The size of the pie also absolutely depends on concentration of decision making. A person with $1 Billion dollars to spend has more economic and real power than 10,000 people with $100,000 dollars each have total. Do you agree with this statement? I believe I can prove it if not.

And it's the power that matters because it's the power that provides utility.

Let's say that I find you the absolutely cheapest ticket to Timbuktu. Therefore, you should buy the ticket regardless of your preferences?

The public sector fails because because preferences are assumed. As a result, it's a given that we end up with quantities of public goods that do not match the preferences of taxpayers...but it's ok because the public goods were produced in the least costly manner. Taxpayers would have preferred more education...but instead they received more war. But no worries...the bullets were bought in bulk. I didn't need to have a heart transplant...but at least I got a great deal. My preference is to date women, but at least the guy I'm dating is low maintenance. I like to look on the bright side.

Economies of scale are only valuable when whatever is being produced truly matches consumers' preferences. Otherwise, you're simply destroying value. You're shifting resources away from more valuable uses.