Is This Forum A Market?

[Xerographica]

You completely missed my point. What I mean is that if we use the word market to cover this forum, you have to stretch the meaning of the word itself so far that basically any human interaction, an "exchange of ideas", becomes a "market", meaning there's no point in using such a meaningless word. Therefore, we should try not to to keep the admittedly important word "market"'s meaning intact.

Noooooo...you completely missed my point. The point is to compare resource allocation systems. The two systems are markets and not-markets...

Market: bottom up, decentralized, invisible hand
Not-market: top down, centralized, visible hand

This forum is clearly a market. Nobody directed you here. You're here because you chose to be here. You're here voluntarily spending your time on this thread. In other words, you're allocating your resources according to your preferences and circumstances.

If you can understand how and why this market works...then perhaps you can understand what would happen if we turned this forum into a not-market.

Should we turn this forum into a not-market? Nobody has attempted to answer this question. Yet, whenever I suggest turning our public sector into a market...nearly everybody disagrees. How can people know the answer to the latter but not the former?

Clearly we have some digging and figuring to do.

Why should this forum be a market? Why should our public sector be a not-market?

From my perspective...it's quite clear why not-markets fail...

If I go to a restaurant...should there be a disparity between what I order and what I'm served?

Xero: I'd like a tuna sandwich
Waiter: Here's a knuckle sandwich

The supply really did not match the demand. Value was destroyed as a result.

Waiters aren't omniscient. They can't guess our orders...which is why they have to take our orders. If we turned this forum into a not-market...supply really would not match demand. How could it? If consumers can't communicate demand...then how can producers possibly know what to supply? If we can't shop for ourselves...then how can the allocation of resources possibly reflect our preferences and circumstances?

If you think voting for representatives results in a more valuable allocation of resources...then why don't you start a not-market forum?

[Galloism]

This forum is clearly a market. Nobody directed you here. You're here because you chose to be here. You're here voluntarily spending your time on this thread. In other words, you're allocating your resources according to your preferences and circumstances.

Is this the definition of what is a market?

Are you sure about that?

Waiters aren't omniscient. They can't guess our orders...which is why they have to take our orders.

I don't know about you guys, but this thread is not what I ordered. I was supposed to get pie.

[Xerographica]

Democracy is an electoral system. It has precisely nothing to do with economic structure.

Yet the government allocates billions of dollars. I suppose you blame the market when the economy falters.

No I'm not. I'm throwing my opinions at the world in general. You, quite frankly, are irrelevant. If somebody else started responding to my posts instead of you, I almost certainly wouldn't notice the change (unless it happened to be one of the handful of people around here that I know well enough to recognise). I'm not, in any way, giving you time, any more than somebody who reads a book is giving the author anything more than the purchase cost. We are not trading time, we are choosing how to spend our time. I'm not giving you the time, you don't have more time because I'm spending time reading your posts.

Market = choosing how you spend your money
Not-market = choosing how you spend your time

That's not right. It's wrong wrong wrong. Time, like money, is a resource. If you can choose how you spend your resources, whatever they might be, then it's a market. If you can't choose how you spend your resources, whatever they might be, then it's a not-market.

No it isn't, there's no trade happening.

Allocation is happening. And it's certainly not top down allocation. Therefore, it's a market.

Money: yes, you are giving them something. Time: no, you don't give them anything.

Is that what your friends and family tell you when you spend your time with them?

Both of these involve some form of mutual, exclusive benefit. There is no such in this situation.

This situation isn't mutually beneficial? We aren't both deriving utility from this use of our limited resources? Shenanigans. It's shenanigans because neither of us has to be here. Really.

Because it isn't a question. It's a claim, that is clearly false.

Do you enjoy the freedom to choose which threads you reply to? Would you prefer if you could elect somebody to choose for you?

OK, if you prefer it that way, you have just presented evidence that these forums are not a market. None of those things would be affected by any change in this forum saving the population of it, but if it were a market, you would expect them to be affected. Thus, this is not a market.

So people would enjoy this forum just as much if they weren't allowed to choose which threads they replied to? Care to bet on that?

This is singularly irrelevant and shows a total lack of understanding of what the phrase "public good" means. I'll give you a hint: you absolutely can, and do, choose what public goods you spend your time on. By definition, you do not need to spend money on them. Something being a public good has zero relevance to the government. Governments produce non-public goods, and private individuals produce public goods.

- irrelevant ideological garbage snipped -

Do you know which Nobel Prize winning liberal economist came up with the definition of a public good? Need a hint? Read the OP.

See...I don't snip things that liberal economists write. I read them. This means that I understand your arguments better than you do. How long do you think it will take you to realize this?

[Orham]

[note]I say this sincerely and with no malice: you're taking peoples' complaints about the repetitive nature of your threads far too seriously.[/note]

Eh, I'll go with the "forums are economies" metaphor. It's not entirely baseless, though it's not strictly true either. Anyway, on to the nitty-gritty then.

If this forum wasn't a market...then it would be a command economy. We wouldn't be able to shop around for the most valuable threads to spend our time on. Instead, we'd be marionettes, our time would be allocated for us. Planners would create threads and allocate our time/replies accordingly. It's a given that we'd spend most of our limited time reading and writing about topics that really didn't match our preferences.

Suppose there were an economic system where some, but not all exchanges were carried out within market contexts? For example, suppose the state were to hold a monopoly on utility services such as electric power and water, funding these endeavors through a utility tax, but the pizza delivery services in the country of interest fell squarely within the purview of private actors distributing their goods and services within the framework of a competitive market. A sort of mixed economy if you will, one with both market and command characteristics. If we are to describe this forum as an economy (and I certainly question the value of doing so), it's most definitely a mixed economy rather than a pure market or pure command economy.

To demonstrate that this is the case, I ask this: where is the market in moderation on this forum? It would appear to me that there's no such thing, and there are even rules in place which specifically prohibit the creation of competing moderation teams. For example, the warn tag is specifically reserved for moderators, impersonation of a moderator is a punishable act, and the only forum in which to carry out and discuss moderation functions is the one provided by the website's administration. Beyond perhaps selecting a specific moderator to send a private message about your complaint there is no choice present, and that is more equivalent to choosing to report a problem to Officer Jones instead of Officer James at the same police department while hoping you'll get the one you want to handle the report to actually do so personally.

Furthermore, at the end of the day the moderation team is under no inherent obligation to take your preferences on the matter of who handles your report into consideration. If you don't like that NERVUN was the moderator who delivered a ruling on your complaint you must either provide a solid reason why it should be someone else doing the judging (such as providing evidence that the moderator in question would not be a neutral party on the report to be discussed), or you must appeal the decision and hope the moderator you wanted is the one who offers a second opinion. You cannot say "I specifically want Reploid Productions to judge this case" and reasonably expect to get your way based solely on that preference. Likewise, just because you send a telegram to Dread Lady Nathicana about a problem doesn't mean that's who will handle the issue. It could just as easily be passed along to someone else with more time, just as Officer Jones may defer to Officer James despite your hopes that Jones would handle the report.

See? No choice.

That leads me to my next point: moderator activity itself (the good to be supplied) is not even remotely impacted by demand (users posting reports). No matter the preferences of the "consumers" (that is, us) for a specific moderator activity, and no matter how many times the "consumers" express their preferences in the form of demand by posting threads requesting that activity, the moderation team "distributes" moderation activity according to its own schedule and terms. No matter how much people may want a particular user to be registered as delete on sight, until the moderation team deems this to be appropriate action according to forum rules it will not respond to that demand by providing supply (permanently banning that user). That's an interaction more similar to ration dynamics than market dynamics, and so moderation activity on this forum is more characteristically distributed according to the principles of a command system than a market system. That is, by the way, the preferable state of affairs as far as I'm concerned. A moderation market, and especially an unregulated one (which it would need to be in order to be a characteristically pure market rather than a regulated market), would be unable to deliver objective rulings guided solely by the forum's equivalent to rule of law.

See? Supply and demand, as far as moderation is concerned, aren't being guided by market activity. The moderation supply is being rationed, distributed according to a planned schedule and set protocol which operates independently of present demand levels or consumer preferences for a particular sort or amount.

This forum, if it is to be metaphorically examined as an economy at all, is definitely neither a pure market system nor a pure command system. It is certainly a mixed system, and the reason why is because some services it provides are delivered according to command principles rather than market principles.

Do you think it's a coincidence that there isn't a single forum that is a command economy or a representative democracy? Maybe? Perhaps it's just been overlooked? It's entirely possible that nobody thought to create a forum structured exactly like our public sector. Well...now the thought is out there. If you truly believe that our public sector creates so much value...then you'll jump at the chance to earn your own magic moon by starting a representative forum.

Xero, there are forums and websites where moderators are elected officials rather than appointed ones. Rational Wiki is an example.

Boy...wouldn't I be surprised if one of you actually did it? I'd be even more surprised if you made any money. Holy cow would you make me eat my words. How awesome would that be for you? You'd have plenty of money and real evidence that command economies can function and even thrive.

You dug yourself pretty deep with this one considering there are sites which charge premiums for use of their services (online tutoring services come to mind), forum moderators may or may not be elected officials (Rational Wiki), and NS is a profitable site regardless of the fact that its moderation services are rationed.

...really, you've dug so deep I can't even see you anymore.

EDIT: Typo. Changed "you've" to "you". Highlighted in blue.

[Maqo]

Wouldn't the 'command economy' version of a forum just be a blog? And indeed there are many successful monetised blogs?

[Xerographica]

[note]I say this sincerely and with no malice: you're taking peoples' complaints about the repetitive nature of your threads far too seriously.[/note]

It's just a helpful reminder. Kinda like some people need a friendly reminder that coffee from McDonald's is hot.

Eh, I'll go with the "forums are economies" metaphor. It's not entirely baseless, though it's not strictly true either. Anyway, on to the nitty-gritty then.

I like the part where you're the first person to point out that this forum is a mixed economy. Except, you didn't even come close to tackling my actual argument.

You spent quite a bit of time spelling out the obvious...that the supply of police isn't determined by the demand for police...but then when it came time to explaining why the visible hand wouldn't work for threads (my actual argument)...this is all the magic I got for my moment...

A moderation market, and especially an unregulated one (which it would need to be in order to be a characteristically pure market rather than a regulated market), would be unable to deliver objective rulings guided solely by the forum's equivalent to rule of law.

Your mission, if you choose to accept, is to explain to me why it wouldn't work to elect representatives to choose which threads consumers reply to. I know the answer...do you? If you don't know the answer...then how can you know that your answer regarding police is correct?

See? Supply and demand, as far as moderation is concerned, aren't being guided by market activity. The moderation supply is being rationed, distributed according to a planned schedule and set protocol which operates independently of present demand levels or consumer preferences for a particular sort or amount.

If the command outcome for police is more valuable than the market outcome would be...then why isn't this also true for threads? This is my question...which is based on my argument...which you entirely failed to address.

This forum, if it is to be metaphorically examined as an economy at all, is definitely neither a pure market system nor a pure command system. It is certainly a mixed system, and the reason why is because some services it provides are delivered according to command principles rather than market principles.

You missed my argument the first time. And I thought it was quite obvious. So perhaps it will help if I make it even more obvious. So...ok...I'm not disagreeing that this forum is a mixed economy. And, mad props for pointing that out. But, it doesn't help us tackle the issue of why elected representatives couldn't create more value by choosing which threads we replied to.

Xero, there are forums and websites where moderators are elected officials rather than appointed ones. Rational Wiki is an example.

Again, and again, and again...there aren't any forums which choose for you which threads you reply to. Should there be? If not, then why not? If so, then please let me know when you start one. Maybe then you'll learn why command economies fail. How priceless would it be to have that knowledge?

You dug yourself pretty deep with this one considering there are sites which charge premiums for use of their services (online tutoring services come to mind), forum moderators may or may not be elected officials (Rational Wiki), and NS is a profitable site regardless of the fact that its moderation services are rationed.

Again, again, again and again...there aren't any forums which determine which threads you spend your time on. Why is that?

...really, you've dug so deep I can't even see you anymore.

Errrr...you've simply closed your eyes...that's why you can't see me anymore. If you want to bury me that badly...then start a forum where elected representatives choose which threads you reply to. If it thrives...then my world view would be annihilated. It will be an extremely unpleasant feeling. But so be it. I prefer reality. What about yourself?

If you had a million dollars laying around...I'm sure you wouldn't hesitate throwing $10,000 at the development of your proof. But that's not the case right? And I don't think you're going to sell your car to start a representative forum. And you're probably not going to ask the bank for a loan. So why not try and crowdfund it?

If you try and crowdfund it...then you can see if there's any demand for a forum where elected representatives dictate which threads you reply to.

While I'm here...let me share a bit of my reality with you.

In my OP I mentioned The Pure Theory of Public Expenditure. It was written in 1954 by the Nobel Prize winning liberal economist Paul Samuelson. It is by far the most widely cited economic justification for government.

His argument was that, because people can benefit from public goods without having to pay for them, it wouldn't work to simply ask people how much they value public goods. People would have an incentive to state that they value public goods less than they actually do. As a result, public goods would be undersupplied. Therefore, compulsory taxation is necessary.

Samuelson and I agree on this pretty fundamental point. Everybody wants a free lunch. We all want to externalize costs.

This leaves us with the issue of determining how much people truly value public goods. Is it important to figure this out? Well...yeah...the optimal supply depends on this information. You can't say, "hey man nice shot" if you don't know where the target is. In economics, the target is demand. The value of the supply is judged by its proximity to demand. How valuable is this thread? The answer depends on how closely it matches the preferences of consumers.

What Samuelson did was simply assume that government planners already know what our preferences are. In other words, he just assumed that government planners are omniscient. Seriously. I really disagree with Samuelson on this fundamental point. And I sure wasn't the only one.

Two years after Samuelson published his paper...Charles Tiebout published A Pure Theory of Local Expenditures. It's been cited over 10,000 times...which gives you a pretty decent idea of its importance.

Tiebout's paper was a response to Samuelson's argument that it was impossible to discern people's true preferences for public goods. In his paper, Tiebout argued that people will move to whichever communities supply levels of public goods which most closely match their preferences. Basically, foot voting solves the preference revelation problem. Well...it was a great argument because there was a decent amount of truth to it...but many economists were not very satisfied with the answer. Therefore, many economists have been trying to figure out other ways to get people to reveal how much they value public goods.

Now, I'm pretty sure you've never even heard of Tiebout or his extremely well cited paper. Just like I'm sure you've never heard of any of the economists since then who've attempted to solve the preference revelation problem. Clearly you're not even aware of the preference revelation problem.

I'm especially bringing up Tiebout though because of his relevance to your post. In the real world...there are significant costs to moving to a new community. Foot voting is not cheap. So the push/pull has to be pretty significant before you'll move to the next community...let alone to another country.

But this really isn't the case with forums. Foot voting for a different forum is far less costly than foot voting for a different real life community. It was pretty much the easiest thing for people to migrate from Friendster to MySpace to Facebook. And unlike real communities...we can live simultaneously in numerous online communities. This means that the supply of public goods in forums will more closely match the preferences of consumers than the supply of public goods in towns will. It's far easier to start a new forum than it is to start a new town.

So you're right that this forum is a mixed economy...but the supply of public goods is more accurate/valuable (closer to the target) because leaving (exit) is relatively easy. If it was just as easy to move in the real world...then it wouldn't be as important to try and help people understand why pragmatarianism is by far the best option.

In 1963, seven years after Tiebout published his paper, the Nobel Prize winning market economist, James Buchanan, published The Economics of Earmarked Taxes. It's only been cited 246 times. Sometimes it takes the crowd a while to recognize an Easter Egg. That being said, the crowd finds infinitely more Easter Eggs than government planners can.

Buchanan's argument was basically that if people have to pay taxes anyways, then it's in their selfish interest to spend their taxes on the public goods that most closely match their preferences. If your buck is a foregone conclusion, then you might as well spend it on whatever gives you the most bang. If your moment is a foregone conclusion, then you might as well spend it on whatever gives you the most magic. If you've already paid for a buffet...then you might as well select the dishes that you find most delicious. When consumers are free to spend their time/money on the items that most closely match their preferences...producers have the strongest possible incentive to try and supply better items. As I said in an earlier post...consumer choice has very beneficial consequences.

To summarize...

1954 - Samuelson - omniscient government planners
1956 - Tiebout - foot voting
1963 - Buchanan - tax voting

Foot voting and tax voting are by no means mutually exclusive. But it's the epitome of throwing the baby out with the bath water if people totally exit because they don't have the option to specifically exit. It would destroy value if the only way you could exit from this thread would be to exit from this forum. Therefore, you should be free to exit from funding the war on drugs just like you're free to exit from this thread. You should be free to exit from funding the DoD just like you're free to exit from the NRA.

Imagine how absurd it would be if the only way vegetarians could avoid buying meat would be to move to a town where nobody purchased meat. If you take that absurdity and multiply it by a really giant number you end up with our public sector.

First you move your money/time...and if that doesn't work...then you move yourself.

I like your sig by the way. At this stage in the game...there's no such thing as bad publicity.

Also, out of curiosity...have you ever wondered whether you're more analytical than most?

[Desmendura]

No. This is a place where we discuss and debate various topics as well as chat (TET).

[Orham]

It's just a helpful reminder. Kinda like some people need a friendly reminder that coffee from McDonald's is hot.

Seems a lot more like a moody quip to me.

I like the part where you're the first person to point out that this forum is a mixed economy. Except, you didn't even come close to tackling my actual argument.

You spent quite a bit of time spelling out the obvious...that the supply of police isn't determined by the demand for police...but then when it came time to explaining why the visible hand wouldn't work for threads (my actual argument)...this is all the magic I got for my moment...

I'm sorry, you're right. I got buried in the details of the metaphor and missed the larger point.

Your mission, if you choose to accept, is to explain to me why it wouldn't work to elect representatives to choose which threads consumers reply to. I know the answer...do you? If you don't know the answer...then how can you know that your answer regarding police is correct?

We've already danced this dance, Xero. It makes no sense for a government planner to dictate how much milk goes in your refrigerator since you have all the necessary information, but it makes sense to allow elected officials with access to classified information to determine whether or not the DoD should receive additional funding from the public money pool.

The threads are milk, and the moderation team is the DoD.

If the command outcome for police is more valuable than the market outcome would be...then why isn't this also true for threads? This is my question...which is based on my argument...which you entirely failed to address.

Because you're talking about two characteristically different goods, with intrinsically different social consequences concerning their distribution and use? Are you seriously asking me why we don't treat milk and fighter jets the same way? Seriously?

I like your sig by the way. At this stage in the game...there's no such thing as bad publicity.

Yep, your ideas are definitely going to become more popular by having people read Galloism's explanation of how your system could be easily circumvented. Makes perfect sense.

Also, out of curiosity...have you ever wondered whether you're more analytical than most?

I'd love it if you told me.

[Maqo]

In my OP I mentioned The Pure Theory of Public Expenditure. It was written in 1954 by the Nobel Prize winning liberal economist Paul Samuelson. It is by far the most widely cited economic justification for government.

His argument was that, because people can benefit from public goods without having to pay for them, it wouldn't work to simply ask people how much they value public goods. People would have an incentive to state that they value public goods less than they actually do. As a result, public goods would be undersupplied. Therefore, compulsory taxation is necessary.

Samuelson and I agree on this pretty fundamental point. Everybody wants a free lunch. We all want to externalize costs.

I feel like you haven't read that paper at all. You hold it up as some kind of ultimate truth about economics, yet your entire theory of pragmatarianism is in disagreement with the paper.

This leaves us with the issue of determining how much people truly value public goods. Is it important to figure this out? Well...yeah...the optimal supply depends on this information. You can't say, "hey man nice shot" if you don't know where the target is. In economics, the target is demand. The value of the supply is judged by its proximity to demand. How valuable is this thread? The answer depends on how closely it matches the preferences of consumers.

What Samuelson did was simply assume that government planners already know what our preferences are. In other words, he just assumed that government planners are omniscient. Seriously. I really disagree with Samuelson on this fundamental point. And I sure wasn't the only one.

Can you point on where Samuelson said that they are omniscient? I can't see anything of the kind.
What he said was:
"No decentralized pricing system can serve to determine optimally these levels of collective consumption", and "it is in the selfish interest of each person to give false signals".
Your view of pragmatarianism does not change those facts.

At first I thought you didn't understand economics, but it seems clear now you don't understand logic.

You say:

As a result, public goods would be undersupplied. Therefore, compulsory taxation is necessary. Samuelson and I agree on this pretty fundamental point. Everybody wants a free lunch. We all want to externalize costs

And you quote Buchanan:

Buchanan's argument was basically that if people have to pay taxes anyways, then it's in their selfish interest to spend their taxes on the public goods that most closely match their preferences. If your buck is a foregone conclusion, then you might as well spend it on whatever gives you the most bang.

But then somehow you miss the point of both of those statements and reach the conclusion:

When consumers are free to spend their time/money on the items that most closely match their preferences...producers have the strongest possible incentive to try and supply better items.

Wherein you miss the point that all three papers made: it is in people's interests not to reveal their true preferences for public goods.
Followed by the equally asinine:

As I said in an earlier post...consumer choice has very beneficial consequences.[...] Therefore, you should be free to exit from funding the war on drugs just like you're free to exit from this thread. You should be free to exit from funding the DoD just like you're free to exit from the NRA.

The point is to AVOID that situation. The purpose of compulsory taxation is to avoid letting people spend their own money on public goods because they won't truly indicate their preferences. Yet you're going to take the worst of both situations: compulsory taxation yet letting people 'spend' the money themselves and therefore falsify their preferences.

Imagine how absurd it would be if the only way vegetarians could avoid buying meat would be to move to a town where nobody purchased meat. If you take that absurdity and multiply it by a really giant number you end up with our public sector.

False equivalence fallacy: meat/vegetarianism is a private good. Here's a better analogy:
Imagine how absurd it would be if the only way you could avoid listening to your neighbour launch fireworks is to move to a town where nobody can purchase fireworks.
... and OMG, that is actually how the world works!

[Infactum]

Markets are magic because of consumer choice. You, the consumer, you know your preferences, you consider your circumstances, you survey your situation, you ponder your priorities, you weigh the alternative uses of your time and you sacrifice the least valuable uses. As a result of your choice (demand/input), how society's resources are used (supply/output) becomes that much more relevant/valuable/magical to you. Consumer choice is consumer sovereignty.

But if only one person buys my product (this thread)...then my buddy and I...we aren't going to significantly shift the supply in our direction. In order for more resources to flow in our direction...more and more consumers would have to agree that this is a valuable direction. Imagine 100 people replying....1,000 people replying....10,000 people replying. Visualize people joining this forum in droves in order to reply.

More and more replies to this thread would require more and more servers and more and more servers require more and more space...one warehouse...one block...two blocks...more and more blocks of server space.

In a market, supply shifting is the epitome of a group valuation/vetting process. Significant supply shifts require crowd vouching.

The multitudes vouching for my use of society's resources means that I'd receive a mountain of minutes...a moon of moments. A mountainous moon of magically musical moments. And it's easy to see the moon...and it's easy to see that I'm the only one who owns it...and it's easy to think that it's unfair. But is it unfair? Did I force anybody to give me their time? In case you missed it, you don't have to be here. Really.

Given your definition of "Market" (which seems fair in my non-expert opinion), I think I agree that one can conceptualize the reply choosing aspect of this forum as a market. I see it as a plaza with a bunch of vending machines, really, so the loss of negotiation makes it "feel" like less of a market, but I'll run with it for now.

Some threads in this forum are more magical than others...and resources are allocated accordingly. As a result of the free flow of input, the allocation (distribution) of resources is efficient. This means that redistributing moments would definitely destroy magic. It would destroy magic to mandate the minimum amount of minutes/replies that every member of this forum earns.

Just so were clear: you think that TET provides that much more value than all of the other threads? If most of the value people derive from this forum is time killing (and some social interaction), that might be true, but I want to make sure you think this.

People want minimum wages just like they fail to grasp that this forum is a market. The two are one in the same. If somebody grasps that this forum is a market then they won't want minimum wages to be mandated.

This does not follow in the least. Just because threads/replies are a market and they serve well doesn't mean that labor/wages being a market will serve well. Consider the following argument which I view as parallel to the one you're attempting:

-Forks are made of metal and good at helping one eat.
-A pencil is made of wood.
-People want wooden pencils like they think forks aren't metal. If somebody grasps that forks are metal, then they will want metal pencils.

It's ludicrous on its face once we change threads->forks, market->metal, wage law->pencil, and wood->minimum wage. If an argument is logical, replacing thins like this shouldn't matter. Ergo, your argument is not logical.

If this forum wasn't a market...then it would be a command economy. We wouldn't be able to shop around for the most valuable threads to spend our time on. Instead, we'd be marionettes, our time would be allocated for us. Planners would create threads and allocate our time/replies accordingly. It's a given that we'd spend most of our limited time reading and writing about topics that really didn't match our preferences.

Onto a positive argument of why we might want a non pure free market in some sectors:

As was pointed out earlier, this is really a mixed economy. Let's extend your forum-as-economy analogy (I will do this in the rest of the post, wince I think we can agree on the thread sector). What if we took the command section and did away with it? That is, removed all moderation. This would certainly be a freer market; by removing restrictions on what I can post, it must be the case that I can make posts that are better (or at least as good). Despite this, I submit that we would be overrun with spammers in days (maybe hours).

Would you argue that a spam/troll/flamewar filled forum is better than its current state*? If not, then you must accept that - in some sectors - a command economy can serve the public good better than a free market.

*For those of you looking to make the obvious joke, remember that I have preempted you here.

Do you think it's a coincidence that there isn't a single forum that is a command economy or a representative democracy? Maybe? Perhaps it's just been overlooked? It's entirely possible that nobody thought to create a forum structured exactly like our public sector. Well...now the thought is out there. If you truly believe that our public sector creates so much value...then you'll jump at the chance to earn your own magic moon by starting a representative forum.

Just take your business proposal to the bank. Tell the loan officer that you want to start a forum that works exactly like our public sector. How could he possibly doubt the business model? Or, if you want to be ironic, try and crowdfund your top down forum.

Boy...wouldn't I be surprised if one of you actually did it? I'd be even more surprised if you made any money. Holy cow would you make me eat my words. How awesome would that be for you? You'd have plenty of money and real evidence that command economies can function and even thrive.

It's funny because the Nobel Prize winning liberal economist who provided the best (most widely cited) economic justification for our government is the same guy who said, "the Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive."

C'mon you believer...create your command forum. If the proof doesn't quickly materialize then cry aloud to Samuelson; for he is a god; either he is talking, or he is pursuing, or he is in a journey, or peradventure he sleepeth, and must be awaked.

Do you agree or disagree that a command economy is better in the moderation sector of this forum?

------------------------------------------

Next post (I've read a fair bit of the thread, but it's getting late, and this seemed to have the most meat to talk about in it):

If you had a million dollars laying around...I'm sure you wouldn't hesitate throwing $10,000 at the development of your proof. But that's not the case right? And I don't think you're going to sell your car to start a representative forum. And you're probably not going to ask the bank for a loan. So why not try and crowdfund it?

If you try and crowdfund it...then you can see if there's any demand for a forum where elected representatives dictate which threads you reply to.

Why not go start a wholly unmoderated forum yourself? If it thrives and scales, you'd have an argument for ridding command economies in some sectors. Not even 4chan is unmoderated. Email protocols arguably are, but wiki estimates that something like 85-97% of email is spam (http://en.wikipedia.org/wiki/Email_spam#Statistics_and_estimates). Spam filters make it so we don't see most of it, but those make a part of our email a command economy. Without such command economy features, I suspect email would be much less useful.

While I'm here...let me share a bit of my reality with you.

In my OP I mentioned The Pure Theory of Public Expenditure. It was written in 1954 by the Nobel Prize winning liberal economist Paul Samuelson. It is by far the most widely cited economic justification for government.

His argument was that, because people can benefit from public goods without having to pay for them, it wouldn't work to simply ask people how much they value public goods. People would have an incentive to state that they value public goods less than they actually do. As a result, public goods would be undersupplied. Therefore, compulsory taxation is necessary.

Samuelson and I agree on this pretty fundamental point. Everybody wants a free lunch. We all want to externalize costs.

This leaves us with the issue of determining how much people truly value public goods. Is it important to figure this out? Well...yeah...the optimal supply depends on this information. You can't say, "hey man nice shot" if you don't know where the target is. In economics, the target is demand. The value of the supply is judged by its proximity to demand. How valuable is this thread? The answer depends on how closely it matches the preferences of consumers.

What Samuelson did was simply assume that government planners already know what our preferences are. In other words, he just assumed that government planners are omniscient. Seriously. I really disagree with Samuelson on this fundamental point. And I sure wasn't the only one.

If you claim that Samuelson said governments would maximize value, then he assumed government planners are omniscient.

If you make the more defensible claim that he said central planning could, in some specific cases, be better than decentralized decisions, then he makes no such assumption.

Two years after Samuelson published his paper...Charles Tiebout published A Pure Theory of Local Expenditures.

It's been cited over 10,000 times...which gives you a pretty decent idea of its importance.

Tiebout's paper was a response to Samuelson's argument that it was impossible to discern people's true preferences for public goods. In his paper, Tiebout argued that people will move to whichever communities supply levels of public goods which most closely match their preferences. Basically, foot voting solves the preference revelation problem. Well...it was a great argument because there was a decent amount of truth to it...but many economists were not very satisfied with the answer. Therefore, many economists have been trying to figure out other ways to get people to reveal how much they value public goods.

Interesting approximation scheme. It doesn't really solve the decentralized problem, but it gives a better metric for choosing between central plans (this is my first pass impression - again, it's late)

Now, I'm pretty sure you've never even heard of Tiebout or his extremely well cited paper. Just like I'm sure you've never heard of any of the economists since then who've attempted to solve the preference revelation problem. Clearly you're not even aware of the preference revelation problem.

Now I'm a little confused. You claim to know that many trained economists have tried to solve the preference revelation problem. You also claim that you have a solution. Since I don't hear many econ Ph. D.'s trumpeting tax-choice from the rooftops I am left with several possible conclusions:

1) Very few economists are utilitarian or wish to make comments on utilitarian solutions.
2) Almost all trained economists are less capable at economics than Xerographica.
3) There is no proof that Tax-choice provides anything like a utilitarian solution. Xerographica is incorrect.

I beleive this list is exhaustive. Can you think of another option? If not you'll forgive me for choosing option (3).

**note, this argument stands independent of the rest of the post; I am merely trying to get you to reexamine your certainty in the hopes that you might come to a perspective we can agree on.

I'm especially bringing up Tiebout though because of his relevance to your post. In the real world...there are significant costs to moving to a new community. Foot voting is not cheap. So the push/pull has to be pretty significant before you'll move to the next community...let alone to another country.

But this really isn't the case with forums. Foot voting for a different forum is far less costly than foot voting for a different real life community. It was pretty much the easiest thing for people to migrate from Friendster to MySpace to Facebook. And unlike real communities...we can live simultaneously in numerous online communities. This means that the supply of public goods in forums will more closely match the preferences of consumers than the supply of public goods in towns will. It's far easier to start a new forum than it is to start a new town.

So you're right that this forum is a mixed economy...but the supply of public goods is more accurate/valuable (closer to the target) because leaving (exit) is relatively easy. If it was just as easy to move in the real world...then it wouldn't be as important to try and help people understand why pragmatarianism is by far the best option.

If I accept your argument that online communities allow an ideal Tiebout-esque approximation (and I do think it seems reasonable), then I must conclude that the public good it best served when the moderation sector of a "forum economy" is centrally planned. Look at the most successful and profitable websites that allow user contribution: Wikipedia, Youtube, Facebook, Twitter (off the top of my head, in no particular order and with no defined metric). Note that all of these have severe restrictions on the type of content allowed. Effective moderation is very much a public good (non rivalrous and non excludable within the context of a website). Centrally planned effective moderation seems to be the most profitable type.

In 1963, seven years after Tiebout published his paper, the Nobel Prize winning market economist, James Buchanan, published The Economics of Earmarked Taxes. It's only been cited 246 times. Sometimes it takes the crowd a while to recognize an Easter Egg. That being said, the crowd finds infinitely more Easter Eggs than government planners can.

Buchanan's argument was basically that if people have to pay taxes anyways, then it's in their selfish interest to spend their taxes on the public goods that most closely match their preferences. If your buck is a foregone conclusion, then you might as well spend it on whatever gives you the most bang. If your moment is a foregone conclusion, then you might as well spend it on whatever gives you the most magic. If you've already paid for a buffet...then you might as well select the dishes that you find most delicious. When consumers are free to spend their time/money on the items that most closely match their preferences...producers have the strongest possible incentive to try and supply better items. As I said in an earlier post...consumer choice has very beneficial consequences.

We went over this last time. Buchanan assumes that the goods on the market provide a "linear" benefit to the "buyers" of the goods (I'm not really even sure what 10x the amount of EPA would mean). He acknowledges as much in the paper; going so far as to say that "Collective goods are assumed to be produced at constant marginal cost" (p 459). It is my belief that most public goods behave nothing like this. Until this is demonstrated, Buchanan's paper has no relevance to the real world.

Further, while he tries to lay out a way to generalize to multiple interested groups, he never actually does so. If the populace has multiple peaks in its preferences, his analysis is not fleshed out. It is my belief that this can't be proven in terms as strong as his initial claim. If it could, Samuelson's original proof of the failure of decentralized decisions would not hold. Whatever, you say about his normative conclusions, you will have a hard time arguing with his math (which, in my skim, seems to be a general case of the prisoner's dilemma problem appropriately phrased and generalized).

[Galloism]

Yep, your ideas are definitely going to become more popular by having people read Galloism's explanation of how your system could be easily circumvented. Makes perfect sense.

Get your engraved bronze toilets!

Engraved bronze toilets right here!

[Starvation Is Fun]

I tried reading the OP but I think it gave me a headache

[Divair2]

Is this OP obsessed?
Maybe.

[Orham]

Yep, your ideas are definitely going to become more popular by having people read Galloism's explanation of how your system could be easily circumvented. Makes perfect sense.

Get your engraved bronze toilets!

Engraved bronze toilets right here!

Now, one could simply make it illegal for public institutions to pay one another for goods or services as a way to close that hole. But then interdepartmental cooperation becomes more or less impossible, doesn't it?

Also, Galloism...there's been an alarming uptick in the number of pragmatarians on this forum since I put that link in my signature, hasn't there? Look at all...one...possibly two...of them. TWO, Galloism!

Truly the era of elected representatives determining public budgets has reached its end! Prepare for consistently funded national security and law enforcement operations to become wholly dependent upon each institution's successful effort at maintaining good PR! Prepare for the imposition of the principles guiding commercial actors upon institutions which were never designed or intended to operate commercially to begin with, such as the US Dept. of Defense or the Environmental Protection Agency!

[Galloism]

Get your engraved bronze toilets!

Engraved bronze toilets right here!

Now, one could simply make it illegal for public institutions to pay one another for goods or services as a way to close that hole. But then interdepartmental cooperation becomes more or less impossible, doesn't it?

Well, no Federal agency could ever mail anything again.

That might prove problematic.

Also, Galloism...there's been an alarming uptick in the number of pragmatarians on this forum since I put that link in my signature, hasn't there? Look at all...one...possibly two...of them. TWO, Galloism!

Truly the era of elected representatives determining public budgets has reached its end! Prepare for consistently funded national security and law enforcement operations to become wholly dependent upon each institution's successful effort at maintaining good PR! Prepare for the imposition of the principles guiding commercial actors upon institutions which were never designed or intended to operate commercially to begin with, such as the US Dept. of Defense or the Environmental Protection Agency!

Good PR - it's interesting you should mention good PR.

The plan inevitably involves all the federal agencies advertising - yes, advertising - in order so they can get funding. This means that, even if optimally all the federal agencies received the adequate funding they need, either taxes would have to rise dramatically, or they would have to spend a significant portion of their operating budget on advertising, leave them woefully underfunded for their actual jobs.

It's true, sometimes federal agencies have to advertise specific programs now and then, for public awareness. This is nothing compared to the huge advertising budgets needed under this system, and it's a strange twist on the prisoner's dilemma. For a particular agency, advertising extensively is a good thing. If all the agencies do it, it's a bad thing overall as they all lose effective operating budget trying to out do each other.

[Yaltabaoth]

Is this OP obsessed?
Maybe.

To a man with a hammer, every problem looks like a nail. Has he asserted yet that anyone who disagrees with him just doesn't understand economics before setting up a ridiculous hypothetical with absolutely no bearing on reality?

On the other hand, for the next 23 hours-or-so (April Fools bytecoin thang, so this post doesn't date too badly), he's actually kinda right.

[Ifreann]

Is this OP obsessed?
Maybe.

To a man with a hammer, every problem looks like a nail. Has he asserted yet that anyone who disagrees with him just doesn't understand economics before setting up a ridiculous hypothetical with absolutely no bearing on reality?

On the other hand, for the next 23 hours-or-so (April Fools bytecoin thang, so this post doesn't date too badly), he's actually kinda right.

Just imagine what would happen if bytecoins were generated by posts on the forums.

[Yaltabaoth]

To a man with a hammer, every problem looks like a nail. Has he asserted yet that anyone who disagrees with him just doesn't understand economics before setting up a ridiculous hypothetical with absolutely no bearing on reality?

On the other hand, for the next 23 hours-or-so (April Fools bytecoin thang, so this post doesn't date too badly), he's actually kinda right.

Just imagine what would happen if bytecoins were generated by posts on the forums.

TET?

[Ifreann]

Just imagine what would happen if bytecoins were generated by posts on the forums.

TET?

The Eternal Bytecoin Mine.

[Ainin]

I think we can agree the answer is "yes".

>>

[Orham]

Well, no Federal agency could ever mail anything again.

That might prove problematic.

Pssh, that's easy to fix. Each institution would simply devote a portion of its operating budget to establishing and maintaining its own mail delivery service.

Good PR - it's interesting you should mention good PR.

The plan inevitably involves all the federal agencies advertising - yes, advertising - in order so they can get funding. This means that, even if optimally all the federal agencies received the adequate funding they need, either taxes would have to rise dramatically, or they would have to spend a significant portion of their operating budget on advertising, leave them woefully underfunded for their actual jobs.

It's true, sometimes federal agencies have to advertise specific programs now and then, for public awareness. This is nothing compared to the huge advertising budgets needed under this system, and it's a strange twist on the prisoner's dilemma. For a particular agency, advertising extensively is a good thing. If all the agencies do it, it's a bad thing overall as they all lose effective operating budget trying to out do each other.

In addition, I really don't see why it's so great to actively promote competition for funding between federal institutions. That sort of competition can create rifts in broader federal communities, defeating their ability to fulfill their actual functions (which, as it turns out, is not to operate as competing for-profit enterprises). For example, if the FBI needs the DEA's cooperation to successfully carry out an important project, but the DEA thinks that cooperating with the FBI will benefit the FBI more than itself if the endeavor is successful, will the DEA be as inclined to devote part of their operating budget to completing the project's objectives? Or will the DEA decline to cooperate and devote that money to endeavors it believes will be more directly beneficial to itself?

Some competition of that sort is inevitable even under the current system, but Xero's idea turns that up to eleven.

[Xerographica]

Seems a lot more like a moody quip to me.

The idea of "exit" is central to market economics. The fact that you can leave this thread whenever you like has economic consequences. Nobody should take their freedom to exit for granted.

We've already danced this dance, Xero. It makes no sense for a government planner to dictate how much milk goes in your refrigerator since you have all the necessary information, but it makes sense to allow elected officials with access to classified information to determine whether or not the DoD should receive additional funding from the public money pool.

So I have adequate information when it comes to milk but inadequate information when it comes to fighter jets? Why can't I just vote for a representative who likes milk as much as I do? Actually, I don't drink milk...I drink soymilk. So why can't I just vote for a representative who likes soymilk as much as I do? You expect pacifists to vote for representatives who like peace as much as they do.

Because you're talking about two characteristically different goods, with intrinsically different social consequences concerning their distribution and use? Are you seriously asking me why we don't treat milk and fighter jets the same way? Seriously?

Yes, seriously.

Imagine if there were only two goods in the world...milk and fighter jets. A lot of resources go into the production of those two goods...but let's pick one in particular...the smartest person. Any time this genius spends improving milk can't also be spent improving jets...and vice versa. This is the oh so important opportunity cost concept.

Therefore, better jets means worser milk...and vice versa. Right now you're saying that congresspeople can know when we need better jets. But if they can know that we need better jets...then it has to mean that they can know when we need worser milk. Spending more money on jets means stealing more resources from milk. Except, you're telling me that they don't have the necessary information about milk.

So, why don't we just vote for representatives who share our preferences for milk? Then the pro-milkers can exchange information with the pro-jetters...and we'll end up with the optimal balance of milk and jets.

Let's change gears a bit.

Imagine there are two pragmatarian countries...Orham and Xero. Both countries only have two goods in their public sectors...defense and roads. What's a realistic scenario in which these two countries go to war?

If businessmen in either country spend all their taxes on defense...then they won't earn any money because there won't be any roads to transport their inputs/outputs. If they don't earn any money then they'll have nothing to spend on defense. But what kind of businessmen don't want to earn any money?

In order for a country to have a lot of money to spend on defense/offense...they need to be extremely productive. But you can't be extremely productive by spending a lot of money on defense/offense.

I can imagine many situations where countries skimp on defense. Therefore, it's hard for me to imagine a situation where citizens in a country perceive defense important enough to splurge on. If they do splurge on defense...then this will cut into their productivity...and they won't be able to maintain their jets.

Businessmen are selfish and greedy. Why are they going to spend their money on more defense if more defense doesn't help their bottom line? That would be a poor investment. People who make poor investments generally do not have a lot to invest.

Yep, your ideas are definitely going to become more popular by having people read Galloism's explanation of how your system could be easily circumvented. Makes perfect sense.

You're sharing a flawed critique. The more people who read it...the greater the chances that some people will see the flaw.

I'd love it if you told me.

If you've ever thought about it then you might be. If you've never thought about it then it's doubtful.

[Xerographica]

Just so were clear: you think that TET provides that much more value than all of the other threads? If most of the value people derive from this forum is time killing (and some social interaction), that might be true, but I want to make sure you think this.

Do I think that Miley Cyrus provides more value than Warpaint? Is this a trick question?

It's ludicrous on its face once we change threads->forks, market->metal, wage law->pencil, and wood->minimum wage. If an argument is logical, replacing thins like this shouldn't matter. Ergo, your argument is not logical.

Errr...what? There's block or flow. If we mandated the minimum amount of replies that threads received...then this would be a block. Just like a minimum wage is a block.

Allowing people to comment on articles...block or flow? Locking a thread...block or flow? Preventing women from voting...block or flow? Preventing Americans from voting on Brazilian issues...block or flow? Preventing kids from voting...block or flow? Theft...block or flow? Murder...block or flow? Preventing people from shopping in the public sector...block or flow? Slavery...block or flow? Marionettes...block or flow?

You either facilitate input (flow)...or you hinder it (block).

Would you argue that a spam/troll/flamewar filled forum is better than its current state*? If not, then you must accept that - in some sectors - a command economy can serve the public good better than a free market.

It's like come...on. We've been discussing back and forth long enough for you to know that I'm not an anarcho-capitalist. The only thing wrong with the government is that we can't specifically exit. That's it.

Just because some moderation is better than no moderation...doesn't at all mean that any moderation is better than better moderation. You're welcome to attack anarcho-capitalism all you like...and I could certainly join you...but then we really wouldn't be making much progress with pragmatarianism.

If you claim that Samuelson said governments would maximize value, then he assumed government planners are omniscient.

If you make the more defensible claim that he said central planning could, in some specific cases, be better than decentralized decisions, then he makes no such assumption.

In specific cases? Maybe you missed the part where he said...."the Soviet economy is proof that, contrary to what many skeptics had earlier believed, a socialist command economy can function and even thrive."

Now I'm a little confused. You claim to know that many trained economists have tried to solve the preference revelation problem. You also claim that you have a solution. Since I don't hear many econ Ph. D.'s trumpeting tax-choice from the rooftops I am left with several possible conclusions:

1) Very few economists are utilitarian or wish to make comments on utilitarian solutions.
2) Almost all trained economists are less capable at economics than Xerographica.
3) There is no proof that Tax-choice provides anything like a utilitarian solution. Xerographica is incorrect.

I beleive this list is exhaustive. Can you think of another option? If not you'll forgive me for choosing option (3).

You claim that pragmatarianism wouldn't work...and I claim it does. Samuelson claimed that command economies would function and thrive...Mises and Hayek claimed that they wouldn't.

Yes, there aren't any economists trumpeting tax choice from the roof-tops...but neither are there any economists decrying tax choice from the roof-tops either.

Let's pick out some economists...you ask half why pragmatarianism wouldn't work and I'll ask the other half why it wouldn't work. And then we'll share their answers. Deal or no deal? Or is the burden of proof all on me?

The fact of the matter is...you, like everybody else, have greatly endeavored to dodge my argument. Why wouldn't it work to allow representatives (elected or otherwise) to choose which threads we replied to?

Instead of dealing with my argument...you challenged me to prove that anarcho-capitalism would work. Errrrr...what? If I thought that anarcho-capitalism would work...then I would be an anarcho-capitalist. But I'm not an anarcho-capitalist...I'm a pragmatarian. I have absolutely no problem with the government providing police, jets, cheese, milk or threads...as long as there's specific exit.

Regarding game theory...did you know that I love plants? My favorite plants are epiphytes. Some epiphytes need more water than other epiphytes.

Picture an epiphyte on a tree. It needs water. Who should be responsible for ensuring that it receives sufficient water? People who love epiphytes or people who hate epiphytes?

I think anybody who makes the effort to ensure that the epiphyte has sufficient water is somebody who loves epiphytes. Erich Fromm would agree...

If a woman told us that she loved flowers, and we saw that she forgot to water them, we would not believe in her "love" for flowers. Love is the active concern for the life and the growth of that which we love. Where this active concern is lacking, there is no love. - Erich Fromm, The Art of Loving

Right now my active concern is to promote a system that allows everybody's active concern to freely flow. Once pragmatarianism is in place...then I can focus on directing my active concern to conserving/expanding natural habitats. And you can direct your active concern to uh, was it space research?

Game theory is really not relevant. If you want people to change their priorities...then the onus is on you to provide them with the necessary information. Which is exactly what I'm currently endeavoring to do.

[Immoren]

To a man with a hammer, every problem looks like a nail. Has he asserted yet that anyone who disagrees with him just doesn't understand economics before setting up a ridiculous hypothetical with absolutely no bearing on reality?

On the other hand, for the next 23 hours-or-so (April Fools bytecoin thang, so this post doesn't date too badly), he's actually kinda right.

Just imagine what would happen if bytecoins were generated by posts on the forums.

I'd be rich like Scrooge. *nods*

[Xerographica]

Can you point on where Samuelson said that they are omniscient? I can't see anything of the kind.

With the help of equations and diagrams, Samuelson showed how the planner would derive for each individual his demand function and the collective consumption goods that would contribute to his utility maximization. In this system, the planner is expected to have an omniscient presence and be able to ascertain individual preferences even when they are not voluntarily revealed. Samuelson attempted to show the combination of public and private goods and their distribution that would maximize social welfare. His concern was with the total community's welfare and with all goods; it did not have much to do with the central reality of the budget in the ordinary world. - A. Premchand, Government Budgeting and Expenditure Controls: Theory and Practice

Samuelson, laying particular emphasis on the problem of preference revelation, takes as a premise the existence of an omniscient planner. - Christian Bastin, Theories of Voluntary Exchange in the Theory of Public Goods

In Samuelson’s model, the optimum value of public goods expenditure is determined by an ethical observer who has information on the preferences and incomes of all individuals in the economy. - Marianne Johnson, Public Economics, Market Failure, and Voluntary Exchange

The well-known Samuelson (1954, 1955) public goods articles offer a good example. Samuelson titles his first article “The Pure Theory of Public Expenditure,” indicating that his analysis of a possible market failure in the production of public goods is, in fact, not a theory, but the theory, of public expenditure even though the article contains no analysis of how government would succeed in producing public goods where the market would fail. The only way Samuelson's public good theory can be a theory of government expenditure is if the government is an omniscient benevolent dictator. - Randall G. Holcombe, Make Economics Policy Relevant: Depose the Omniscient Benevolent Dictator

Though an old theme, Samuelson's rigorous analysis of public goods in a general equilibrium setting (Samuelson, 1954) captured the attention of a wide range of theorists, and soon became the center of fiscal theory. Wicksell's concern with how to secure preference revelation was noted, but was set aside as unmanageable by economic analysis. Implementation of budget choice was again left to an omniscient referee. - Richard A. Musgrave, Public finance and the three branch model

What he said was:
"No decentralized pricing system can serve to determine optimally these levels of collective consumption", and "it is in the selfish interest of each person to give false signals".
Your view of pragmatarianism does not change those facts.

When given the opportunity, people will choose to externalize their costs. In other words, if I was given the opportunity, then I would have the incentive to put my drinks on your tab. Because, we all want a free lunch.

At first I thought you didn't understand economics, but it seems clear now you don't understand logic.

At first I thought that you would give up. Good job proving me wrong.

Wherein you miss the point that all three papers made: it is in people's interests not to reveal their true preferences for public goods.

Errr...what? It's in people's interest to externalize costs. Therefore, we limit their opportunity to externalize costs. How could consumers externalize costs in a pragmatarian system? You can only spend your own money.

The point is to AVOID that situation. The purpose of compulsory taxation is to avoid letting people spend their own money on public goods because they won't truly indicate their preferences.

Samuelson said that compulsory taxation was necessary because people would choose to externalize costs. In a pragmatarian system, people wouldn't have that choice.

Yet you're going to take the worst of both situations: compulsory taxation yet letting people 'spend' the money themselves and therefore falsify their preferences.

So pacifists would spend their money on war? Just like vegetarians spend their own money on meat?

Externalizing cost is where a meat eater passes the cost of his steak onto a vegetarian. But that wouldn't be possible in a pragmatarian system. You can only spend your own money. You can't spend other people's money.

The problem with democracy is that everybody endeavors to spend everybody else's money. We all vote for free lunches. Compulsory taxation is necessary for the same reason that democracy doesn't work.

Compulsory taxation eliminates the free-rider problem and pragmatarianism would eliminate the forced-rider problem.

False equivalence fallacy: meat/vegetarianism is a private good. Here's a better analogy:
Imagine how absurd it would be if the only way you could avoid listening to your neighbour launch fireworks is to move to a town where nobody can purchase fireworks.
... and OMG, that is actually how the world works!

Imagine how absurd it would be if the only way you could avoid paying for prohibition would be to move to a country where alcohol was legal. Imagine how absurd it would be if the only way you could avoid paying for the Vietnam war would be to move to a country where taxes weren't being spent on the Vietnam war. Imagine how absurd it would be if the only way you could avoid paying for the drug war would be to move to a country where drugs are legal. Imagine how absurd it would be if the only way you could avoid paying for the war on terror would be to move to a country that didn't spend any taxes on the war on terror.

The only thing wrong with government is the absence of specific exit.